Plan Your Future with Confidence

What is an Indexed Universal Life (IUL) insurance policy?

An IUL is a type of life insurance that not only provides a death benefit for your loved ones when you pass away but also lets you build savings over time. These savings, called “cash value,” grow based on a stock market index (like the S&P 500), but without actually investing directly in the stock market. So, your cash value can grow when the market goes up, but if the market goes down, your cash is protected by a “floor” (usually 0%), meaning it won’t lose value due to market losses.

What is an annuity, and how can it help with retirement?

An annuity is a product sold by insurance companies that can turn your money into a steady income stream. You pay into the annuity either all at once or over time, and in return, the annuity pays you back monthly, quarterly, or yearly for a set period or even for the rest of your life. This makes it helpful for retirement, providing reliable income that you can count on.

Why do people choose IULs over other types of life insurance?

People choose IULs because they offer more potential for growth than traditional whole-life insurance. Unlike whole life, where your cash value grows at a fixed, often lower rate, an IUL can grow faster because it’s linked to the stock market (but still protected from market losses). Plus, IULs allow for flexible payments, meaning you can pay more when you have extra income and less when you need to.

What are the main advantages of using an annuity?

Annuities are popular because they provide a steady income and offer some tax benefits. The money you put in grows without being taxed until you withdraw it, which can help it grow faster. Annuities can also provide guaranteed income for life, which is great for retirees worried about outliving their savings.

Can I lose money in an IUL or an annuity?

IUL: Your cash value has a built-in “floor” to protect it, so even if the stock market performs poorly, you won’t lose money from market downturns. However, fees and costs may reduce the cash value over time.

Annuity: It depends on the type. Fixed annuities guarantee your initial money, but with variable annuities, your money is invested in the market, so its value can go up and down.

How do I access the cash in an IUL policy?

You can access the cash value in your IUL by taking a loan against it or by making a withdrawal. Loans are often tax-free, but they reduce the death benefit if not paid back. Withdrawals may affect the policy’s performance, and you’ll need to manage this carefully to keep the policy in good standing.