Index Universal Life
Considered the most flexible life insurance of the three types of life insurance. Universal Life allows you to adjust the amount of your policy or nominal amount, as well as the premiums you pay – limited payments – and can generate cash value in your policy without paying the current gains tax on the increases. In addition you can potentially access the funds using loans and tax-free withdrawals.
The flexibility of universal life allows you to stop paying premiums if there is enough accumulated value in your policy to cover the cost of insurance each month. If you wish, you can pay additional premiums to accumulate the accumulated value in cash.
You can also increase or decrease your death benefit depending on your life insurance needs. An increase may require additional subscription.
Fixed Universal Life and Universal Indexed Life
Two of the most popular types of Universal Life policies are Fixed Universal Life and Universal Indexed Life. One of the main differences between them is how the policy interest is credited.
With a Traditional Fixed Universal Life policy, the interest rate is declared by the company.
Index = Universal life credits interest based on changes in the value of a major market index.
Both offer different degrees of guarantees and returns, depending on your decision for the risk.