Equity Indexed Universal Life (EIUL) Insurance
Equity indexed universal life insurance is a permanent life insurance policy with investment opportunities. With help from a financial advisor, you can turn part of cash value into a sizable investment that can rival the growth of 401k. The average equity IUL costs $96 to $445 per month. Compare multiple companies and shop around to see if you can find a more affordable rate.
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Written by
Rachael Brennan
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Reviewed by
Benji Carr
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UPDATED: Dec 16, 2020
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- 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 equity indexed universal guide and how much it costs per month.
Enter your ZIP code in the FREE online quote tool to compare life insurance policies like equity indexed universal life insurance in your local area.
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.
Equity Indexed Universal Life Insurance vs. 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, a financial advisor can help you understand how to use your life insurance savings in an equity indexed universal insurance.
Equity Indexed Universal Life Pros and Cons
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. 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.
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 IUL.
| 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 |
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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.
The Top Five 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.
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.
If you’ve done your research and are ready to search for equity indexed universal life insurance policy, enter your ZIP code in the FREE comparison tool below.
