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1. What Is an IUL Policy?
Indexed Universal Life (IUL) is permanent life insurance that offers lifelong protection and the potential for cash value growth tied to market indexes—without being directly invested in the stock market. Your cash value benefits from market performance, but is protected from losses.
2. How the Cash Value Grows
Your cash value earns interest based on a selected financial index (like the S&P 500), up to caps and floors set by the insurer. You gain when the index performs well, and when it performs poorly, a 0% floor shields your cash value from market downturns.
3. Accessing the Cash Value
Many IUL policies allow tax-advantaged access to the cash value through policy loans as long as the policy stays active. This provides flexibility for future needs such as retirement income, opportunities, or financial emergencies.
4. Who an IUL Is Best For
IUL is ideal for people who want lifelong protection, flexible premiums, growth potential tied to an index, and tax-advantaged access to cash value. It offers more long-term growth opportunity than whole life, with downside protection that term and whole life don’t offer.
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