Florida Indexed Universal Life Insurance (IUL)

Combines a death benefit with cash value that is tied to the performance of a market index.

Florida indexed universal life (IUL) insurance is a type of permanent life insurance that combines a death benefit with a cash value component, that has the potential to grow based on the performance of a market index, like the S&P 500.

A portion of your premium goes towards covering the life insurance component and administrative costs, while another part is allocated to the cash value account. Florida indexed universal life insurance (IULs) may be suitable for individuals seeking:

Permanent life insurance coverage.
The potential for greater cash value growth than traditional universal life, while still having some protection from market losses.
Flexible premium payments.
Potential for tax-free income in retirement through policy loans.
Repositioning with strategic rollouts from eligible retirement accounts are available as well to be done on a tax-free basis.

It is important to remember that IUL policies are complex and may not be suitable for everyone.

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How Do IULs Work? What Are Potential Benefits & Drawbacks?

How Florida Indexed Universal Life Insurance Works

- Premium Payments: A portion of your premium goes towards covering the life insurance component and administrative costs, while another part is allocated to the cash value account.

- Cash Value Growth: The cash value's growth is tied to the performance of a chosen market index, but with a significant difference: your money isn't directly invested in the market.

- Index-Linked Interest: The insurance company credits interest to your cash value based on the index's performance, subject to a floor (guaranteed minimum return, often 0%) and a cap (maximum return). This means you benefit from market gains up to the cap, but your cash value won't decline if the market falls below the floor.

- Accessing Cash Value: Once sufficient cash value accumulates, you can access it through loans or withdrawals, potentially providing tax-free income streams in retirement or for other financial goals.

Potential Benefits

- Lifelong Coverage: Provides permanent life insurance protection, ensuring a death benefit for your beneficiaries.

- Cash Value Accumulation: Allows for tax-deferred cash value growth linked to market indices, offering potential higher returns compared to traditional universal life policies.

- Downside Protection: The floor rate protects your cash value from market downturns.

- Tax-Advantaged Growth & Income: Cash value grows tax-deferred, and loans taken against the policy are generally tax-free.

- Flexibility: IULs offer flexible premiums, allowing you to adjust payments based on your financial situation.

Potential Drawbacks

- Complexity: IUL policies can be more complex than other life insurance options, requiring a thorough understanding of their mechanics and features.

- Costs & Fees: They often come with various fees, which can impact cash value growth.

- Limited Returns: The cap on returns means you won't fully participate in strong market growth.

- No Dividends: Unlike some other permanent life insurance policies, IULs generally don't pay dividends.

It's crucial to carefully consider your financial goals, risk tolerance, and discuss with a qualified advisor whether an IUL aligns with your individual needs before making a decision.

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Receive tax-deferred growth of your cash value (which you can also access as needed) with minimal downside risk while you are alive, and protect your loved ones from your unexpected passing with a tax-free death benefit.

We'll show you how and answer any questions that you have. Click on the button below to get your free quote today.

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