The equity-indexed universal life insurance is a category of coverage that became accessible 10 years ago. Typically, it is considered by most people as the finest investment before their retirement. This is being tied up with the financial indexes and fixed income instrument. It is true that most investments today are being bond and the policies of equity-indexed universal life insurance are offered with minimum guaranteed costs. Aside from that, it lessens the hazard when it comes to the market loss and it also provides an affordable return.
The presence of equity-indexed universal life insurance is really a great idea due to the benefits that it provides to individuals. But, it can also bring some problems in your life although it is quite beneficial. The following are the benefits and disadvantages that this insurance can give to anyone.
The 6 Pros of Equity-Indexed Universal Life Insurance
1. High Short-Term Earnings
This is very ideal for most homeowners because it offers high short term earnings and it can support them when they experience financial downfall.
2. Favorable Tax Treatment
It also has favorable tax treatment so you will never have issues when paying your taxes.
3. No restrictions
As comes with no restrictions, some of your private information will not be checked and you can easily apply for it with ease.
4. Potential Growth
When talking about its potential growth, the investment of the company along with a certain part of its premium in the stock index will be shared to you automatically.
5. Versatile Use of Earnings
It really has flexible earnings because when you withdraw your money, you can use it in reducing the amount of payment of your beneficiary for your death insurance.
6. Tax free Death Benefits
It usually offers the beneficiaries the overall amount of your capital that you have invested. It doesn’t extend the interest and break up your policy earnings while you are still alive.
The 3 Cons of Equity-Indexed Universal Life Insurance
1. Cheap Policy
It has a very cheap policy due to the substantial commission payment to the broker who wrote the entire policy.
2. Continuous Increase on Policy Rate
The policy rate of this life insurance is increasing continuously. That’s why the premiums that are already used in paying this life insurance will get lessened and will be placed in an investment account.
3. Very High Fee Structure
Due to its high fee structure, many people are experiencing difficulties in paying for it.
How Do You Feel About Equity-Indexed Universal Life Insurance?
Even though equity-indexed universal life insurance has downsides, still, many people are choosing to apply and use it when they are experiencing financial issues. Through this life insurance, your family will no longer have money issues when you leave them. The benefits of it can surely last for years. However, the decision will still depend on you. What can you say about it?
