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Indexed Universal Life Insurance

Indexed Universal Life insurance policies (“IULs”) are a fixed permanent life insurance product. Its gains are tied to interest credits based on the performance of a financial index. However, it is often subject to a cap that is determined by the insurance company that issues the policy. There is also a floor that is claimed by the insurance industry to protect from downside risk. IULs also can offer individuals tax-deferment or tax-free loan benefits.  Major sellers of these policies include Minnesota Life, Penn Mutual, Midland National Life, National Life, AXA Equitable Life, Lincoln Financial, Pacific Life, Transamerica Life, and John Hancock Life.  IUL policies are accompanied by complexities such as index linking, riders, and specific tax strategies. Because of this they are often viewed as products geared towards sophisticated buyers with a high net worth.  Increasingly, however, IUL policies are being sold to more modest individuals that may not understand or appreciate the risks. This trend has some people worried about Indexed Universal life insurance.

The Risks of Indexed Universal Life Insurance

There may be downsides to IULs as well—especially for more buyers of more modest means. Before purchasing a Minnesota Life, Penn Mutual, Midland National Life, National Life, AXA Equitable Life, Lincoln Financial, Pacific Life, Transamerica Life, or a John Hancock Life IUL product, you should be fully aware of the risks as well as the benefits.  If you have purchased an indexed universal life policy in California and would like a free legal evaluation of it, please contact The Evans Law Firm, Inc. 415-441-8669 or by email

Given how the cash value of IULs grows through interest credits derived from a financial index, it may be an inappropriate vehicle for those who have a shorter timeline or insufficient discretionary income. And while IULs may offer tax benefits, the advantages of IULs may be difficult to comprehend or fully explain, and careful structuring may be necessary in order to realize them.  Similarly, IULs may not line up with a buyer’s goals or benefit preferences, and policy illustrations may not accurately reflect the realities.  Sometimes the policy illustrations are missing or deceptive to the buyer.  With respect to associated fees and costs, IUL policies often have long surrender periods, in which policy owners can incur surrender charges for ten or fifteen years, or even longer.  In addition, because IUL policies are life insurance products, mortality charges may reduce their value.

Our Investigation into Indexed Universal Life Insurance

Evans Law Firm has been investigating indexed universal life insurance for a long time, and we have turned up a great deal of information for consumers. If you have purchased an indexed universal life insurance policy, we recommend that you take a look at some on the posts we’ve written about them and the negative effects they can have on consumers’ finances and retirement options.

The Evans Law Firm, Inc. handles insurance and consumer fraud cases and class actions, as well as whistleblower and false claims, elder abuse, and personal injury cases. If you purchased a Minnesota Life Insurance Company, Penn Mutual, Midland National Life Insurance Company, National Life, AXA Equitable Life Insurance Company, Lincoln Financial, Pacific Life, Transamerica Life, or a John Hancock Life Indexed Universal Life Insurance Policy product and would like a free and confidential legal evaluation of it, please contact the Evans Law Firm, Inc. at (415) 441-8669 or info@evanslaw.com for a free and confidential consultation.

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