Myth or Fact: Are Indexed Universal Life Policies “Risky”?

Myth:  IULs are risky… You can lose your money if the market crashes.

Fact: Indexed UL policies are designed to protect your principal.  They offer market-linked growth potential without subjecting your cash value to market losses.

Furthermore, an IUL isn’t invested in the stock market; it’s linked to a market index, such as the S&P 500. That means if the market drops, your policy’s credited interest is simply 0%, not negative (known as “Zero is Your Hero”).

If the market rises, you can receive interest credited up to the cap or participation rate. This “floor and cap” structure provides a buffer for growth. No downside risk to your accumulated cash value from market volatility, and upside potential when the market performs.

Think of an IUL as a financial safety net. You don’t receive the whole rollercoaster ride of the market, but you also don’t incur a crash when things get rough.

Bottom line, IULs are not risky when properly structured.  They’re a conservative, long-term vehicle designed to grow wealth tax-free, protect your family with life insurance, and provide income you can’t outlive. All without ever exposing your cash to market losses.

Want to learn how IULs compare to Roth IRAs or 401(K)s? Reach out via call or email, and I’ll generate illustrations that compare products and carriers for further discussion on the benefits to your clients.

Jeff Snowden