8 Strategies to Keep Your Indexed Universal Life Insurance Policy on Track

Indexed Universal Life Insurance (IUL) is a flexible and potentially lucrative financial tool that combines life insurance protection with the opportunity for cash value growth linked to a stock market index. However, to maximize the benefits of your IUL policy and ensure it remains on track, effective management strategies are essential. Here are eight key strategies to help you manage your IUL policy successfully.

1. Understand Your Policy

The first step in keeping your IUL policy on track is to thoroughly understand its features and terms. This includes knowing how the interest is credited based on the performance of a selected stock market index, the caps and floors that limit and protect your cash value growth, and the cost of insurance (COI) charges. Familiarizing yourself with these elements will help you make informed decisions and manage your policy effectively.

2. Monitor Policy Performance Regularly

Regularly reviewing your policy’s performance is crucial. Keep track of the credited interest, cash value growth, and any changes in the stock market index. This will help you understand how well your policy is performing and whether any adjustments are needed. Regular monitoring allows you to make timely decisions that can positively impact your policy’s long-term value.

3. Maintain Consistent Premium Payments

Consistency in premium payments is vital to keeping your IUL policy in good standing. While IUL policies offer flexibility in premium payments, making regular contributions helps build your cash value more effectively. Skipping or reducing premiums can hinder cash value growth and may lead to higher costs later. Establish a payment plan that fits your financial situation and stick to it.

4. Adjust Premiums When Necessary

Take advantage of the flexibility offered by IUL policies to adjust your premium payments based on your financial circumstances. During periods of higher income, consider making higher premium payments to boost your cash value. Conversely, if you face financial challenges, you can lower your payments within the policy limits to maintain coverage. This flexibility helps you adapt to changing financial conditions without compromising your policy.

5. Use Loans and Withdrawals Wisely

IUL policies allow for loans and withdrawals from the cash value, but these options should be used judiciously. Excessive loans or withdrawals can deplete your cash value and potentially cause your policy to lapse. Always evaluate the long-term impact of borrowing against your policy and aim to repay any loans to restore the cash value. Using policy loans strategically can provide financial flexibility without jeopardizing the policy’s benefits.

6. Reinvest Dividends

If your policy credits dividends to your cash value, consider reinvesting them rather than taking them as cash. Reinvesting dividends can accelerate cash value growth, enhancing the overall value of your policy over time. This strategy allows your policy to benefit from compound interest, increasing its financial benefits in the long run.

7. Schedule Regular Policy Reviews

Regular reviews with your insurance agent are essential to ensure your policy aligns with your financial goals. These reviews provide an opportunity to assess your policy’s performance, make necessary adjustments to premiums or death benefits, and discuss any changes in your financial situation. An annual review can help you stay on track and make informed decisions about your IUL policy.

8. Stay Updated on Market Trends

Since the interest credited to your IUL policy is linked to a stock market index, staying informed about market trends and economic conditions is crucial. Understanding market movements helps you anticipate changes in your policy’s performance and make proactive adjustments. Staying updated on financial news and trends will enable you to make better-informed decisions about your policy’s management.

Final Thoughts

Managing an Indexed Universal Life Insurance policy effectively requires a proactive approach and a clear understanding of the policy’s features and benefits. By understanding your policy, monitoring its performance regularly, maintaining consistent premium payments, adjusting premiums when necessary, using loans and withdrawals wisely, reinvesting dividends, scheduling regular policy reviews, and staying updated on market trends, you can ensure that your IUL policy remains on track and continues to support your long-term financial goals.

Regular reviews with your insurance agent and financial advisor will help you navigate any changes and make necessary adjustments, ultimately maximizing the value of your IUL policy. By following these strategies, you can make the most of your IUL policy and ensure it remains a valuable part of your financial planning.

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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.