What is indexed universal life

An indexed universal life insurance policy includes a death benefit, as well as a component that is tied to a stock market index. The cash value of the policy ...Best Universal Life Insurance · Cash Value Life · Do Beneficiaries Pay Taxes

What is an indexed universal life policy?

Indexed universal life (IUL) insurance is permanent, which means it lasts your entire life and builds cash value. An IUL policy allows for some cash value growth through an equity index account, unlike other universal policies that only grow cash value through non-equity earned rates.

What is the difference between universal life and indexed universal life?

The main difference between whole life insurance and indexed universal life (IUL) insurance is how the cash value operates. Whole life insurance cash value grows based on a fixed interest rate. In contrast, insurance companies tie IUL cash value to a stock market index's performance.

Can you lose money in an indexed universal life insurance?

It is unlikely you will lose money in an IUL because insurance agencies set a guarantee to your principal to protect it against losses in the market.

Is Indexed universal life an annuity?

Indexed universal life is an insurance contract in which your principal will grow on a tax-deferred basis. As in the case with indexed annuities, your money isn't invested in the market. Rather, the insurance company will credit you an interest rate that is tied to the performance of an index.