Getting life insurance is one of the most important purchases that you’ll ever make for your loved ones. If you were to pass away, your family members would be responsible for all of your debts and unpaid expenses. This can make an already difficult situation a thousand times worse. The death benefit of life insurance can help your family get through the difficult time without being stuck with the massive debts and final expenses.
In addition to the death benefit, a great reason to own Indexed universal life insurance is for the potential tax-free income that can be generated during retirement. Which companies offer the best indexed universal life insurance policies? This is a very important question since these purchases are very long term and need to perform well in order to reap the most benefit.
We offer indexed universal life from many of the top carriers and if you would like to receive a personalized quote you should click on the quote box to the left of this page.
There are around 40 different carriers in the indexed universal life market place today. Each of those carriers may have several different policies that they offer. We feel like we can recommend 7 of these carriers.
How Do You Know Which Companies Offer The Best Indexed Universal Life?
Lets look at the 7 areas that I see are most important in choosing an indexed universal life policy.
- Ratings – Each year insurance companies are rated by 4 major rating agencies for their financial strength and ability to pay claims. AM Best and Comdex ranking is what we pay most attention to. The higher the AM Best and Comdex the better. AM Best top is A++ and Comdex best is 100.
|Company||Comdex Ranking||AM Best|
|North American / Midland National||90||A+|
|American National Life||78||A|
- Index Caps – Index caps are important to the performance opportunity in the policy. The higher the cap the more interest can earn. The most used and simplest to understand S&P 500 index allocation. The range of these caps are as low as 7% and as high as 16% with the average being around 12%. These caps can change so it is important to use a carrier that has historically held caps steady. All of the carriers listed above have caps above 12% which makes them ok with us.
- Money Sweep Policy – It is very important to have your premium dollars go to work for you as soon as possible. The sweep options are daily, monthly, quarterly and yearly. We prefer daily sweeps so that no matter when you send your premium your money goes to the indexing account The only carriers that do this is North American and Midland (Sister Companies both owned by Sammons)
- Low Policy Expenses – Over the course of 20 – 40 years, policy expenses can really add up. A recent comparison by Brett Anderson of IULDIGEST.COM of policy expensive for a 50 year old male preferred non-smoker showed a range of $31,000 to $81,000 over a 20 year period. That is a $50,000 difference from the cheapest to the most expensive. The companies we have listed are in the low expense category.
- Accelerated Benefits – These are chronic, critical and terminal illness benefits and allow the owner of the policy to accelerate a portion of the death benefit should they experience any of the above. Again, these carriers all have strong accelerated benefits.
- Loan options – This is a very important feature to look for in an Indexed Universal Life policy if you intend on using your policy as an income supplement. Policies basically have 2 types of loans, fixed and variable. When you borrow money against your policy, variable rate loans allow your funds to stay allocated to the index options of your choosing thereby continuing to earn interest credits. With fixed rate loans, the portion of your money that you are borrowing against is moved to the fixed interest allocation within your policy. Being able to switch between these two loan types is important because things change over 20 to 40 year periods and you need the flexibility. You will also want to make sure that your variable loan rate is capped. We see most of these loan rates capped at 5% to 6%. This means that the interest rate that your loan is charged will never be above the cap. Historically the rates charged have been close to 8% so being capped at 6% is important.
- Interest Bonus – Some policies offer an interest rate bonus after a certain number of years. Some carriers guarantee an additional bonus interest rate on top of what your policy earns each year. Most start in year 11 and can be as much as 0.75%. Make sure that this bonus is paid on all values in the policy. Most companies do not pay this bonus on funds that have been borrowed against. The only carriers that pay the bonus even on the funds borrowed against are North American and Midland National.
- 8 Overloan Protection – The last thing you want to happen to your policy is to lapse while you have a loan against it. At that point the loans would be taxable to you. Make sure that you choose a carrier that offers an overloan protection rider. All of the carriers listed have one so rest assured that your policy will not lapse due to borrowing too much money.
When you’re looking to get the best indexed universal life insurance policies, you’ll need to calculate all of these different factors. They are all going to play a huge role in which IUL is going to work best for you and which company you should purchase your plan through. It’s extremely important that you make the best decision when purchasing life insurance for your family’s protection.
I know this sounds like a lot to think about when selecting and indexed universal life insurance policy, but all are important. There are certainly more areas of importance but these are the biggest to look for. There are a lot of great policies available and we have helped thousands of clients choose the right policy. Let us help you understand all the ins and outs of insurance, don’t just listen to the advice of a big name such as Dave Ramsey or Suze Orman on life insurance advice. We can prepare a personalized indexed universal life proposal for you to review. We just need a few pieces of information from you. You can give us a call at 1-800-712-8519 or use the quote request form to the left of this page.
If you decide that indexed universal life insurance plans don’t work for you and your family, there are dozens of other life insurance policies that you can choose from. If you’re looking to get the most affordable life insurance coverage for your family, the best option is going to be a term life policy.
Term life insurance policies are bought with a pre-determined length of effectiveness. After that point, the plans are no longer effective and you’ll have to reapply for coverage. Insurance companies sell these plans in a variety of lengths, everything from two years to thirty years. You can purchase a plan that is going to fit the needs of your family.
Because these plans come with an expiration date, they are going to be the cheapest option for life insurance coverage. If you want to find a plan that is going to save you money on your life insurance option, term life insurance is going to be your best option.
Because there are so many different kinds of life insurance policies, it’s important that you pick the plan that’s going to work best for you and your loved ones. We know that finding the best plan can be a long and difficult process, but we are here to help. Our independent agents can walk you through the process and decide which one fits your needs the best.
Aside from helping your pick the perfect plan, our independent insurance agents can also help compare the rates from dozens of insurance companies at once. Unlike a traditional insurance agent, our independent agents represent dozens of highly rated companies across the nation. We can bring you all of the lowest rates directly to you. No hassle. No calling companies and answer the same questions. We can help save you both time and money on your life insurance plan.
Regardless of which type of plan that you pick, either an indexed universal or a term plan, you should always use an independent agent. Our agents have years of experience working with clients and connecting them with the best plan to meet your needs.
If you have any questions about indexed universal life insurance policies or about some of the other options for you, please contact one of our agents today. We would be happy to answer those questions Because you never know what’s going to happen tomorrow, you shouldn’t wait any longer to get the insurance protection that your family needs.