Universal life insurance might be a viable choice for those seeking wide coverage that offers flexibility and lasts a lifetime (provided payments are paid). Regardless of your circumstances, you may adjust your premiums and death benefits on most policies, enabling you to manage your money wisely over time. In this article, we will explore 7 Best Indexed Universal Life Insurance (IUL) Companies.
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What is Indexed Universal Life Insurance (IUL)?
The possibility of growing cash value is combined with the death benefit protection of a standard whole life insurance policy in the form of an Indexed Universal Life Insurance policy. An Indexed Universal Life insurance policy limits your adverse risk while allowing your money to grow, as its cash value growth is linked to one or more stock market indices.
7 Best Indexed Universal Life Insurance (IUL) Companies
Allianz Life insurance
- Protection against death benefits, tax-deferred accumulation, and adjustable premiums that may be adjusted to meet your changing needs are all offered by Allianz Life Pro+ Advantage.
- You can purchase an Allianz Life policy from age 0 to 80.
- Numerous alternatives for index allocation are available at Life Pro+ Advantage. The insurer keeps track of these index options, and on the anniversary of your policy, the crediting method credits any indexed interest owed to you to the cash account.
- When you reach your annual index cap, the Allianz Life Pro+ Advantage policy’s ability to lock in your return before the end of your index period may be useful.
- You can choose between manually locking in your rate or the auto-lock feature.
- Two types of loans are available: a fixed loan option and an indexed policy loan with a guaranteed 5% rate.
- Excellent advanced planning division for help with estate and business planning, including split dollars, buy-sell agreements, executive bonuses, and critical personnel strategies.
Lincoln Financial
Lincoln Financial offers four life insurance coverage options that include:
- Lincoln WealthAccumulate IUL offers four indexed accounts, which are correlated with the performance of the S&P 500 index and offer bonuses for cumulatively good gains.
- It protects a premium rider return in the event that the market does not yield positive returns and permits changes to index account options.
- The interest crediting rate on the Lincoln LifeReserve Indexed UL Accumulator is guaranteed to never drop below 1%, so you can be sure that your account will always have positive interest credited to it.
- The WealthAccumulate has replaced Lincoln WealthAdvantage Indexed UL and is only offered in a few states. The Lincoln WealthAdvantage offers three design options for legacy planning and wealth protection.
- The Lincoln WealthPreserve IUL policy has built-in flexibility and ensures long-term death benefits. One of the few IUL plans that offers a floor of 1% and a guaranteed ceiling of 8.75%.
- With just one single policy, the Lincoln WealthPreserve Survivorship Indexed UL policy provides survivorship protection for two lifetimes. At the end of the second insured’s life, it pays a death benefit free from income taxes.
- The company offers protection against permanent life insurance and convertible term life insurance. Term life insurance provides coverage for a specific time, or “term,” and is an easy and reasonably priced option for safeguarding loved ones.
Ameritas FLX
- The Ameritas FLX Living Benefits Indexed Universal Life insurance performs well in three areas: Dependable Protection, Potential for Growth, and Downside Protection.
- A living benefit feature that, if the insured is found to be unwell, pays a portion of the death benefit in advance.
- Reliability is demonstrated by a death benefit assured to be there for your surviving loved ones in times of need. This death benefit is only accessible with life insurance and is paid to your beneficiary tax-free.
- Growth in your cash worth depends on how well equity indices, such as the S&P 500, perform or a fixed account. While some of these index accounts have caps, others don’t.
- A “floor rate,” usually 0% or higher, ensures that, even in the event of an index’s bad performance, your account will never experience a loss on an index to which it is connected. This provides the necessary downside protection.
- Lower premium commitments would be suitable because of the policy’s $50,000 tiny face amount.
- Ameritas is a desirable option for individuals looking to include IULs in their financial plans because it emphasizes tailored solutions and policyholder satisfaction.
North America
- Term insurance plans convertible to any applicable Indexed Universal Life insurance policy type.
- There are three loan choices available. Standard policy loans, variable loans, and fixed participating loans.
- Currently, family and business planning are the leading market priorities.
- Split-dollar plans, executive bonuses, buy-sell agreements, and REBAs (restricted executive bonus arrangements) are examples of advanced planning nowadays.
- North America boasts a distinctive employee-owned business model.
- Excellent advanced planning division for help with estate and business planning, including split dollars, buy-sell agreements, executive bonuses, and critical personnel strategies
- Instead of being determined by a fixed interest rate, the return on the cash value is determined by the performance of an underlying market index, like the S&P 500.
- Right now, family and business planning are the leading market priorities.
National Life Group
- National Life provides three different types of IUL insurance, focusing on catering to specific market niches: FlexLife, PeakLife, and SummitLife.
- The simplest indexed universal life insurance policy National Life offers is called FlexLife. The coverage is accessible to anyone 0 to 85 years old and has a minimum death benefit of $50,000.
- PeakLife is only available to insureds between the ages of 18 and 85, with a minimum face amount of $1,000,000. It is intended for the growing wealthy population that requires life insurance coverage exceeding $1,000,000.
- The minimum face value for National Life Summit Life is $1,000,000. It is offered to insureds between the ages of 0 and 85.
- SummitLife is only available to wealthy consumers. The policy is intended to assist with living benefits, wealth transfer planning, and the possibility of a lifetime income guarantee.
- SummitLife offers a ten-year sliding surrender charge period. Standard Loans, Participating Fixed Loans, and Participating Variable Loans are the accessible lending alternatives.
- Individual retirement accounts allow users to save money while deferring taxes. The organization offers conventional and Roth IRAs.
- The National Life Group offers mutual funds in a substantial market. These consist of stock/equity funds, money market funds, index funds, and income/bond funds.
Pacific Life
- Pacific Life’s most extensive life insurance product line is index-linked universal life insurance.
- The five offered items are Pacific Horizon IUL, Pacific Trident IUL, Pacific Discovery Xelerator IUL 2, Pacific Indexed Accumulator 6, and Pacific Indexed Estate Preserver 3.
- Pacific Horizon IUL offers indexed universal life insurance with a customizable premium. It has a fixed account with a minimum guaranteed interest rate of 0.5%.
- The Pacific Horizon Indexed Universal Life insurance offers S&P 500 index-linked 1-year or 3-year indexed accounts, as well as a 1-year Volatility Control account linked to the BlackRock Endura index.
- Variable life insurance plans provide a significant degree of flexibility. The Pacific Admiral VUL is a flexible premium variable life insurance policy allowing you to accumulate cash value based on your selected investments.
- Riders on your life insurance policy allow you to add features or additional coverage to your policy as needed. Policy types may have different rider availability.
Penn Mutual
- Through your indexed account alternatives, you can benefit from market-based growth potential. Still, unlike direct market investments, your policy will always retain value due to poor index performance.
- Since there is no one-size-fits-all approach to life insurance, you may tailor your policy to meet your unique needs with the range of riders offered by Accumulation IUL.
- Interest is paid on your account(s) by changes in the S&P 500 Index from the start of the segment period to its conclusion.
- Specific riders are free of charge and automatically included in your policy. These riders may offer additional protection in the event of a serious illness or, if you’re a business owner, coverage for important staff members.
- At the end of each segment period, your credited interest is guaranteed and not affected by future index performance.
- You can either preserve your insurance values in the same accounts or transfer them to different indexed or fixed accounts as needed.
Conclusion
In most cases, you can increase or decrease the death benefit with IUL insurance and design variable rates. Generally, policyholders can choose how much money goes into fixed-rate or equity-indexed accounts. Additionally, you can add optional riders that include assured death benefits and no-lapse. Indexed Universal Life insurance plans are linked to indexes rather than specific stocks, which reduces risk and offers a hedge against solid downtrends. They also have no annual contribution restrictions.
Frequently Asked Questions
Which drawbacks come with Indexed Universal Life Insurance?
Indexed Universal Life insurance plans have several alluring advantages for policyholders but have certain drawbacks. An IUL’s cash value is not credited with interest if the tracked index declines because it is linked to a market index. Although flexibility is desirable, you may have to spend more on fees, commissions, and other add-on expenses than other policy types to enjoy this benefit.
Although the base return on IUL policies is guaranteed, the maximum amount of money that can be accumulated is capped at less than 100% of the policy value. Due to a cap on the rate of return, IULs might also be less appealing during periods of strong return on indices.
How does Indexed Universal Life Insurance work?
Since an IUL policy offers adjustable premiums and lifelong death benefit protection, it functions similarly to a typical Universal Life policy. The way the cash value increases is different. By connecting the growth potential of an IUL to one or more stock market indices, you can take advantage of market gains while lowering your downside risk.
How to choose the best Indexed Universal Life Insurance policy for you?
When choosing the best indexed universal life insurance, consider the following key factors: the company’s financial strength, product offerings like features and fees, flexibility for different IUL policies offered by companies, and agent/broker expertise.
