Equity-Indexed Universal Life (EIUL) Insurance
Equity indexed universal life insurance is a permanent life insurance policy with investment opportunities. With the help of a financial advisor, you can turn part of your cash value into a sizable investment that can rival the growth of 401k.
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Schimri Yoyo
Licensed Agent & Financial Advisor
Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states and over 20 years of experience. During his career, he has held roles at Foresters Financial, Strayer University, Minnesota Life, Securian Financial Services, Delaware Valley Advisors, Bridgemark Wealth Management, and Fidelity. Schimri is an educator eager to assist individuals and families in ...
Licensed Agent & Financial Advisor
UPDATED: Jul 12, 2023
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.
Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Jul 12, 2023
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.
Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Equity indexed universal life insurance is a type of permanent life insurance.
- It’s life insurance designed to behave like a 401k.
- Indexed universal life insurance is affected by Stock Market changes.
- Hire a professional to get fully understand how Equity IUL works.
Equity indexed universal life insurance is a permanent life insurance policy that has stock market investment perks. It’s one of the more complex life insurance policies where a financial advisor is recommended.
Continue reading this guide to learn general information about the equity-indexed universal guide and how much it costs per month.
How does equity-indexed universal life insurance work?
To understand how equity-indexed universal life (IUL) insurance works, you’ll need to know what it is. Equity indexed universal life insurance is a life insurance policy that allows you to pay for life insurance coverage, accumulate a cash value, and invest in the stock market.
When you finally get an equity-indexed universal life insurance policy, you’ll pay your monthly rates.
Your monthly premium will cover life insurance benefits, and another portion of your premium will go toward an account that accumulates cash. You can take part of your cash value and put it into stock-influenced investments.
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How does equity-indexed universal life insurance compare to a 401(k)?
401(k) retirement is a standard retirement savings option for many workers in the United States. 401(k) plans are known for their rapidly growing values and ties to the Stock Market.
However, equity-indexed universal life insurance has life insurance attached to the investment to the stock market and a savings account with the life insurance company. Also, you can borrow money against your death benefits under equity-indexed universal life insurance.
According to the Internal Revenue Service (IRS), retirement savings don’t have the same flexibility as life insurance investments. You can move life insurance savings to another company and even cash out without tax penalties. Most 401(k) distributions don’t allow you to do that.
Do I need to hire a financial advisor?
Stock market investments are complicated. The market is always changing and contains a lot of jargon that may confuse you. However, as you invest in the stock market, a financial advisor can help you understand how to use your life insurance savings in an equity indexed universal insurance.
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What are the pros and cons of equity-indexed universal life policies?
It’s fair to include the advantages and disadvantages of equity-indexed universal life insurance.
As reviewers of insurance, we want to ensure you have the information to make a sound decision when selecting life insurance and to make sure the cost of insurance doesn’t outweigh the benefits. Let’s review the pros and cons of equity-indexed universal life insurance.
| Equity IUL Pros | Equity IUL Cons |
|---|---|
| Affordable life insurance rates. | Participation has a limit. |
| Policy's cash value accumulates. | Requires large cash values. |
| You have control over the money that goes into an indexed account. | Highly based on an equity index such as DOW, NASDAQ, and S&P 500 |
| Death benefits remain intact. | |
| Your indexed account isn’t connected directly to the stock market. | |
| Easy and no limit to contributions. |
Most of the advantages come from the policy’s life insurance portion, while the disadvantage involves the equity index part. The equity index is the most unpredictable part of the stock market.
World events, innovative products, and other factors that affect the economy can change within a year or even overnight. A financial advisor can help gauge your investment to help alleviate the issues with equity IUL.
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What are the equity-indexed universal life insurance rates?
Your equity-indexed universal life insurance rates are determined by age, gender, and health. However, your age and gender are probably two of the most significant factors when determining life insurance. Let’s see how age and gender affect equity-indexed life insurance.
Indexed Universal Life Insurance Rates by Age and Gender
| Age Group | Indexed Universal Average Life Insurance Rates Per Month for Male Policyholders | Indexed Universal Average Life Insurance Rates Per Month for Female Policyholders |
|---|---|---|
| 25 - 35 | $96 - $122 | $71 - $96 |
| 35 - 45 | $122 - $171 | $96 - $148 |
| 45 - 55 | $171 - $303 | $148 - $238 |
| 55 - 65 | $303 - $491 | $238 - $445 |
The cheapest age group for equity IUL are policyholders who are 25-35 years old. Middle-aged and senior policyholders pay more for life insurance in general.
What are the top 5 equity-indexed universal life insurance companies?
Getting affordable life insurance will take some time. We’ve done some research for you and narrowed the best life insurance companies down to five companies.
| Life Insurance Companies with Equity IUL | Best For |
|---|---|
| Northwestern Mutual | Best Overall Life Insurance Provider |
| State Farm | Best Known for Relaiblie Quote System |
| Mutual of Omaha | Voted Best Company for an IUL Policy |
| Prudential | Known as the Best Company for VUL Insurance |
| AAA Life Insurance | Company with the Best Customizable Perks |
These five companies are only the tip of the iceberg. There are so many life insurance companies available in the United States. Use our FREE online quote tool to search for reliable companies in your local area.
Ready to compare quick life insurance quotes?
Your life insurance quotes are always free.
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Case Studies: Fictional Scenarios Based on Real-World Equity-Indexed Universal Life Insurance
Case Study 1: Max’s Retirement Strategy
Max is a 40-year-old professional who is looking for a retirement strategy that combines life insurance coverage and investment growth. He consults with a financial advisor who recommends an equity-indexed universal life insurance policy.
By allocating a portion of his monthly premium to the cash value account, Max can participate in stock market investments and potentially benefit from market growth. This strategy allows Max to build a cash value that can supplement his retirement savings while also providing life insurance protection for his family.
Case Study 2: Sarah’s Financial Flexibility
Sarah, a 55-year-old woman, is interested in exploring options for her retirement savings. She already has a 401(k) plan but wants more flexibility and control over her investments. After discussing her goals with a financial advisor, she learns about equity-indexed universal life insurance.
Unlike a 401(k), equity-indexed universal life insurance offers the ability to move savings to another company and cash out without tax penalties. This flexibility appeals to Sarah, as she wants to have more control over her retirement funds and be able to adapt to changing circumstances.
Case Study 3: Mark’s Expert Guidance
Mark, a 30-year-old investor, is intrigued by the potential growth opportunities offered by equity-indexed universal life insurance. However, he is hesitant to navigate the complexities of the stock market on his own.
To ensure he makes informed investment decisions, Mark decides to hire a financial advisor who specializes in life insurance and stock market investments.
With the guidance of his advisor, Mark can confidently manage his life insurance savings within the equity-indexed universal life insurance policy and navigate the unpredictable nature of the equity index.
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Equity Indexed Universal Life Insurance: The Bottom Line
If you want a life insurance policy that feels like a 401(k), you should get an equity IUL policy. Equity IULs are more expensive than whole life insurance policies and term life insurance.
But do you need an equity IUL? Before you invest in an equity-indexed universal life insurance policy, speak to a financial advisor.
Frequently Asked Questions
How does equity-indexed universal life insurance work?
Equity-indexed universal life insurance is a policy that combines life insurance coverage, cash value accumulation, and stock market investments. A portion of your monthly premium goes towards life insurance benefits, while another portion accumulates as cash value that can be invested in stock-influenced investments.
How does equity-indexed universal life insurance compare to a 401(k)?
While both equity-indexed universal life insurance and 401(k) plans involve investments in the stock market, there are differences. Equity-indexed universal life insurance includes life insurance coverage and a savings account, offering more flexibility in terms of moving savings to another company and cashing out without tax penalties.
Do I need to hire a financial advisor for equity-indexed universal life insurance?
It is recommended to hire a financial advisor when investing in the stock market, as it can be complex and subject to frequent changes. A financial advisor can provide guidance on how to utilize your life insurance savings within an equity-indexed universal insurance policy.
What are the pros and cons of equity-indexed universal life policies?
Equity-indexed universal life insurance offers advantages such as life insurance coverage and potential cash value growth. However, the equity index part tied to the stock market can be unpredictable. Consulting with a financial advisor can help mitigate the risks associated with the equity index.
What are the equity-indexed universal life insurance rates?
The rates for equity-indexed universal life insurance are determined based on factors such as age, gender, and health. Generally, younger policyholders pay lower rates, while middle-aged and senior policyholders pay more.
Your life insurance quotes are always free.
Secured with SHA-256 Encryption
Schimri Yoyo
Licensed Agent & Financial Advisor
Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states and over 20 years of experience. During his career, he has held roles at Foresters Financial, Strayer University, Minnesota Life, Securian Financial Services, Delaware Valley Advisors, Bridgemark Wealth Management, and Fidelity. Schimri is an educator eager to assist individuals and families in ...
Licensed Agent & Financial Advisor
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.
