Over the years, Global Index Universal Life (IUL) products have gained popularity due to the potential for greater cash value accumulation. These accounts include guaranteed minimum interest rates and no exposure to market declines, thus preserving policy value accumulation.
The Global IUL policy offers interest crediting methods based on changes in one or more indexes. Generally, the Index Account option is based on U.S. stocks, but it may also be based on additional global indexes that add diversification
The Global IUL account is credited with interest, up to a specified Cap or NO CAP, that is potentially greater than interest credited to traditional universal life insurance. However, since interest amounts credited to the Index Account Options are based, in part, on changes in external indexes, there is greater potential for interest volatility.
The Global index Account Option may be affected by stock indexes, The Global IUL life insurance policies are not an investment in the stock market or the indexes and do not participate directly in any stock or investments.
This policy is first and foremost a life insurance policy whose main purpose is to provide life insurance protection. The policy is not a short term savings vehicle nor is it ideal for short term insurance needs. It is designed to be long-term in nature and should be purchased only if you have the financial ability to keep it in force for a substantial period of time.
There are additional factors that will impact your life insurance decisions, but if you are looking for a product with a guaranteed minimum interest rate and access to potentially higher policy value accumulation, an index universal life insurance policy with an Index Account based on global indexes may be an option.
S&P 500® Index
The S&P 500® Index tracks500 large cap commonstocks actively traded in theUnited States, and is one ofthe most well-known marketbenchmarks.
EURO STOXX 50® Index
The EURO STOXX 50® Indexis comprised of 50 large capstocks from leading Europeanblue-chip companies
Hang Seng Index
The Hang Seng Index has along history beginning in the1960s and is one of the mostrecognized indicators of thestock market performance inHong Kong
The Global Index Account is different from other index accounts based on a single index like the S&P 500®.
It bases interest credits, in part, on changes in the S&P 500® Index, the EURO STOXX 50® and Hang Seng Index
Index changes may be positive or negative, but the policy have two Guaranteed.
Minimum interest rate:
However, you have the security of knowing you will never be credited less than the guaranteed minimum interest rate(0%-1%).
Excess Index Interest
The Global Index Account uses a weighted average to calculate Excess Index Interest. To determine the Excess Index Interest rate, each Index Change is multiplied by its corresponding weighting to arrive at the weighted index change percentage.
The weighted index change percentage is then compared to the Cap and the lower of the two is credited to the Policy at the end of each Segment Period.
Index Weighting Explained To arrive at the weighted index change percentage, we apply the following factors:
50% to the percentage change in the S&P 500® or the EURO STOXX 50®, whichever is higher
30% to the percentage change in the S&P 500® or the EURO STOXX 50®, whichever is lower
20% to the percentage change in the Hang Seng Index
CAP interest rate :
The maximum percentage of index change your index account can be credited(12%,13%, 15%,20%).
or NO CAP but has participation rate .
Participation Rates
The Index Universal Life does not use a participation rate method in calculating Excess Index Interest.
Caps
The Cap is the maximum percentage of Index Change that can be used to determine the amount of Excess Index Interest credited to an Index Account Segment. At the end of each 12-month Segment Period, we compare the Cap to the Index Segment’s index change percentage.
The interest crediting rate equals the lesser of the Cap or the Index Segment’s index change percentage.
The Cap is set by the Company at its discretion at the beginning of each Segment Period. The Cap may increase or decrease and may differ between Index Account Segments.
Tax-Free Death Benefit
Tax-Deferred Earnings
Tax-Free Transfers
Tax-Free Loans and Cash Withdrawals
Security of a No-Lapse Guarantee
Flexible Premium Payments
Income Protection Option (IPO)
Death Benefit Options: level or Increasing