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Life insurance offers coverage that protects your loved ones in the event of your death. All permanent life insurance plans feature a cash savings component, which builds value over time. This can be beneficial, especially if you choose an indexed universal life plan, which grows in relation to the market.
With this in mind, you may be wondering whether you should purchase an indexed universal life insurance plan. Here’s what you need to know before you shop.
What Is Universal Life Insurance?
Universal life insurance is a type of permanent life insurance. It covers the insured until death, just like a whole life insurance policy would. These plans are called “universal” because they are designed to fit the needs of any person with any need. Plans are available in many forms, with different premiums and death benefit options.
Universal life insurance plans, like whole life plans, feature an insurance component and a cash savings component. Your premiums are first paid into the insurance component, then into administrative fees, then into your cash savings component. The cash savings component grows over time by earning interest.
What Is Indexed Universal Life?
Indexed universal life insurance is a type of universal life insurance plan. The main difference between indexed and traditional plans is that the indexed plans have a cash value component that is tied to a financial index, such as Nasdaq. This means your cash savings component grows over time depending on the performance of the market.
Should You Get Indexed Universal Life?
Universal life insurance is a good fit for many people because it has flexible terms that can be adjusted from time to time. Indexed universal life can be beneficial for some, but you don’t want to underestimate the risks. If you choose a universal life plan and the market doesn’t perform well, there’s a chance you won’t earn as much in interest.
Find Indexed Universal Life
An insurance agent can help you determine whether indexed universal life insurance is the right choice for you. They’ll walk you through the pros and cons, then guide you towards the best possible plan. To get started with the shopping process, give us a call at 888-989-0079.
