Indexed universal life insurance is a type of permanent life insurance that offers cash value accumulation and the potential for tax-advantaged growth. These policies are commonly used for retirement income, long-term care benefits, and tax planning, all the while protecting your family from unexpected loss. With this type of policy, you have the flexibility to choose how your money is allocated. Your policy’s cash value can be allocated in various ways, including fixed guaranteed options, SP 500 index, and other volatility-controlled indexes. No matter what allocation is chosen, there is no risk of loss. This means that your cash value can potentially grow at a higher rate than it would with a traditional fixed-rate policy.
In these types of tax-advantaged policies, you will not have to pay taxes on any growth in the cash value of your policy so long as you receive it as a loan. Recent changes in the US tax code have made these types of policies even more advantageous options for those looking to maximize their retirement goals.
If you are considering buying life insurance, then indexed universal life insurance is worth considering if retirement income, long-term care benefits, and tax planning are important factors in your decision. These types of policies are not for everyone and may or may not be the right fit for you. Our team of specialists at Trinity Insurance Partners is here to educate you on this unique form of life insurance.