indexed universal life

Indexed universal life refers to a universal life policy where the cash accumulation is credited with interest based on an index such as the S&P's index.

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If the index goes up, you get interest; if it goes down, you do not. Some policies have a limitation on how high the interest can go and a floor that ensures the interest rate will not be negative. There are many limitations and provisions that should be understood by the buyer and the agent selling these policies.