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December 24, 2012 at 09:45 PM
There’s a certain long-standing burger chain that encourages customers to have it their way. When it comes to life insurance, clients have a lot more options than typically found on most fast food menus, but still they want it their way — and nowadays, many are seeking policies that offer security and flexibility as well as the opportunity to accumulate cash value.
Security is of the utmost importance because the economic events of the past couple of years have demonstrated the value of the safety net that guarantees provide. Clients buy life insurance to protect their estates, meet long-term needs and share their legacies with their heirs. Their coverage can’t be up in the air; it has to be available. They are not inclined to take undue risks with it. And with the continued uncertainty over the economy, that could be the case more than ever.
Flexibility is a must because clients’ lives are fluid; their needs can change. They might need to adjust premiums, take a distribution to provide for unexpected medical expenses, help pay for their children’s college education, etc. They often want their life insurance policy to have the flexibility to meet these needs. And with the significant declines in so many Americans’ nest eggs recently, the savings that may have been available in the past to cover such needs are not always there anymore.
One solution that can offer clients security, flexibility and the opportunity for cash accumulation is indexed guaranteed universal life. The most flexible structure for this type of product provides policy owners with long-term guarantees as well as the ability to allocate premium to index accounts, resulting in the potential to accumulate significant cash value.
See also: Life insurance: An overlooked asset class
The policy features that provide the potential for cash value accumulation inherently imbue strong death benefit protection, along with options to customize coverage guarantees to fit individual needs. In short, they make indexed GUL one of the most flexible products on the market.
Of course, non-indexed fixed GUL products have been available for years and are designed to feature lower premiums. Therefore, they offer policy holders little or no cash value growth potential and only limited flexibility within the contract. Indexed GUL products, then, can be a much better choice to present to many clients.
Indeed, indexed GUL is attractive because clients often desire higher returns but are concerned about the volatility of today’s equity markets. Indexed GUL products feature the opportunity to take advantage of some of the equity markets’ upside potential while offering a minimum guarantee to help decrease negative exposure to volatility.
Indexed GUL products can be especially appropriate for clients who wish to acquire permanent, guaranteed protection at an affordable price, with the opportunity to grow tax advantaged, supplemental income for their retirement.
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