Posted by A family with a certain amount of insurance policy in the Chinese communityAmerican Life Insurance and Annuity Company, Announced today that it will be downgradedIndex Universal Insurance(IUL) Product, tracking the cap interest rate (Cap) of the strategy account of the S&P500 index by 0.5%.
What does this insurance company mean by lowering the value of Cap?What impact does it have on us?
At the same time, most of theIndex Universal Insurance(IUL) Products, almost all provide strategic accounts for tracking the S&P500 index.At insurGuru©️Insurance Academy「How IUL works"It was introduced in the article that when the S&P500 index rises, the cash value in the policy account corresponding to the policy will also increase.So, is this "growth" capped?What are the Cap interest rates of different insurance companies?
To answer these questions above,insurGuru©️Insurance AcademyThe content shared by the column.
Basics: What is the S&P500 Index?
The S&P500 index is called the "Standard & Poor's 500 Index."To understand it in the simplest sentence: 500 large companies in the United States.Such as Coca-Cola, Intel, Starbucks, etc.
The S&P500 index is a barometer of the U.S. economy and represents the "national fortune" of the United States.We often hear or see "How many points the S&P 500 has risen" in the financial news, and that's what we are talking about.
What does the S&P500 index have to do with me?
Most on the marketIndex Universal Insurance(IUL) The product uses a strategy account that tracks the S&P500 index by default.Search "U.S. Life Insurance Guide Network" https://www.uslifeinsuranceguru.com
If usingIUL policyCarrying out all-round protection for the person or family means that at a lower cost, we rely on the leverage provided by the US economic growth expectations to obtain far more thanOther countries and regionsThe amount of protection and benefits that the same premium can provide.
If usingIUL policyMake a supplementRetirement income planning, That means that the retirement income of policyholders and the "national fortune" of the United States are also tightly tied together-if the US economy is in recession, thenIUL policyRetirement income that can be provided is reduced; if the US economy is strong, thenIUL policyCan provide more retirement income.
Is there an upper limit for the cash value growth of an exponential universal insurance policy using S&P500?
Have.If the U.S. economy was booming and the stock market rose, different insurance companies would give a different ceiling growth value, called Postcode, Such as 10%, 9%.This upper limit only represents the largest increase in the corresponding product可能性, Does not mean that it will grow like this, nor is it equivalent to the actual capacity of the policy cash value account accumulation.
What is the effect of Cap on my wallet?
As mentioned earlier, policyholders who use the S&P500 index strategy account choose to "share the fate" with the overall economy of the United States; the Cap value represents the proportion of the share of the pie.
American Life Insurance GuideTo give an example: if the current Cap of your IUL policy was 10% that year, then if the U.S. economy soared and the S&P500 index soared 30% that year, then you could get a capped 10% return; if the U.S. economy remained at that year 7% growth rate, then you can get 7% income.
With the adjustment of Cap, American Life Insurance Guide has compiled most of the mainstream American life insurance companies’The latest cap rate for index universal insurance (IUL) products.
The following content is Not For Public Use, For Financial Professionals Only.
This table only reflects the Cap value of an index strategy with the characteristics of S&P2019 announced by some insurance companies on May 5, 22.The Cap is not a guarantee, and the insurance company will also make adjustments. Please inform professional brokers for the latest Cap and policy interest rates.
Article summary
From this article by insurGuru©️ Insurance College and the chart shared internally, we know that Cap can be compared to the ratio of ability to get a slice of the "American National Games", which will be clearly written in the insurance policy design plan.
If all insurance companies only provide a unified S&P500 index strategy, then we can think that the higher the Cap value, the better.
But in the real market, some insurance companies’Index Universal InsuranceThe product will derive more Cap values and corresponding interest rate schemes for policyholders to choose according to this simplest way.These programsPossibleIt is more conducive to the display of the design plan, which will make the figures look good.But in actual implementation, these derivative solutions based on S&P500 may beMore favorable or unfavorable.
But judging from professional experience, we believe that life insurance is first of all for the purpose of "protection". If oneIndex universal insurance productsIn the name of providing "more subdivision options", in essence, it has entered the "high-yield possibility/high risk; medium-yield possibility/medium risk; low-yield possibility/low risk" such a "gambling" setting, then the United States Life Insurance Guide.com recommends that policyholders carefully consider whether to participate, and carefully evaluate what tangible benefits the product can really bring.
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