A Guide to Indexed Universal Life Insurance

When it comes to protecting your family’s financial future, one option worth exploring is Indexed Universal Life (IUL) insurance. This product offers life insurance protection while potentially building cash value. This guide will help you understand IUL and determine if it’s the right choice for you and your loved ones.

What Is Indexed Universal Life Insurance?

Indexed Universal Life insurance¹ is a type of permanent life insurance that offers:

1. A death benefit to help protect your beneficiaries
2. A cash value² component with growth potential linked to market index performance
3. Flexibility³ in premium payments and death benefit amounts

The cash value in an IUL policy can grow in two ways:

• Through an indexed account tied to the performance of a stock market index
• Via a fixed interest account

How Does IUL Work?

1. Premium payments: When you pay premiums, a portion goes toward the cost of insurance and fees, while the remainder is added to the cash value.
2. Cash value growth:
   1. For an indexed account, the cash value can earn interest based on the performance of the chosen market index over a specific time period. There are typically caps on potential gains and floors to protect against losses.
   2. For a fixed account, the cash value grows at a set interest rate⁴.
3. Flexibility³: Policyholders can often adjust premium payments and death benefit amounts as their needs change over time.
4. Access to cash value²: You may be able to access the cash value through loans or withdrawals, potentially tax-free.

Advantages of IUL

• Tax-deferred growth of cash value
• Flexibility in premium payments and death benefit
• Ability to access cash value for various needs

In addition, advantages of an indexed account include:

• Potential for higher returns compared to traditional universal life or whole life insurance
• Downside protection against market losses

How to Choose an IUL Policy

1. Evaluate your needs: Determine your coverage needs and financial goals.
2. Compare policies: Look at features such as cap rates, participation rates, and fees from different insurers.
3. Understand the risks: Be aware of the potential for policy lapse if cash value is depleted².
4. Talk to a professional: Work with a professional to determine if IUL fits your overall financial strategy.

Visit WoodmenLife.org/MyChoice to explore WoodmenLife’s Indexed Universal Life product and to take the next step in securing your financial future.

1. IUL is not an investment. It is a life insurance policy product that provides growth potential through index interest crediting. You cannot invest directly in an index.
2. Loans and withdrawals will reduce the policy’s death benefit and available cash value. Loans against the cash value will accrue interest. Excessive loans or withdrawals may cause the policy to lapse. A loan, withdrawal or surrender may be a taxable event. For tax advice, consult with your professional tax advisor.
Certain charges will not reduce when decreasing the face amount of insurance or after taking withdrawals from the policy.
3. Paying less may reduce your cash value and affect the period your certificate stays in force.
4. WoodmenLife declares a fixed interest rate that could change monthly subject to a 2% guarantee.
Universal Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods. This certificate could lose money. WoodmenLife will provide notification if the guaranteed monthly deductions and interests are expected to exhaust the plan’s cash values prior to the maturity date. This certificate is not guaranteed to stay in force until maturity based on minimum guarantees.
Certificate Numbers: ICC18 8730 4-18, 8730 4-18
All products may not be available in all states.

Read More

A Guide to Family Term Life Insurance

Understanding What It Means to Convert Your Term Life Insurance

The Value of Life Insurance for Young Families

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