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Like traditional Fixed Universal and Variable Universal Life, it is a flexible premium contract. However, it differs in the following ways:
| PRODUCT FEATURE | FIXED | VARIABLE | INDEXED |
|---|---|---|---|
| Death Benefit | YES |
YES | YES |
| Tax Advantaged | YES | YES | YES |
| Guaranteed Interest Crediting | YES | NO | YES |
| Share Directly/Indirectly in Market Gains | NO | YES | YES |
| Protection from Market Losses | YES | NO | YES |
| Inflation Protection | DEPENDS | YES | YES |
How it Works
The premiums you place into the contract (less insurance expenses) earn interest based on a stated participation rate against, for example, the return the Standard & Poor's 500 Index.
The participation rates are declared annually or for the full term of your plan. At the anniversary of your policy, the insurance company will multiply the participation rate by the percentage increase in the S&P 500 over that same period and credit your account accordingly.
If, the S&P 500 were flat or declined over any said period, most carriers will also credit a 2.5-3% minimum return.
There are four commonly used indexing methods. Your gains depend entirely on the method used. Each method has certain advantages and disadvantages, depending on how you view the movement of the stock market over any given period of time.
Click HERE for a BRIEF explanation of each.
Good Idea - Right Time
Regardless of the type of policy and indexing method you choose, the product and its link to the broad stock market index is potentially a solid, long-term insurance investing strategy.
There are virtually no management responsibilities and there's a very good possibility that over time, you'll potentially earn greater returns than traditional fixed insurance policies.
Lastly, it should be noted that this product is best suited for insured's/owners who are between the ages of 0 and 55.
Action To Take If you would like to learn more about Equity-Linked
Life and receive a no-obligation quote, |
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Copyright © 1998
Fielder Financial Management, LTD.
All Rights Reserved.
Securities are offered through Girard Securities, Inc.
member FINRA, SIPC.
Mark R. Fielder, Registered Principal. CA. Insurance Lic. # 0690576.
