Indexed Universal Life Insurance
Nothing in life is risk-free. But investing in indexed universal life insurance comes pretty close.
An Indexed Universal Life Insurance policy is a flexible premium permanent life insurance policy that contains both an insurance component and an investment component.
Like other permanent life insurance products, premiums are deposited in the policy’s cash account, which is reduced by policy charges and increased by a crediting methodology set forth under the terms of the policy.
What differentiates an Indexed UL policy from other types of permanent life insurance used for cash accumulation is that the growth of the policy’s cash value is based on the performance of an equity index (usually the S&P 500) with annual growth capped at a predetermined rate, but one of the most appealing part of this type of policy is that there is also a floor, below which the index never drops.
The owner of the policy can have strong earnings potential with no downside risk.
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