Indexed universal life (IUL)

Start with the insurance purpose.

IUL is a form of permanent life insurance with cash-value features and interest-crediting options tied to an index formula. It is not direct ownership of stocks or an index fund. Consider the need for a death benefit, your budget and how long you can sustain funding.

An index floor does not remove policy costs.

Caps, participation rates, spreads, policy charges and crediting periods affect results. A floor on index credits does not prevent account value from declining because of charges, loans or withdrawals. Review what can change and what the contract guarantees.

Read illustrations as scenarios.

Nonguaranteed illustrated values are not forecasts or promised returns. Request the guaranteed values, lower-crediting scenarios and an explanation of how premiums, charges and loans affect the policy over time. Flexible premiums do not mean a policy can remain in force without sufficient funding.

Cash access needs care.

Loans accrue interest and can reduce benefits; withdrawals and surrender may have charges or tax consequences. A lapse with an outstanding loan can create tax problems. Do not assume that an IUL creates guaranteed tax-free retirement income.

Questions to bring to us.

• Why does permanent coverage fit my needs?
• Which values, charges and benefits are guaranteed?
• What funding would be needed under less favorable scenarios?
• What happens if I reduce premiums or take a loan?
• What surrender period and costs apply?
• How will we monitor the policy after purchase?

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