Fixed index universal life (FIUL) insurance is a type of permanent insurance that offers a death benefit for as long as your policy remains in force – typically that’s the rest of your life, assuming you pay the proper premium payments. (Term insurance provides a death benefit only for a specified period of time.) And that’s just the beginning:
[Narrator] Question, what is fixed index universal life insurance? Allianz Answers.
No matter how well you plan for the future, you can't anticipate everything. And many of the events in life, both expected and unexpected, can affect the financial well-being of you and your loved ones.
That's why many people buy life insurance.
It provides a death benefit that's income-tax-free to your beneficiaries and can help ensure your family will be able to maintain their standard of living, help them keep their home or supplement lost income.
[On-screen disclosure] Death benefit is generally income-tax-free to beneficiaries [End of on-screen disclosure]
But there are other financial concerns you'll have as you go through life. Things like potential tax increases, unexpected financial emergencies and the impact of market volatility on your retirement assets. The good news is, some types of life insurance can help with these, too.
One type is called fixed index universal life insurance, or simply FIUL. FIUL policies start with a death benefit that's generally income-tax-free to your beneficiaries but add in other potential benefits that can help you throughout life.
First among these benefits is accumulation potential for your premium payments after any fees and charges to build value in your policy over time.
This can happen in two ways.
[On-screen disclosure] Because no single index allocation performs best in all situations, your financial professional can help you determine which combination may fit your financial goals. [End of on-screen disclosure]
You can choose to receive indexed interest. Here, your policy tracks the annual return of an external market index. But you're not actually participating in the market.
[On-screen disclosure] Potential interest credited may be subject to a cap or participation rate. This hypothetical example is provided for illustration purposes only. [End of on-screen disclosure]
If the index has a positive result, you're annually credited with interest according to the terms of your policy.
And that interest is locked in and can't be lost.
If the index does show a negative result, you'll receive zero interest for that year. But no interest will be lost due to the drop in the market, although fees and expenses will still be deducted from its value.
[On-screen disclosure] Fees and charges will reduce policy values including the death benefit. Potential interest credited may be subject to a cap or participation rate. This hypothetical example is provided for illustration purposes only. [End of on-screen disclosure]
And then, the next time the market shows a positive annual increase, you'll get an interest credit and so on.
That's how indexed interest can build accumulation value in your policy. That's indexed interest, or you can choose to receive fixed interest, one set, predictable interest rate month after month no matter what happens in the market during that year.
And whether you've chosen fixed interest or indexed interest, any accumulation value you build is tax-deferred. That leaves more in your policy to take advantage of any future accumulation potential.
Down the road, you're able to access any available cash value accumulation through policy loans or withdrawals, income-tax-free, for any purpose you want, whether it's helping to fund college, supplementing retirement income, or helping pay for medical emergencies or other expenses.
[On-screen disclosure] Policy loans and withdrawals will reduce the available cash value and death benefit and may cause unintended consequences, including lapse or taxable events. Please see full loan and withdrawal disclosure within this material for details. [End of on-screen disclosure]
Because loans and withdrawals will reduce your policy's cash value, you'll want to carefully monitor your policy's values and make sure your policy is properly funded so it doesn't lapse.
You should also consider the tax implications and discuss them with your tax professional.
Finally, you can customize your policy even more with a variety of optional riders for additional benefits, including financial help for chronic or terminal illnesses. Your financial professional can help you determine which riders make sense for your unique financial needs.
[On-screen disclosure] Some riders may require health and financial underwriting, may be taxable, and may have additional restrictions and charges associated with them. [End of on-screen disclosure]
Income-tax-free death benefit, tax-deferred accumulation value, income-tax-free policy loans and withdrawals, and optional benefit riders, all in one fixed index universal life insurance policy.
[On-screen disclosure] 1The death benefit is generally income-tax-free when passed on to beneficiaries. [End of on-screen disclosure]
That's how fixed index universal life insurance can help you protect your family throughout the span of your life. Ask your financial professional whether a fixed index universal life insurance policy may be appropriate for you.
[On-screen disclosures]
Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are excercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.
This content is for general educational purposes only. It is not intended to provide fiduciary, tax, or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote, or recommend any tax plan or arrangement. Allianz Life Insurance Company of North America, it's affiliates, and their employees and representatives do not give legal or tax advice. Customers are encouraged to consult with their own legal, tax, and financial professionals for specific advice or product recommendations.
It's important to note that with an external index, your policy does not directly participate in any equity or fixed income investments – you are not buying shares in an index.
Product and feature availability may vary by state and broker/dealer.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America (Allianz).
Products are issued by Allianz Life Insurance Company of North America (Allianz), 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. www.allianzlife.com C64237-MVA, R95528-01-MVA, ICC17C64237-MVA
P64339
[End of on-screen disclosures]
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Discover how FIUL can help create a legacy through the death benefit, reduce taxes, protect assets from creditors, avoid family strife, and even help keep a business in the family.
Get answers about how fixed index universal life insurance works, why you may need coverage, and the application process.
See what sets our fixed index universal life insurance apart from competitive policies – and how you can customize it to your needs.
1 Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.
FIUL requires qualification through health and financial underwriting.
The death benefit is generally income-tax-free when passed on to beneficiaries.
Product and feature availability may vary by state and broker/dealer.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.
Products are issued by Allianz Life Insurance Company of North America, PO Box 59060, Minneapolis, MN 55459-0060.
This content does not apply in the state of New York.
