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What Makes Indexed Universal Life Insurance So Popular?

by Rick Mcguinness

If you've decided that it's time to buy life insurance, you've probably started looking at the many options available to you. If you've ruled out term life policies because you want something that will provide you coverage for the rest of your life, you might be considering an indexed universal life policy. Before you make that decision, it's beneficial to understand what makes these policies the right choice for some people. Here are some of the advantages of an indexed universal life insurance policy.

No Negative Returns

One of the most significant benefits of an indexed universal life insurance policy is the guarantee that your policy will never post negative returns. Even if the index that your policy is measured on should decline, you are guaranteed to retain the established returns without suffering any loss. This is important when the cash value and returns on the policy are something that you're financially dependent upon to maintain the policy.

Ongoing Coverage Without Ongoing Premiums

Because of the consistent cash value generated by an indexed life insurance policy, you can be confident that your policy's cash value will cover your premiums for you after a certain point. That means you'll have the benefit of ongoing life insurance protection without the added expense of the premium during those later years, which is when money is often less abundant. This is a great reason to consider indexed universal life for your policy.

Potential Significant Returns

Many people find that they prefer the option of indexed universal life for their policy simply because of the potential for significant returns. There are certainly possibilities for the index you're investing in to record substantial gains, which would then translate to significant returns on your policy as well. If you're willing to be a little more aggressive about your investment up front, you may find that the potential returns of an indexed universal life policy are worthwhile.

Greater Flexibility On Investment

Another reason that indexed universal life has become more popular is because of its flexibility. You have the option to define just how aggressive you are willing to be about your investments, playing it safe if you prefer so that you have consistent, guaranteed returns or gambling a bit more with an aggressive approach that could possibly net you far more. 

These are some of the reasons why people prefer indexed universal life for their life insurance needs. Talk with your agent today about your future plans, your current finances, and the goals you hope to achieve. He or she can help you choose the right policy for you.