Equity index life insurance is a form of universal permanent life insurance wherein the cash value is determined by a certain index, like the S&P 500. While this type of policy can appear to be a tad more complex than other types of coverage; it is possible to understand how it works and then find cheap equity index universal life insurance rates if you decide that this policy is the type of coverage that will best meet your needs.
With an EIUL policy, if the index is higher at the end of the year the cash value of your policy will increase. If the index goes down, your cash value will not increase, but instead earn the minimum amount of interest guaranteed in your equity index policy.
Note that the amount credited to your equity index life insurance policy is determined by a number of factors such as participation rate, asset fees, and caps.
The participation rate is a percentage of the increase in the index that will determine how much money is credited to the cash value of your policy.
Asset fees are a stated percentage that is deducted from any positive increases in the index.
Caps represent the maximum annual increase that can be credited to the cash value of your policy.
There are several advantages to an equity index universal life insurance policy. One of the advantages is that you have a greater potential for higher interest rates then a more traditional universal life insurance policy. In addition, an EIUL policy offers you more protection from market decreases than a variable life insurance policy offers.
One of the main disadvantages to an EIUL policy is that this type of life insurance policy carries a higher risk factor than a traditional universal life insurance policy. Also, the cap rate may limit the maximum rate you can earn in a good market compared to the potential earnings of a variable rate life insurance policy. You also may be charged by the insurance company on a periodic basis.
Many EIUL polices come with such choices as a flexible premium payment plan, survivorship life, and a single-premium insurance policy.
To determine if an equity index life insurance policy may be a good choice for you and your family if a variable life insurance policy looks good, but seems too risky for your financial strategy, and if the guarantees of a universal life insurance policy make you feel more comfortable, but you feel the potential for accumulating cash value is too low.
Some of the main features of an equity index life insurance policy include, but are not limited to, tax deferred interest earnings, tax advantaged insurance protection, cash value protection against declining markets, annual lock-in of earnings, guaranteed minimum yearly returns, premium flexibility, and cash value access.
Before purchasing any type of insurance, including an equity index life insurance plan, do some research on any company you may be considering. In addition, compare equity index life insurance features, benefits, and premiums before choosing this or any type of insurance policy. Remember, the amount of interest you will be credited is in the hands of the insurance company you chose to use for an equity index life insurance policy, and the policy is only as solid as the insurance company you select.
You can learn about the financial strength of any insurance company you may be considering at A.M Best, Moody?s, Standard & Poor?s, and other independent rating companies.
To find cheap equity index universal life insurance quotes and cheap life insurance quotes on other types of policies from various life insurance companies then be sure and compare rates from at least 3 different companies. Visit www.CheapoLifeInsurance.com to compare rates easily and try to save yourself some money.
Get started finding cheap life insurance today!
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