Index Universal Life Insurance : What is it?

Investing for retirement is a necessity for most people. There are many different ways to invest, but one of the most popular methods is investing in insurance. Insurance is an investment that provides financial protection against certain risks, such as death or disability. There are two types of insurance: life insurance and disability insurance. Life insurance pays out a lump sum when you die, while disability insurance pays out if you become disabled and can’t work anymore. Life and disability insurances are typically sold through an agent or broker who can offer advice on the best policies for your specific needs. There is actually a way to combine life and disability insurance.

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An index universal life insurance is an insurance policy that provides coverage for the insured’s life and, in addition, pays a fixed amount of cash value.

Index universal life insurance policies typically pay a fixed interest rate on the cash value. The interest rate is typically linked to an index such as the Dow Jones Industrial Average or the S&P 500 Index.

The linkage to an index provides two benefits:

1) It guarantees that the policy will not lose money due to inflation; and 2) It allows for tax-free accumulation of cash value over time.

An index universal life insurance policy can be created to have a disability benefit inside of it.

This is great because disability policies can be costly for those who are also purchasing life insurance alongside of it.