Life insurance 

What are the benefits of an Indexed Universal Life (IUL) policy?

One of the coolest things about an iul or index universal life insurance policy is that you can add to the cash value portion of your insurance policy. The policy builds cash value based on premium payments that are above the cost of insurance and other expenses and the performance of the underlying index.

One of the benefits of using an iul is that it is linked to changes in an indexed account, which can allow you to enjoy bullish market growth while enjoying protection against negative returns. In other words, you can go up without going down. The account indexed in the iul usually has a minimum limit and a maximum limit.

Sometimes you can hit the ceiling that could give you double-digit returns in some years when the market is in profit. Similarly, although you would still have to pay policy fees and expenses, you will not receive a negative credit when the market goes down. This means that when the market is up your money can grow but when the market is down you are protected and your money cannot be negatively credited due to a market downturn, but you will still have policy fees and expenses.

This can prove extremely beneficial in times of market turbulence. In years when the market goes up so do your cash values ​​and when the market goes down, this is where the floor comes in and you receive zero credit, and you are protected against that loss. Your money is locked in so you don’t lose! However, you will have to pay the policy fees and expenses.

Now why is this so important? Because inflation is one of the biggest threats to growing your money and what if inflation is between 3% and 5% or even higher depending on the government’s monetary policy? It is important that your money beats inflation. If your money grows more slowly than the rate of inflation, you’re not growing your money; it is actually declining in value over time.

The iul can allow you to beat inflation by capitalizing on potential growth in years when the market is up. The cash value growth of your indexed universal life policy is tied to the S&P 500, but your cash is not actually invested in the market. Your money is protected from any market loss because you are not directly in the market but at the same time benefit from the growth of the S&P 500 up to a limit or cap.

Let’s say the upside limit is 12%. This can vary from one policy to another. This means that cash value growth would be limited to just 12%. Having a limit is actually a good thing because it is what allows the insurance company to protect you against loss in years when the market is down.

Now you can grow your money when the market goes up, you could beat inflation with potential double-digit earnings, and you never have to worry about losing money when the market goes down. What kind of peace of mind would it give you to know that your money is protected from market volatility?

Therefore, the index strategy makes sense for people who want to avoid market risk but still want the potential for double-digit gains and all the other benefits that an IUL can bring them. With this strategy, you could save more money even without changing your current lifestyle.

The Supercharged Index and Strategy could allow you to:

Benefit from double-digit earnings in subsequent years.

Help beat inflation.

Grow your money tax-deferred.

Access cash values ​​without incurring taxes.

Provide cash flow for life.

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