In a volatile stock market environment, a hugely popular benefit of indexed universal life insurance is that the client faces no market risk during the accumulation period. For both clients and agents, however, it’s just as important to understand what happens during the distribution period, when the client can be exposed to a good deal of risk if he or she chooses a variable loan provision instead of a fixed loan provision. Variable loans often look better on paper — sometimes increasing the distribution amount by more than 30 percent — but they also expose the client to astronomical increases in interest rates. For clients who have purposefully chosen a secure, stable investment, this kind of risk just doesn’t make sense. 

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