Index Universal Life Insurance

Customers can choose to allocate their premiums into a Fixed Account and/or Indexed Accounts to foster cash value growth. Indexed Account options include the S&P 500^® or S&P^® MARC 5% ER. Each account comes with a guaranteed minimum rate of return, ensuring that the cash value grows over time. The S&P^® MARC 5% ER index offers uncapped growth. There is a floor on both indices and, hence, the return is never negative. Overall, there is potential for greater cash-value growth. The cost of keeping the policy in force is subtracted from that cash value every month. You may be able to increase the death benefit, and you may be able to lower or even stop your premium payments in the future if the policy has accumulated sufficient cash value. Learn more about how life insurance works.

The monthly cost of keeping an index universal life policy in force depends, in part, on:

• Your age (as you get older, the cost of insurance goes up), 
• Your health, whether you smoke
• The size of the death benefit you want
• Any supplemental coverage/riders you add to the policy
  

You choose how much premium to pay, within contract limits. You can choose to pay more than the policy costs today and build cash value that can help cover the cost of the policy later. If you have sufficient cash value already, you can choose to pay less than the cost of the policy or even not pay for a while.

The answer depends on the customer's protection need, budget, risk tolerance, desire for guarantees, and cash-value objective. Because index universal life insurance offers flexibility — to change premiums or the amount of coverage — it may be a good option to consider if you want coverage to last your lifetime. It might also be useful if you have long-term savings goals and you need both life insurance and a way to build cash value to help meet them.

Index universal life insurance allows you the option to allocate part of your premium to two market index accounts. You can choose one or both to help you grow your cash value, with growth potential tied to the market index performance. Unlike investing directly in the stock market, an index universal life policy guarantees a percent floor that may help you protect your assets from market-related losses in years when indexes perform poorly.  In addition, the S&P^® MARC 5% ER index offers uncapped growth.

This indexed arrangement offers the potential for more rapid growth with the protection of the floor, but the growth rate may be a little more unpredictable than a traditional universal life insurance policy.

Universal life insurance includes various policy types that let you choose how you want your cash value to earn interest.

Yes. Flexible premiums are a key feature of index universal life insurance policies. Each month, you can pay the minimum or you can choose to pay more, up to IRS limits. You may also choose to skip a payment or even stop paying premiums in the future if your policy has enough cash value to cover its costs. Paying more than the minimum premium allows your policy to build more cash value over time. If you pay less, your policy stays in force as long as you have enough cash value to cover the current charges, but your coverage may not stay in place for your entire lifetime.

Yes. Index universal life insurance has flexible death benefits, within the limits of your contract. You can change the amount of coverage (your death benefit) by adding more coverage or reducing coverage if the remaining policy still meets minimum policy requirements. Adding more coverage may result in additional underwriting requirements.