Are you looking for a way to save money for your retirement years and a little extra for loved ones to inherit? Most people choose indexed universal life insurance (IUL) because it provides the highest cash value growth tied to the performance of the S&P 500 index while posing the least risk due to the floor rate. The premiums paid into these indexed universal insurance plans are meant to be flexible enough to meet policyholders’ needs in various situations. Minimum premium payment is built to make it easier to maintain life insurance in all financial conditions to keep the policy from lapsing. Many people use the substantial cash value of an IUL policy to supplement their income in their golden years through partial withdrawals. We drew illustrations from each of the six best IUL providers to demonstrate how their policies increase potential wealth for retirement. The top six indexed universal life insurance (IUL) providers Our six carefully selected insurance companies provide some of the highest cash values in the industry. They also have the best ratings of A- or higher, indicating strong economic stability. Each of our examples uses a hypothetical 37-year-old female policyholder paying a $400 monthly premium. She plans to keep making her premium payments until she turns 65. At this point, she will have paid off her policy and can start taking money out of the cash-value accounts. Each insurer has a different cap rate for the interest that could be earned, but each illustration is run with a fixed interest rate of 6% so the results can be compared. Accordia With a cash value of $169,981, the Accordia Global Accumulator IUL earned our policyholder the most money for retirement. The policy is quite generous, with a minimum growth rate of 2% and a maximum cap rate of 10.5%. With relatively low loan interest rates, the policyholder receives a small break when she needs to withdraw some of the cash value. This policy provides the highest annual distribution of $25,968 from age 65 to 90 (26 years). Securian Four index options are available for the Eclipse Accumulator Indexed Universal Life policy, ranging from the S&P 500 to the EURO STOXX 50. It has excellent cap rates between 9.75% and 10% and a 0% floor rate. Even uncapped growth rates are available through Index Account G, but participation is capped at 60%. The example we used was Index Account A, with a set illustrated rate of 6%. By the 20th year of her policy, our policyholder earned a decent retirement benefit of $163,321. If she chooses annual distribution between the ages of 66 and 90, she will receive $23,758 per year for 26 years. Penn Mutual Insurance Company At the 20-year mark, the Accumulation Builder Flex had the second-highest cash value of $166.203. With a relatively high cap rate of 9.5% and a minimum floor of 1%, it’s easy to see how this plan guarantees that policyholders will profit in any market. In the illustration, the annual distribution from age 66 to 90 is $24,507. Lincoln Financial At the 20-year mark, Lincoln Financial’s Wealth Preserve had the lowest cash-value growth, at only $137,106. Though the cap rates are relatively high, even the Conserve plan offers a healthy 7.75%. The Conserve plan ensures you earn at least 1% regardless of how the underlying index performs. From the policyholder’s 66th birthday until their 90th birthday, the policy will pay out a total of $20,957 annually. AIG or American General The Max Accumulator+ provides two index options for policyholders with participation rates ranging from 15% to 100%. You’ll also be able to choose between a high cap rate of 11.25% and a bonus cap of 8%. When the standard 6% interest rate was used, the non-guaranteed cash value from our example produced a similar return as the other policies. The annual distribution from 66 to 90 years old is $21,923. Symetra The Symetra Accumulator IUL 2.0 policy offers a complex set of options for policyholders who want choices. You can choose from three different index options, each with multiple participation rates for each index within it. Symetra has the most growth potential, with indexes with no cap rate and participation rates of up to 180%. Using our 6% interest rate, the cash value at 20 years was only the fourth highest of the six policies, with $159,855 for retirement and annual distribution of $22,475 from age 66 to 90. Other Good IUL Companies in addition to the top six companies mentioned above: – Nationwide IUL Nationwide is an excellent IUL product with unique features and ratings. Nationwide provides several index options to invest the cash value in your IUL policy. It also lets you add riders to the IUL policy, such as a premium overload protection rider, a premium waiver rider, and the popular long-term care rider, which helps with long-term care costs. Nationwide also has high ratings across the board, including financial strength, customer satisfaction, and consumer complaint ratings. Transamerica IUL Transamerica IUL is a high-quality product. You should be aware, however, that the company has a high consumer complaint rating and even a few lawsuits on its IUL product. The cash value account has a floor rate of 0.75%, a vital feature of the Transamerica IUL product. Most companies provide a 0% floor rate for their IUL products. That means your cash value in your Transamerica IUL policy earns an interest rate of 0.75%, regardless of the market conditions, which is a substantial amount when compared to the interest rates on savings accounts. Another distinguishing feature of Transamerica IUL is a concierge planning benefit, similar to a final expense life insurance policy.
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