Indexed Universal Life
Protection for today – Flexibility for your future
Planning for the future isn’t easy. With so many important goals to consider, it can be hard to find the right balance between budgeting for current needs and planning for future expenses.
Indexed Universal Life is a Flexible Planning Tool
Indexed Universal Life (IUL) Insurance is a valuable tool that can help you work toward several goals at the same time. First, the policy’s death benefit provides a source of income for your beneficiaries, and helps ensure that your dreams for them still happen – even if you are not there to personally provide for them.
Additionally, the policy has the ability to grow cash value over time. Any premium paid above the policy’s fees, charges and expenses (known as the “net premium”) builds up as cash value within the policy and can grow through credited interest. What makes IULs special, however, is the unique balance they provide between growth potential for cash values and protection against loss.
How Indexed Universal Life Works
Policyholders have control, within guidelines, over how the cash values in the policy are allocated between different interest-accruing accounts. There is generally one fixed account, giving a stated rate of interest declared by the life insurance company, and multiple indexed account options.
In an indexed account option, rather than receiving an interest rate chosen by the life insurance company (the fixed account option), cash values may be eligible to receive what is known as “indexed interest crediting.” Simply put, the interest rate that cash values receive is based in part upon how a market index performs over a given period of time. The life insurance company uses the index as a benchmark to help determine what indexed interest crediting the policyholder may be entitled to. This rate may be higher or lower than the interest rate the life insurance carrier credits on the non-indexed accounts (e.g. the fixed account), and is subject to limits.
At the same time, the cash value is not being directly invested in the market. Each indexed account option has a minimum guaranteed interest rate1, protecting it against loss in the event that index goes down during the period of calculation. If the option has a guaranteed minimum interest rate higher than 0%, the indexed account may even be eligible for interest during periods where the market index has gone down.
How Can Indexed Universal Life Help You Meet Your Financial Goals?
Cash value in a life insurance policy can add flexibility to your planning. Policy values can later be withdrawn, taken out as loans, used as collateral, or can help cover the costs of maintaining the insurance coverage.
Some have found cash value life insurance to be a helpful way to:
- Generate tax-free retirement income streams
- Help cover the cost of education for children and grandchildren
- Set aside financial resources for the unexpected
- Plan for the rising costs of healthcare, long term care, assisted living and other similar expenses.
Indexed Universal Life provides death benefit protection today, and flexibility to help cover your needs in the future. When allocated to an indexed account option, cash values get the dual-benefit of increased upside potential through index-based growth and downside protection against market-based loss.
Indexed Explorer Plus® Simply Performs
Columbus Life’s Indexed Explorer Plus® Universal Life offers policyholders a simple, effective approach to enhancing the benefits in Indexed Universal Life.
An index you know- Though many different indexes exist, we chose the S&P 500®2 because it tracks the 500 top publicly traded companies in America, and is an index that our policyholders know and recognize.
Flexible, short evaluation "segments"- When you’ve allocated a portion of your cash values into a specific indexed account option, the money is required to stay in that allocation for only one year. Some indexing options on the market require that the allocations be locked in for longer segments of time. Short, one-year segments give you the flexibility to evaluate how your allocation strategy has performed and adjust your allocations if necessary. It also means any gains are locked in more frequently, and credited interest has more opportunities to experience compound growth over the life of your policy.
Benefits during your lifetime- Our Life Plus Accelerated Death Benefit Rider®3 is automatically included with Indexed Explorer Plus at no additional premium4, and gives you the flexibility to access a portion of your life insurance policy’s death benefit if a qualifying medical event occurs. Additional information about our Life Plus rider is available in the living benefits section of our website.
Indexed Universal Life 101
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1 Minimum interest rate guarantees can vary by account option and by state. Please review the Indexed Explorer Plus® Client Guide for additional details on Columbus Life’s minimum interest rate guarantees.
2 "Standard & Poor’s®", "S&P®", "S&P 500®", "Standard & Poor’s 500", and "500" are trademarks of Standard & Poor’s Financial Services LLC and have been licensed for use by Columbus Life Insurance Company. The Indexed Explorer Plus® UL is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s does not make any representation regarding the advisability of purchasing the Indexed Explorer Plus UL.
3 Specific rider terms, conditions, and availability varies by state. Rider is subject to qualification.
4 Additional charges may apply.
Policy Benefits are not mutually exclusive. Loans will accrue interest. Loans and withdrawals will reduce the Death Benefit and Cash Surrender Value and may cause the policy to lapse. Loans and withdrawals may be subject to other fees and charges.
Life insurance products are not bank products, are not a deposit, are not insured by the FDIC, nor any other federal entity, have no bank guarantee, and may lose value.
Payment of the benefits of Columbus Life Insurance Company life insurance products is backed by the full financial strength of Columbus Life Insurance Company, Cincinnati, Ohio. Guarantees are based on the claims-paying ability of the insurer.
The information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Columbus Life does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Columbus Life makes no warranties with regard to the information or results obtained by its use. Columbus Life disclaims any liability arising out of any person’s use of, or reliance on, the information.
Columbus Life Insurance Company is licensed in the District of Columbia and all states except New York. Indexed Explorer Plus Flexible Premium Universal Life Policy (Indexed Explorer Plus Flexible Premium Adjustable Life Policy in PA and VA; Equity Indexed Explorer Plus Flexible Premium Universal Life Policy in NJ) and some riders may not be available in all states. Policy series CL 88 0707, CL 88 1503, and riders CLR-137 0101, CLR-137 1208, CLR-137 1308, CLR-143 0101, CLR-143 1208, CLR-143 1308,CLR-176 0707, CLR-178 0707, CLR-179 0707, CLR-179 1208, CLR-179 1308 and CLR-202 1409.