Sunday, April 25, 2010

What is equity indexed universal life insurance?

Equity index universal life insurance, or EIUL, is a form of permanent universal life insurance that ties the performance of the policy’s cash value account to a stock market index.

Permanent Coverage


EIUL policies are permanent life insurance products that provide death benefits that never expire. Coverage will remain in force for as long as you continue making necessary premium payments.

Cash Value Accumulation


EIUL policies, like all permanent life insurance products, accumulate cash value. A small portion of every premium payment made is set aside in a separate tax-advantaged account within the policy.

Market-Linked Growth


The growth of cash value in an EIUL policy is tied to a particular stock market index or benchmark. If the chosen index increases in value, the cash value account will also increase.

Downside Protection


If the index linked to an EIUL policy decreases in value, the cash value account is protected by a minimum interest rate guarantee, resulting in stock market downside protection.

Flexible Premiums


Like ordinary universal life insurance policies, EIUL products offer flexible premium payments. As long as enough cash value exists to cover the cost of insurance, premiums can be reduced or even eliminated.

References


Insure: Equity Indexed Universal Life Insurance – The Best of Both Worlds?
MEG Financial: EIUL – A Unique Insurance Opportunity




This article is a Twisted Nonsense Exclusive! (04/25/2010)