Cash Value Indexed Universal Life Insurance
What is indexed universal life insurance?
Indexed universal life insurance is a type of permanent life insurance – a life insurance policy that stays in effect for your whole life as long as the premiums are paid (as opposed to a term policy, which expires after a set amount of time). Other types of permanent life insurance include whole life insurance, variable life insurance, and universal life insurance.
All permanent life insurance policies are split into two parts: the death benefit (which pays a lump sum to a beneficiary when you die) and a cash value that can grow over time. With universal policies, you can adjust the death benefit within set limits, and use gains from the cash value to pay your premiums.
What makes indexed universal life insurance unique is the “indexed” part. These policies have a minimum guaranteed interest rate (so you won’t lose money), but the interest rates aren’t fixed; instead they’re based on an index chosen by the insurer.
An index is essentially a group of investments like stocks or bonds. The S&P 500 and the Nasdaq 100 are examples of indexes. The insurer doesn’t directly invest in the market, but uses the interest rate and performance of a specific index to set the interest rate for your policy.
Disability Insurance – is a type of coverage that replaces a portion of your monthly income if injury or illness prevents you from working. It provides financial security for you and any loved ones who may depend on your most valuable asset – your ability to earn a paycheck. The disability insurance benefits you receive from your policy can be used however you want, from monthly bills and out-of-pocket medical expenses to childcare and groceries. You may also hear disability insurance referred to as disability income insurance or income protection insurance.
Please contact your Webb Wealth Advisor for more details.
