Have You Considered an Alternative Route?

Indexed Universal Life Products Offer Unique Value
Indexed Universal life (IULs) are a type of universal life policy. These policies offer the policy holder the chance to allocate cash value in a fixed or equity account. Part of the premium goes to pay the death benefit and the rest goes into a cash value account. The invested money has the potential to earn interest based on the indexes selected, and there is a guaranteed minimum interest rate.  Each month the cash account is debited for the current cost of the life insurance.

Unlike universal life products, IUL’s financial value of the index is tied to the carrier’s investment portfolio, which is made up mostly of bonds.  Many policies are indexed to the S&P 500. Therefore, when the index does well, your cash value builds.  Many IUL’s have a guarantee that you will be credited a minimum amount each year.  There is also an upside cap if the index does better than expected.

Potential Benefits of IUL’s

• Potential of above average returns
• Policy loans can be allowed
• Tax-deferred growth of cash value
• Death benefits are income tax free
• A source of tax-free income through withdrawals or loans (when properly structured)
• Lower risk than stock investing, since the cash value won't decrease if the target index falls
• Generally, there are no limits to the amount you can contribute annually
• IUL’s permit tax free exchange of one policy to another
• Your accumulated cash value is protected from negative market returns

Like any investment, there is risk and issues you should fully understand before you make a decision.  These policies may be good for someone who has a certain level of financial sophistication and needs an alternative to more traditional life/investment products. Your returns will trail the S&P 500, as the carrier will take a portion of the return before crediting your return.

This is intended to be a simple overview of the IUL product and not intended to sell any specific product.  We recommend you contact our office to have a complete review of your needs. As stated above, with any investment is best to become fully educated on the risks and rewards before entering into any agreement or contact. 

Let Silva Management Insurance Services 888-611-7647 help you choose a policy that will fit your individual needs.  Protecting your assets, whether personal, business, or both, is our goal.  A well-chosen policy can lessen the impact of some of life’s most common, yet unforeseen perils.  We’re here to help when you are considering Auto coverage.