What is an indexed universal life policy?
Indexed Universal Life insurance (IUL) is similar to a fixed universal life insurance policy except that it has a different crediting method for applying interest. Interest credited is linked, in part, to the movement of a stock market index over a period of time. The client never buys or participates directly in the index; it is simply a measuring tool to define the crediting rate. If the market index goes up, the clients account value grows, if it goes down, there is a minimum amount to protect the client (often zero). So the client has upside potential without the downside risk associated with stock market indices. How does an indexed universal life policy work? An IUL product usually offers a choice of index options in which the client can choose to allocate premiums. If the client doesnt want to have all values subject to index performance, there is also a choice (typically) for a fixed interest account. Then, a crediting method is applied that either measures performance of the i
