What is an IUL and how does it work?
An IUL gives you the ability to safely grow your money and then borrow money from your account when you need it.
The best part…
When you borrow money from an IUL it doesn’t decrease your account value (the amount of money that you’ve contributed). So all of the money you’ve contributed grows at the interest rate you built into your policy.
Basically, it’s a safe way to contribute to the stock market with healthy growth. And once your IUL grows enough, you can finance aspects of your life by taking out a loan from yourself vs paying interest to a bank, credit union, or finance company.
What does IUL stand for and why was it created?
Indexed Universal Life policy. Let’s breakdown the first part.
Created in 1997, the Indexed Universal Life (IUL) is a life insurance contract that provides a rapid growth cash accumulation feature that is indexed to the market and has a 0% floor during times of market volatility. That means that your money freezes if the market crashes or if the specific stocks you’re indexed to drop below a zero percent interest rate. That’s what makes an IUL a safe place for your money.
What does it mean to be indexed to the market?
When you design your IUL, you choose how you want to index (attach) your money to the stock market. Your index will determine the interest rate of growth for your money. Typically, IULs index with a 6-12% interest rate.
What makes an IUL unique?
The cash accumulation feature of an IUL gives you, the policy owner, the ability to borrow and pay back liquid cash from your policy as often and as frequently as you would like.
Since you are able to design your IUL, you can build it to accomplish your financial goals.
How do you design an IUL?
You work with an agent to determine:
- how much you want to contribute,
- how much you plan to use
- when you want to contribute (all at once, annually, or monthly),
- how you want to index your money to the market,
- and how the IUL will help you accomplish your financial goals.
What are the two most common uses for an IUL?
Entrepreneurs utilize IULs to fund their business or specific projects in their business.
Families utilize IULs to finance things like a car or a house so they don’t have to pay interest on a loan.
What is my favorite IUL?
Why?
The Life Accumulator allows entrepreneurs to access the cash value of their policy quickly and frequently. For clients that are looking to make their money grow while making moves to grow their money, this policy gets you on the right track with ease and grace.
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