An IUL combines three key features that work together to protect and grow your money.
Provides a death benefit to your beneficiaries, generally income-tax-free under current tax law.
A portion of your premium may accumulate cash value over time.
Cash value growth may be credited based on the performance of a selected market index, subject to policy terms, caps, participation rates, and spreads.
One reason many people consider an IUL is the opportunity to participate in market gains without directly investing in the market. Potential benefits include:
A key feature of many IUL policies is a floor, often 0% (varies by policy). This means:
| Index Performance | Example Credited Interest* |
|---|---|
| +12% | May receive credited interest subject to policy cap |
| +5% | May receive approximately 5% |
| -15% | May receive 0% (depending on policy floor) |
*Actual results vary by policy, index strategy, caps, participation rates, fees, and expenses.
While IULs offer downside protection from direct market losses, they are not designed to capture all market gains. Policyholders should understand:
An IUL may be suitable for individuals who want:
Think of an IUL as a vehicle designed to help protect your principal from direct market losses while allowing you to participate in a portion of market gains.
You may not capture all of the market's upside, but you may avoid the direct impact of market downturns.
Indexed Universal Life insurance is not a security or direct investment in any stock market index. Policy values are subject to fees, expenses, insurance costs, and policy terms. Guarantees are based on the claims-paying ability of the issuing insurance company. Policy loans and withdrawals may reduce available cash value and death benefits. Consult a licensed insurance professional and review the policy illustration and contract carefully before making a decision.
Accelerated Benefit Riders (ABRs), sometimes called Living Benefits, may allow eligible policyholders to access a portion of their life insurance death benefit while they are still living if certain qualifying health events occur.
Instead of waiting for the death benefit to be paid to beneficiaries, qualifying individuals may be able to receive a portion of that benefit earlier — to help with medical expenses, caregiving needs, lost income, or other financial obligations.
Different riders respond to different qualifying health events. Availability and terms vary by carrier.
Available if you're diagnosed with a qualifying terminal illness.
May allow acceleration of benefits if the insured becomes unable to perform two of the Activities of Daily Living (ADLs), or upon cognitive impairment:
BathingDressingEatingToiletingContinenceTransferringEligibility requirements vary by policy and carrier.
May provide benefits upon diagnosis of certain covered critical illnesses, which may include:
Aorta Graft SurgeryAplastic AnemiaBlindnessCancerCystic FibrosisALS (Lou Gehrig's Disease)End-Stage Renal FailureHeart AttackHeart Valve ReplacementMajor Organ TransplantMotor Neuron DiseaseStrokeSudden Cardiac Arrest
May provide benefits for qualifying severe injuries resulting from accidents, such as:
Major burnsParalysisTraumatic brain injuryComaOther covered catastrophic injuriesCoverage definitions vary by insurer.
Some chronic illness or accelerated benefit riders may include benefits for qualifying cognitive impairments such as:
Alzheimer's diseaseDementiaOther severe cognitive disordersThe insured typically must meet policy-specific eligibility requirements and certification standards.
Life insurance is often purchased to protect a family after a death. Accelerated Benefit Riders may provide access to funds when they may be needed most — during a serious illness or health crisis. Potential uses include:
Imagine a person owns a life insurance policy with a $500,000 death benefit and later experiences a qualifying chronic illness.
Depending on the policy provisions and eligibility requirements, they may be able to accelerate a portion of the death benefit while living to help cover care expenses and financial obligations.
Any accelerated benefits paid will generally reduce the remaining death benefit available to beneficiaries.
Accelerated Benefit Riders are optional policy features available on certain life insurance policies. Benefits are subject to policy terms, conditions, limitations, exclusions, and eligibility requirements. Receipt of accelerated benefits may affect public assistance eligibility and could have tax consequences. Consult a licensed insurance professional, tax advisor, or legal advisor regarding your specific situation.
A life insurance policy with Accelerated Benefit Riders may help provide financial protection not only for your beneficiaries after death, but also for you during certain qualifying health events while living. Always review the policy contract and rider details carefully to understand how benefits work and when they may be available.
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