Indexed universal life insurance policies sometimes get a bad rep, unfairly, with a lack of knowledge being a constant culprit. The reality is that these types of polices can be helpful in a number of important ways, including tax benefits and faster growth. If you're on the fence about purchasing an indexed life insurance policy, don't let a myth deter you. Make sure you know the benefits this type of policy offers.
Paying taxes is an unavoidable responsibility, so finding ways to cut down your tax responsibility where you can is a more than welcomed process. An indexed universal life insurance policy can actually offer this benefit. With this type of policy, any cash value accumulation is tax deferred, unlike some other options available. The same is true when it comes to any death benefit paid out to your beneficiaries, which is especially important if you don't want to leave loved ones with a financial burden.
Should the need arise for you to take out a loan against your policy at some point, any loan dollars you receive can also be paid out to you without a tax penalty. Unlike some other policies where premiums are paid with pre-tax dollars, indexed premiums are made from post-tax dollars. Taking care of taxes on the front end helps you avoid this expense later on down the line.
A solid future for you and your family involves financial stability. An indexed universal life insurance policy can help you accomplish this faster than some other more traditional life insurance policy options. The reason for this is that indexed policies typically increase in value at a much higher rate than other options, including whole life policies. For someone who purchased a policy later in their life, a faster growth rate can still help ensure they leave behind a sizeable policy equipped to meet the needs of their family.
Additionally, there is less risk of loss when it comes to any growth earned. Indexed polices also come with built-in protection in the form of a floor rate. Even if the market takes a significant hit, the floor rate, or starting rate, of the policy will never change. In simpler terms, the original cash value stated in the policy will never lower regardless of market performance.
Make sure you aren't overlooking the benefits of an indexed universal life insurance policy. Make sure you are choosing an option that will offer the best financial security for your family.
Have you done everything possible to prepare for your family after you pass away? So many of us think that there is always more time to take out a life insurance policy or think that we cannot afford one. What we fail to remember is that there may not be a tomorrow. If you were to pass away today in a tragic accident, would your family be able to survive? Would your family be able to continue living in your home? I started working on this blog after I went to a friend's funeral. It was that moment that I realized that I wasn't ready for death and that if it was to happen at that time, my family would struggle to survive.