Loading the player...

What is '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.

BREAKING DOWN '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.

RELATED TERMS
  1. Accumulation Option

    A policy feature of permanent life insurance that allows policyholders ...
  2. Convertible Insurance

    A type of life insurance that allows the policyholder to change ...
  3. Variable Survivorship Life Insurance

    A type of variable life insurance policy that covers two individuals ...
  4. Unbundled Life Insurance Policy

    A type of financial protection plan that provides cash to beneficiaries ...
  5. Term Life Insurance

    A policy with a set duration limit on the coverage period instead ...
  6. Rider

    A provision of an insurance policy that is purchased separately ...
Related Articles
  1. Retirement

    Understanding Different Types of Life Insurance

    Understand the various types of life insurance, how each can be used in personal or business financial planning, and for whom they are best-suited.
  2. Financial Advisor

    Which Life Insurance is Right For You?

    Consumers have choices when it comes to life insurance. Knowing your future needs for cash or retirement can make the difference in what you select.
  3. Retirement

    Beware the Sneaky Math of Universal Life Insurance

    Universal life insurance's cash value can be a cash cow – if there's any left. Read on to see if it'll work as an income source after you've retired.
  4. Insurance

    Indexed Universal Life: Cash, Flexibility And Safety

    IULs boast the security of fixed universal life policies and the interest-earning potential of variable policies.
  5. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  6. Insurance

    Dividend-Paying Whole Life Insurance: What to Know

    Many whole life insurance policies pay dividends. Here are what policyholders need to consider.
  7. Insurance

    How Index Universal Life Insurance Works

    Understanding how Equity Index Universal Life Insurance policies work and if you should buy a policy.
  8. Financial Advisor

    Buying a Life Insurance Policy? Read This First

    Knowing who needs life insurance, how it works and the different types of insurance can help consumers make informed decisions about this product.
  9. Insurance

    How Good An Investment Is Life Insurance?

    Compared to other options, does it ever make sense to include cash-value life insurance in your investment portfolio? A look at the pros and cons.
  10. Retirement

    Universal Life Insurance: Dangers for Retirees

    This type of permanent life insurance is often touted as a source of income, but using it that way is full of traps. So, think before you buy.
Hot Definitions
  1. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
  2. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
  5. Pari-passu

    A Latin phrase meaning "equal footing" that describes situations where two or more assets, securities, creditors or obligations ...
  6. Interest Rate Swap

    An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for ...
Trading Center