Equity-Indexed Universal Life Insurance

AAA

DEFINITION of 'Equity-Indexed Universal Life Insurance'

A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index. Indexed universal life insurance policies typically contain a minimum guaranteed fixed interest rate component along with the indexed account option. Indexed policies give policyholders the security of fixed universal life insurance with the growth potential of a variable policy linked to indexed returns.

INVESTOPEDIA EXPLAINS 'Equity-Indexed Universal Life Insurance'

Indexed universal life insurance differs from variable universal life insurance in that indexed policies follow a stock market index, while variable policies can allow policyholders to allocate funds to a variety of investment vehicles, such as stocks, bonds and equity funds. Indexed policies tend to be less expensive than variable policies, and offer greater security against stock market declines.

VIDEO

RELATED TERMS
  1. Free Look Period

    A period where a new insurance policy owner is able to terminate ...
  2. No-Load Life Insurance

    A type of life insurance that charges much lower fees and expenses ...
  3. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
  4. Life Insurance

    A protection against the loss of income that would result if ...
  5. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
  6. Permanent Life Insurance

    An umbrella term for life insurance plans that do not expire ...
Related Articles
  1. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  2. Indexed Universal Life: Cash, Flexibility ...
    Insurance

    Indexed Universal Life: Cash, Flexibility ...

  3. 5 Insurance Policies Everyone Should ...
    Home & Auto

    5 Insurance Policies Everyone Should ...

  4. Passing The Buck: The Hidden Costs Of ...
    Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center