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What Is Indexed Universal Life Insurance And Why Do You Need It?

Do you know what indexed universal life insurance is? Indexed universal life insurance (IUL) offers the best of both worlds: guaranteed lifetime income and tax-free growth on single premium payment.

(IUL) insurance combines the best features of whole and term life insurance policies into a single plan. This plan can provide guaranteed lifetime coverage to help pay your debts or cover funeral costs, as well as indexing your death benefits for inflation over time. Industry-leading insurance providers like Family First Life – Strong Tower can help you decide the best policy for you.

This blog post explains the benefits of IUL in detail and explores the insurance policy in light of other policies available in the market today.

How Does Indexed Universal Life Insurance Work?

Indexed universal life insurance is typically sold as a cash value insurance policy that benefits from tax-free market gains without the risk of significant losses during a market downturn.

Purchasing an IUL policy means you’re signing up for coverage for as long as you pay premiums. The policy includes a death benefit that your family can cash out once you pass away. You can also increase the policy’s value during your lifetime with the help of a cash value component.

IUL policies typically offer a policyholder to choose from one or more indices, such as the S&P 500, to determine how much your death benefit will increase each year. When selecting an index for IUL coverage, it’s essential to understand that no guarantee of benefits is offered concerning any specific market-based indicator. 

How Does Indexed Universal Life Insurance Compare with Other Forms of Coverage?

If you’re looking for guaranteed lifetime income protection with inflation benefits provided throughout your entire life without having any out-of-pocket costs along the way, then indexed universal life insurance may be right for you. This type of coverage is in stark contrast to term insurance, which only provides a set amount for a specific number of years. It’s also very different from whole life or traditional universal life insurance policies because the premiums are guaranteed not to increase over time, and no cash value accumulates within your policy.

What Do You Need to Know About Indexed Universal Life Insurance?

You’ll likely need an advanced understanding of financial markets and indices such as stocks, real estate, foreign currencies, and more with indexed universal life insurance. If this isn’t something that interests you, then indexed universal may not be suitable for you either. Policyholders have more flexibility to meet their investment goals using the IUL. This is because they can decide how much risk they would like to take in the market.

If you want to learn more about IUL in Dallas, TX, then Family First Life – Strong Tower is here to help you. Our consultants help devise a customized coverage plan for users based on their investment needs and the expected return. We also offer a range of life and asset insurance products designed to make your life safer and easier. Contact us to schedule a consultation with our team and learn more about what we have to offer.