Universal Life Insurance
A fairly new form of life insurance, index universal life is a kind of permanent policy that features flexible premiums. The big selling point behind indexed universal life is your ability to raise or lower the value of the policy, depending on the amount of the premium you want to pay. A index universal life policy lets you decide how much of your premiums will be used for your insurance benefits and how much for your plan’s investments. Just like whole life policies, your plan will accumulate cash value over time. In some cases, the accumulated cash value will pay for the premiums itself. Most importantly, index universal life can offer you substantially higher cash-value yields than those on basic whole life policies. A indexed universal life policy will have a guaranteed rate of return investment. This will be disclosed in advance. You’ll receive annual reports laying out your entire universal life portfolio — including the current amount of insurance protection you’re carrying, the cash value of your policy, the costs of your insurance, carrier fees, amounts credited to your cash savings from premiums, and the rates of cash value return.
Advantages of Indexed Universal Life Insurance:
1. Your index universal life plan will let you adjust your benefits if your needs change.
2. The value of a universal life policy can be used as collateral for a non-taxable loan.
3. Indexed Universal life offers you the flexibility to pay either a smaller or larger premium — depending on your circumstances. This can be an important feature if your household income fluctuates.