Posted by OnAmerican Life Insurance GuidefrontColumnwe understand that,Every index policy is a "policy savings" account opened in an insurance company and attributable to an individual.It's just that the operation and management of policy accounts are different from bank checking accounts, HSAs, 401Ks and other accounts.
Readers in the community raised new questions, then we applyIndex Policy IUL At the time, how should I save money? What is the difference between saving money and depositing money in a bank account?How is the money invested?
insurGuru©️American Life Insurance AcademyBen, the columnist of, wrote this article to help answer the above three questions.
How to save money in an IUL policy
When about "What is U.S. insurance financingIn the five questions and answers, we used a vivid metaphor to compare opening a policy account with opening a bank account.
After the insured has opened a policy "savings" account in a financial insurance company, the insured will then choose,"Sub-account" for depositing money.
When opening an account, you must choose a "sub-account" to deposit money. This step is the biggest difference from opening an account in a bank.
What is the "sub-account" of the IUL index insurance policy
In the IUL policy account,There are usually multiple deposit "sub-accounts" to choose from.Each "sub-account" represents a different "deposit" cash value growth strategy provided by the insurance company.
Depositing money in the insurance policy means depositing money in different "sub-accounts" in the policy to obtain the corresponding benefits stipulated in the insurance company's contract.
What are the options for policy sub-accounts
We often hear index policy brokers often say, "S&P500 Standard & Poor's 500 Index account, follow the rise and not follow the fall". This sentence means that in this policy account, there is a "sub-account" that tracks the increase in the S&P 500 Index. The money deposited in this sub-account will receive the insurance company's agreement to "follow the rise or not fall". welfare.
Usually, issueExponential policyThe financial and insurance company of China will also provide a “fixed income sub-account” in the policy account. The money in this sub-account will receive the “fixed income interest rate” agreed by the insurance company, such as annual fixed income of 2%, 3%, 4 %Wait.
Each "sub-account" has its own name. The most mainstream, or in other words, the core "sub-accounts" in the current IUL policy accounts on the market are:
- 1-year S&P500 peer-to-peer/capped sub-account
In addition to the aforementioned "sub-accounts", insurance companies usually provide different "sub-accounts" or "sub-accounts" with exclusive registered trademarks for policyholders to choose, such as:
- 1 year Russell 2000 peer-to-peer/capped sub-account
- 1-year MSCI emerging markets peer-to-peer/capped sub-account
- 1 year Hang Seng PXNUMXP sub-account
- 1-year NASDAQ 100 point-to-point sub-account
- 1-year hybrid index point-to-point/capped sub-account
- ML Strategic Balanced Index ®️ sub-account
- ... ...
For some groups who prefer to manage the financial status of the insurance policy by themselves, how many "sub-accounts" options are provided is also a reference indicator for evaluating an index-type insurance policy product.
(Recommended reading:How to choose the IUL policy product and company that suits you?）
How to deposit money to a sub-account
As the policy account usually has multiple "sub-accounts", the policyholder can choose when applying for insurance, putting 100% of the proportion in one sub-account, or assigning different proportions to different sub-accounts independently.
After selecting the "sub-account" and the corresponding ratio strategy, the deposited premium will be automatically allocated to the corresponding account according to the setting after deducting the corresponding cost, and the accumulation of cash value will begin.
The method of depositing premiums can be regular mailing checks to the insurance company, or you can set up automatic bank transfers, according to personal and family financial status, monthly, quarterly, semi-annual, and annual frequency deposits.The annual payment method enjoys a certain discount than the monthly payment method.
Article summary
This article provides a simple question and answer to the reader's concern about how to save money in an insurance policy. In actual work, different policy "sub-accounts" have different functions and parameters, which are usually dynamically floating.The same amount of money also corresponds to different policy designs and different deposit methods.We will also evaluate and answer in the next column.If you have any questions in the process of preparing to apply for the policy, please contactAmerican Life Insurance GuideProfessional brokers in the community provide assistance.
