Index Universal Life

Indexed Universal Life Insurance (IUL) is a type of permanent life insurance offering a death benefit and potential cash value growth tied to a market index. 

Robert “Chase” McIntyre Agent # 08605N

How it Works:

  • A portion of your premium contributes to a cash value account, with interest linked to a stock market index like the S&P 500.

  • IUL policies typically have a guaranteed minimum interest rate (floor) to protect against market losses.

  • While there's growth potential if the market performs well, a 0% floor prevents loss

  • Policies offer some flexibility in premium payments.

  • Cash value growth is tax-deferred, and policy loans are generally tax-free. 

Benefits:

  • Provides a death benefit.

  • Potential for tax-deferred cash value growth.

  • Downside protection from market downturns.

  • Offers premium and death benefit flexibility.

  • Potential for market-linked cash value growth

Assumptions for this Example:

  • Initial Cash Value (Year 0): $0 (starting fresh)

  • Annual Premium Paid: $5,000

  • Assumed Cap Rate: 10%

  • Assumed Floor Rate: 0%

  • Assumed Policy Charges (Cost of Insurance, Fees, etc.): $1,000 per year (This is a simplified, flat amount for illustration; actual charges vary by age, death benefit, and policy.)

  • Crediting Method: Annual Point-to-Point (index performance measured from one anniversary date to the next)

Table illustrating an IUL policy year-by-year chart example with columns for policy year, annual premium paid, beginning cash value, S&P 500 index performance, indexed interest credited, policy charges, and ending cash value. Data for seven policy years including premium amounts, cash values, index performance percentages, and interest credited.
Page featuring examples of different insurance policies with images of cash and piggy banks.

Index Life Offers More Than Whole Life and Pairs great with a Term Life.

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10 Things Customers Like About the Farmers IUL

1. Provides Income Replacement Coverage/Death Benefit.

2. The Farmers IUL is ranked out of all companies one of the very best.

3. Ability to benefit from market gains without risk of loss.

4. Provides tax free distributions to the owner and a tax-free death benefit to the beneficiary.

5. Provides protection of the cash value and death benefit from creditors.

6. Provides cash for long-term care expenses from the chronic illness rider. 7.

Allows for flexible monthly and/or annual contributions. 8.

Allows for flexible distributions from the policy.

9. Can be used to allow owners to “Be your own Banker” which is becoming very popular.

10. Provides an additional 1% of the death benefit face value to your charity with the charitable giving rider.

This short video gives three examples of the Index Universal Life Structure.

8 Examples of how to use the Index Life Policy