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Weighing Your Insurance Options: Indexed Universal Life Insurance

When considering investing in a life insurance policy, you need to be sure that you’re purchasing one that best suits you and your family’s future needs.

In this blog, we’ll give you a brief overview of indexed universal life insurance, where the insurance holder can allocate a part of the paid premium to their fixed or equity index account. IUL policy is a great way to build and maintain financial security when the stock market is declining.

Ahead, we have covered some of the pros and cons of indexed universal life insurance to help you make a better life decision.

Advantages of IUL Insurance

Greater Potential for Market Returns

IUL insurance plan utilizes call options to lower the risks of losses and increase the earning potential. Many IUL policies conduct comparisons of different indices and pick one that offers the best returns. This means you won’t have to stress about which index is worth your investment. On the other hand, whole life insurance policies only offer a minimal interest rate, and that too isn’t always guaranteed.

Offers More Flexibility

IUL policyholders are allowed to decide the amount and frequency of premium payments, modify their death benefits, and customize the insurance policy according to their changing needs with the help of insurance endorsements.

Free of Tax Death Benefits

As long you’re paying for your insurance policy, indexed universal life insurance will offer you a guaranteed tax-free gain on capitals and death benefits. You can even choose the option of early payouts at the time of policy making. This means you can choose to pay premiums only till the age of 60 and still enjoy the insurance coverage, capital gains, and death benefits by the time you are 100 of beyond.

Downsides

Capped Earnings

Some insurance companies may cap the equity index or cash account, which limits the maximum amount of returns a policyholder can receive.  It’s better to take help from an insurance broker to be aware of the caps on returns in advance.

Mortality Expenses

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The policyholders of IUL insurance may have to pay additional mortality and insurance charges that may keep on increasing as they grow older. Insurance companies determine these charges according to the death benefits, which is why you can reduce these mortality expenses by correctly modifying the policy with the help of an insurance broker.

If you’re interested learning more about IUL Life Insurance FL and other life insurance policies before choosing the premium and death benefits, get in touch with IFG Insurance Brokerage. Our expert Life Insurance Broker FL will help you develop a suitable and safe insurance strategy that will ease your worries for a lifetime.  For more information, call us at (800) 381-1245!

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