Indexed Universal Life in Durham: questions to ask before applying

Indexed Universal Life (IUL) is permanent life insurance with a death benefit and cash-value component. Its interest-crediting method may reference an external index, but an IUL policy is not a direct investment in an index. Policy values depend on its design, charges, funding, crediting terms, loans, withdrawals, and ongoing management.

For Durham residents considering IUL, begin with the protection need and the ability to fund and review the policy over time. An illustration is not a promise of future values or policy performance.

Establish the protection purpose first

Clarify whether the need is temporary income protection, a long-term death benefit, legacy planning, business planning, or another purpose. If the need ends at a known date, compare whether Term Life Insurance better matches the duration and budget.

Read guaranteed and non-guaranteed values together

Ask to see both sides of the illustration. Review cost of insurance, policy charges, rider charges, assumed crediting, caps, participation rates, spreads, and the funding pattern. Ask what the illustration shows if premiums are reduced, paid late, or stopped, or if credited interest is lower than illustrated.

Understand loans, withdrawals, and lapse risk

Loans and withdrawals can reduce cash value and the death benefit. If a policy lapses or is surrendered with a loan outstanding, taxable income may result. Request an in-force illustration before making a material change to an existing policy.

Durham IUL questions and answers

Read the IUL buyer guide | Durham IUL illustration and funding comparison | Request a Durham IUL consultation