3 Ways You Can Benefit From An Indexed Universal Life Insurance Policy

17 June 2022
 Categories: Insurance, Blog


An indexed universal life insurance policy is a type of investment policy that offers a guaranteed payout or return on the face value of your policy. It's a great way to save for retirement, but it can also be used to save for other goals. You can purchase this type of policy with a lump sum, or you can invest the money you put in at regular intervals. The benefit is that your payout will increase each year based on the agreed interest rate. Here are three ways you can benefit from an indexed universal life insurance policy.

Save For Retirement

Most people assume they'll be able to retire with adequate savings in their 401(k) plan, but that's not always the case. With an indexed universal life insurance policy, you can ensure that you'll always have enough money to retire on time and still have funds left over for other expenses like medical expenses and college tuition costs. The guaranteed payout makes it easier to cover all of these potential expenses, so you won't have to worry about them when you're old and gray.

You Don't Have to Worry About Your Dependents Financial Well Being

Most life insurance covers are designed to provide financial security for your family after you pass away. An index-linked universal life policy is the best option for doing just that. The cover provides a death benefit that pays out an amount equivalent to the value of your policy when you die and a cash value that can grow over time. This way you don't have to worry about your dependent's financial wellbeing. For instance, in the event that you die while your kids are still in school if they are registered as beneficiaries they can receive annual benefits, which they can use to discount their expenses.

Tax Benefits

Indexed universal life policies offer many tax benefits, which can help you save money in both the short and long term. For instance, the IRS may allow your beneficiaries to claim tax deferral, which is the future death benefit paid by an indexed universal life policy that is not taxable at that time. This benefit is commonly not counted as income or capital gains when calculating taxable income in any given year. Depending on your state and cover, you can confirm which tax benefits you can enjoy. 

An indexed life insurance policy can help supplement your retirement plan and ensure financial security for your loved ones in case you die. With the insurance cover, you can also benefit from several tax benefits offered by the government. If you don't have an indexed universal life insurance cover already, you should contact a credible insurance company to help you choose a suitable plan.

For more information on indexed universal life insurance, contact a professional near you.