Index Universal Life continues it’s hot streak, rising 9% in new premiums sales in the fourth quarter of last year according to a LIMRA report. The report also indicates fourth quarter IUL sales represented 24% of all individual life insurance premiums compared to 21% last year, and there are some good reasons why.
Today’s Index Universal Life offers strong guaranteed benefits just as traditional Guaranteed UL does, while also providing flexibility, meaningful tax deferred cash value growth, and chronic illness riders that offer an additional living benefit protection.
So many families know they need life insurance, but also know they need more money saved for their retirement. Why not give them both?
Let’s take a look at one family’s situation to see whether GUL or IUL will fit best for them.
Jacob is 45 years old, married with 2 children and needs $500,000 of permanent life insurance. He likes the security of the Guaranteed UL, but not the limited cash value for retirement or other financial emergencies. He does like the idea of Index UL but is still concerned about guarantees.
Kind of blows you away when you see the numbers.
Jacob’s advisor explains that the Index UL utilized the S&P 500 annual Point to Point concept with a cap. Plus, with the Index UL Jacob will have:
- Guaranteed benefits to age 98 with on time premium payments.
- Non-guaranteed benefits and cash value that can last his lifetime if funded correctly.
- No negative crediting of interest.
- Availability of policy loans from the cash value to help with retirement or emergency needs.
If Jacob decided to add a Chronic Illness Rider of 2% of the benefit amount to the IUL, he would also have access to the death benefit amount during his lifetime. Using the same premiums of $352.13 he would still have a death benefit guaranteed to age 89 and assumed cash value accumulation of $63,021 at age 65 giving him protection if he dies too soon, lives too long, or gets sick along the way. What a great asset life insurance can be!!
Contact your BGA or BBA Life Brokerage to show you which is best for your client: GUL or IUL?