Fixed and Indexed Universal Life Insurance (IUL)
Fixed and Indexed Universal Life (FIUL) insurance is a type of permanent life insurance. It builds cash value based on a stock index, like the S&P 500. FIUL offers both a death benefit and a cash value component. It is unique because cash value growth is linked to, but not directly invested in a market index. This means you benefit from market gains without the entire risk.
The “fixed” part of FIUL ensures a minimum guaranteed return, even if the market performs poorly. However, there’s a cap on how much you can earn from market returns. So, while you can see higher earnings in good market conditions, your returns won’t fully match the market’s performance.
The policy stays in effect as long as you pay your premiums. Most policies have a maturity date, like age 121, at which benefits are paid out. These could be the cash surrender value or the full death benefit.
Doyle Assurance Group partners with 50 A+ rated carriers to offer FIUL policies. These policies balance security and potential growth, ensuring financial peace of mind. We work on your behalf to find the best coverage for your needs.
Top Benefits of Fixed and Indexed Universal Life Insurance
Cash Value Growth
FIUL allows your policy’s cash value to grow by linking it to a market index like the S&P 500. This means higher returns during strong market phases, combining the benefits of market-linked growth with life insurance security.
Protection from Market Downswings
Remain safe from market downturns and get guaranteed minimum returns. Even in a poor market, your policy’s cash value won’t lose money, ensuring growth with a safety net.
Flexibility
Get flexible premium payments and adjustable death benefits. As your needs change, you can adjust your policy, making FIUL a versatile option.
Tax-Deferred Growth
FIUL policies offer tax-delayed growth on cash value. You will only owe taxes on interest, dividends, or capital gains once you withdraw, allowing your investment to grow more effectively over time.
Accumulation Value Protection
Premiums and earned interest are protected from market losses. Your cash value remains intact, though fees and expenses are still deducted. This provides peace of mind and stable growth.
Lifetime Coverage
Get lifetime coverage, ensuring that your policy remains in effect as long as premiums are paid. This provides enduring financial protection for your beneficiaries and peace of mind, knowing your loved ones will be cared for no matter when you pass away.
The Value of a FIUL
Tax-Deferred Benefits
Get tax-deferred cash value growth from fixed universal life insurance policies. You will only pay taxes once you withdraw funds, which can help reduce your current tax burden.
The loan from a FIUL permanent life insurance is usually non-taxable. However, keep the policy active. The borrowed amount could become taxable if the policy lapses with an outstanding loan.
Another benefit is that death benefits for your beneficiaries are generally income tax-free. This provides financial relief for your loved ones during difficult times.
Protection Against Market Downswings with FIUL
FIUL insurance protects against market downswings with a guaranteed minimum return. While the cash value growth is linked to a market index, like the S&P 500, it isn’t directly invested in the market. This means you benefit from favorable market performance, but your cash value won’t suffer from market losses.
Even if the market declines, your policy’s cash value remains stable due to the built-in floor that ensures you don’t experience negative returns. This provides a safety net while allowing you to enjoy growth during strong market conditions.
Secure Your Financial Future with Doyle Assurance Group
Ready to explore how Fixed Indexed Universal Life (FIUL) insurance can provide you with both growth potential and protection? Contact Doyle Assurance Group today to find the right policy for your needs.
Let Doyle Assurance Group help you get financial peace of mind with a tailored permanent life insurance policy. Call us today for custom quotes! We work with over 50 A+ rated carriers, so you are sure to find what you need.
FAQs
What is fixed and indexed universal life insurance (IUL)?
Fixed and Indexed Universal Life (FIUL) insurance is a flexible life insurance policy that combines adjustable premiums and death benefits with the potential for growth linked to a stock market index. Unlike traditional life insurance, FIUL lets you adjust premiums and death benefits to fit your needs.
How does the indexed component of IUL work?
In an indexed universal life (IUL) policy, a portion of your premium is invested in an account linked to a stock market index, such as the S&P 500. The returns on this account depend on the index’s performance. To manage risk, growth is capped to limit returns and floored to prevent losses.
How do IUL and traditional whole life insurance differ?
An indexed universal life (IUL) policy offers the potential for higher returns through an account linked to a stock market index and provides flexible premiums and death benefits. In contrast, traditional whole life insurance features fixed returns and less flexibility.
How do caps and floors function in IUL policies?
Caps in IUL policies set a maximum limit on the returns you can earn from the indexed account. Floors ensure your account won’t lose money by guaranteeing a minimum return, often as low as 0%, protecting your principal.
Is IUL a good choice for retirement planning?
An IUL can be a valuable option for retirement planning. It provides tax-deferred growth and the potential for tax-free income through policy loans or withdrawals. This makes it a useful supplement to other retirement savings, enhancing your financial security.
What factors should you consider before choosing an IUL policy?
Consider your long-term financial goals, risk tolerance, and the need for flexible premiums and death benefits. Review the policy’s caps, floors, and fee structure to ensure it meets your financial needs and objectives.