Posted by IUL Index Universal InsuranceIt is definitely a good product.But in the United States, it may still become a big pit. The uneven quality of companies and employees is one aspect. There are not many public information available for users to learn and refer to. The lack of professional experience and guidance is another aspect.Therefore, how to meet your needs, make good use of IUL, and achieve the goal of ensuring high income and almost risk-free wealth growth under low liquidity is a daunting task.
From another perspective,Universal insuranceThe products are all "very flexible".This means that customers have a variety of options and configuration methods.There is no uniform standard for the design of the insurance policy.This is completely different from buying things online.You have to understand the basic principles, covenants and options of exponential universal insurance. At the same time, you must be very clear about your own needs. At this time, when you communicate with professional brokers, you can achieve the ultimate effect of this product.
This process sounds very complicated, is there any simpler experience?Forbes magazine published an interview. The author consulted Tom Murphy, chairman of the Murphy Financial Group in New York, who specializes in IUL index universal insurance, and taught readers his rules of thumb for purchasing index universal insurance.
The following are the 4 golden rules for investing in index universal insurance policies.
#1: Choose a broker, not an insurance company
When it comes to choosing who to trust, superstition on the Internet can get you into trouble.Everyone on the Internet says their own words, and anyone can post almost any position or article.Endless companies even try to persuade you to make hasty decisions under the banner of helping you, buying the cheapest and saving money.Rather than telling you the basic knowledge and principles of this product in detail.Although it is called universal insurance, it is not for everyone.
"For consumers, the positive side is that they have a lot of choices when buying IUL products; the bad side is that they will have too many choices next." Murphy Finance The chairman of the group said so.
The author of the article completely agrees with this view.This is why we put forward this point: It is better to find your own broker than to buy all insurance company products by yourself.Find a broker specializing in IUL products, not a hodgepodge broker who specializes in term life insurance or participating universal insurance, clarify your needs with the broker, or discuss the actual situation together, and finally let your broker choose the design The insurance policy that suits you.
Please bear in mind that a professional and excellent independent broker is directly related to the quality of your insurance policy.
#2: Choose comprehensive pre-mortem benefits
Pre-mortem benefits are a major revolution in life insurance for so many years.In terms of implementation, pre-mortem benefits are added to your insurance policy as additional clauses (attachments), so that you can enjoy benefits while you are alive.These enhanced benefits allow you to withdraw all or part of your life insurance coverage (death benefit) while you are alive.
The following are the common pre-live benefit additional clauses in IUL insurance policies:
• Terminal Illness: When it is diagnosed as having a life span of only 12-24 months, different insurance companies have different requirements for the end of the payment period. Generally speaking, the longer it is, the more friendly it is to the insured.
• Chronic Illness: The policyholder cannot complete some basic daily activities.
• Critical Illness: The insured person is paid when he suffers from many diseases, including: cancer, heart disease, kidney failure or stroke.Generally speaking, the more serious the illness, the higher the amount of compensation.
• Critical Injury: The insured person will be paid if he suffers burns, traumatic brain injury, paralysis or coma.note:Most companies do not provide major injury benefits.Therefore, please ask your broker.
Tom Murphy believes, "Pre-mortem benefits complete your safety protection portfolio, and provide an alternative to other special diseases, injury insurance, and long-term care insurance, especially long-term care insurance, which is especially important for families with tight budgets."
#3: Check the guaranteed income and the capped income
Sometimes investing is like a roller coaster.While seeking to maximize returns, they also face the risk of maximization.If the unfavorable loss situation can be controlled, it will be better.
"The IUL index universal insurance policy is a solution for these anxious investors sitting on a roller coaster-it guarantees a minimum rate of return of 0%-3%," Murphy said.This means that no matter where the market goes down, the money in your policy will be covered by the policy contract.
That is to say, when the stock market rises sharply, investing in IUL insurance policies may not earn as much as when investing in stocks, but when the market falls sharply, your funds can be protected.
Murphy said: "When the index goes up, the insurance company cashes in the option and then pays dividends to your policy at the agreed maximum rate of return."
This means that your policy has aCapped rate of returnceiling.Different company products,Capped rate of returnIt varies from 8% to 18%.An 18% IUL policy capped yield means that if the market return is 20%, your policy can only get a yield of 18% instead of 20%.If the market reports negative interest rates, then the policy contract will protect your money from loss.
This is the third recommendation. Before purchasing an IUL policy, make sureGuaranteed rate of return和Capped rate of returnWhat is each.Because in the long run, a small difference in a number means a huge difference in cash.
#4: The cost of insurance and the cost of underwriting
Although IUL is a better channel for diversification of investment, it is not suitable for everyone.
For example, it is much more expensive for a 60-year-old to take out insurance than a 30-year-old.Insurance costs will quickly consume most of the principal and investment income of the insurance policy under better market conditions, resulting in only a small part of the remaining remaining cash value growth.
Underwriting is another issue.If you are facing a health problem, you may get a "below standard" rating.If you are young and healthy, and there is still a certain amount of asset accumulation at this time, then the IUL insurance policy may be a very good investment portfolio.
Summary
Before deciding to purchase an IUL insurance policy, there are too many important factors to consider.The above 4 items are the experience of purchasing IUL products.Remember, seek advice from an experienced and independent source of information, they can help consider all options and situations.At the same time, you must fully study and understand the knowledge that you will invest in such products for 10, 20, or even lifetimes before you can make good use of IUL and achieve the goal of ensuring high returns and almost risk-free wealth growth under low liquidity.
(Author introduction: Drew Gurley, Co-founder of PolicyZip Excerpted from:Forbes）
