Indexed Universal Life Insurance
Preparing for the well-being of your family and loved ones when you’re no more, gives peace of mind. It creates a knowing that your family won’t be stranded. The importance of an Indexed Universal Life Insurance policy cannot be overemphasized.
What Is An Indexed Universal Life Insurance?
An Indexed Universal Life policy is a kind of Life Insurance with a death benefit and a Cash Value (also known as a savings account). Asides from the death benefit it offers, it gives room for individuals to grow their money and defer their taxes. This policy is easily accessible because there are no qualified education costs and its requirements for eligibility are simple.
While the Indexed Universal Life policy can be passed down effectively from generations, it also allows eligible parties to retrieve their cash without paying taxes. It is also essential to state that there are no limits to how much income one can accumulate.
What are the benefits of Universal Life Insurance?
- Your Cash Value Earns Interest
As you pay your monthly premiums, some parts go to your death insurance, while others are for building your cash value. This cash value is what earns you interest over time.
- You Can Withdraw Or Borrow Money From Your Cash Value
While you can let your cash value appreciate, you can also borrow or withdraw from it. The allowed amount and conditions will depend on your chosen insurer.
- You Can Adjust Your Premiums
Universal life insurance is quite flexible, within reasonable terms. Depending on your chosen insurer’s policies, you can adjust your premium payments for a while. This means that as you pay your premiums, your cash value can help to cover your death policy payments.
- Protection On Your Social Security
It is important to note that Social Security benefits are vital to your financial life when you retire. By law, you can start enjoying your Social Security benefits from age 62. You can as well delay it till age 70. However, it is not healthy to begin enjoying your Social Security benefits before you retire. The reason is that enjoying your benefits before retirement reduces your benefit amount. This is why the IUL has a Cash Value accumulation system to help preserve your Social Security.
What Can Cause a Claim Denial In An Indexed Universal Life Insurance?
A claim denial in an Indexed Universal Life Insurance can occur due to certain factors that define its credibility. While it may vary with different insurance company policies, some are quite similar. They include;
- Provision Of Misleading Information
Providing wrong or misleading Information such as health status, age, major or minor ailments, income status, etc., can be disadvantageous. Hence, it is vital to provide the correct details.
- Improper Documentation
An improper submission of documents can also lead to claim denial. Before claims can be issued, the deceased’s family must provide proper documentation. At the very least, a death certificate is mandatory.
- Questionable Death Circumstances
Unusual circumstances surrounding death, such as suicide, can imply a claim denial. A death that occurs within the first three years of enrolling in the scheme is also one of these circumstances because it is within the contestability period.
Conclusion
An Indexed Universal Life Insurance is an essential program for everyone, as it protects the insured and their family. Besides transferring wealth, it ensures the insured receives enough financial benefits to sustain them and their loved ones over a stretched period.