Universal Life (FIUL)
Fixed index universal life insurance is a flexible form of life insurance that offers a combination of five fundamental features (including four that are living benefits) that help set it apart from other types of insurance products.
The first three are the unique tax benefits that are offered with all cash accumulation life insurance products:
1. Income tac-free death benefit
2. Tax deferred accumulation potential (living benefit)
3. Income-tax-free resource (a living benefit!)
What makes FIUL insurance unique is the first three benefits combined with two more:
4. Protection from market volatility (a living benefit!)
5. Flexibility (a LIVING benefit!)
In plain English, it's a product that can benefit you and your family not only in the event of your untimely death but also in both pre-and post-retirement years - helping you financially with every-day life expenses in the short-term, and then providing the potential for supplemental retirement income to help ensure that you have enough financial support if you live longer than expected.
FIXED INDEX ANNUITY (FIA)
So Wha t is a Fixed Index Annuity?
A Fixed iNdex Annuity, or FIA, is a financial product that is set up a s a contract between a contract owner (the buyer) and an insurance company (the seller). FIAs offer a unique combination of benefits that can help achieve long-term retirement goals. No other product offers the tax defferal, indexed interest potential, and optional benefits to protect your retirement assets and income.
How Does It Work?
Fixed Index Annuities can recieve credited interest when the chosen external index has a positive change. The actual amount of interest received, if any, depends on the specific features of the annuity such as caps, spreads and participation rates, which are determined by the issuing insurance carrier. If the value of the index goes down, no interest will be credited, however, the principal and all the previously credited indexed interest is guaranteed and cannot be lost due to market index volatility.
The Power of the Annual Reset
Annual reset is a common FIA feature. At the end of each contract year, your annuity's index values are automatically reset. This year's ending value becomes next year's starting value and any interest credited to your contract is locked in and cannot be lost due to index volatility. When the market index drops, the FIA contract value holds steady. The index does not have to make up previous losses in order for the annuity to earn additional interest. The annuity can earn interest in any year in which a positive market index change takes place, thanks to annual Guaranteed Protection of Principal and Any Credited Interest. However, this does not take into consideration any additional-cost riders, which will reduce the value of the contract by the cost of the rider. This may result in a reduction of principal in any year in which the contract does not earn interest or earns interest in an amount less than the rider charge.