New Kid on the Block: Indexed Universal Life
by Robert D. Cavanaugh, CLU
Whole life insurance has been around for over 150 years. Universal life was introduced in the early 1980's. Universal Life offered the ability to increase or decrease the premium and death benefit and credited the cash values each year with a current interest rate. Variable life followed, which allowed policy owners to invest their cash values in equities. All three have their plusses and minuses.Now there is a new kid on the block: Indexed Universal Life.Here are the salient features:1. Indexed Universal Life (IUL) is similar to Universal Life (UL); premiums and death benefits are flexible. You can increase or decrease premiums, or even stop them altogether. As your situation changes, you can decrease or increase (subject to insurability) the death benefit.2. IUL is similar to Variable Life (VL) or Variable Universal Life (VUL) as the cash value is based on the increases of one or more stock indexes. The most common are the DJIA, NASDAQ 100 and the S
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