If you are curious about the equity indexed universal life insurance pros and cons, then look no further. This is a type of life insurance in which you may increase or decrease your death benefit in the case of any changes you may have to your life or needs. What’s more, you can also adjust your premiums. Equity indexed universal life insurance (EIUL) policies retain a cash value as well. You can use this to pay your premiums or possibly borrow against it at some point in the future.

The cash value on your policy grows interest. The amount of interest you receive depends upon how well a certain index performs. What this boils down to is that when the index is prospering your credit rating will too, and your credit rating will not do so well when the index is failing.
Most of the time you can get a guarantee from your company that your credit rating will not get below zero, no matter what. If this is the case you won’t make any money, but at least you won’t lose any either. On the other hand, there is usually a cap in place as to an absolute highest credit rating that you are able to receive from them.

Many times when people are trying to choose an insurance policy they are struggling to decide between the safer option which offers lower cash value but a decent guarantee, and a risky option with better earning potential and minimal loss protection. Equity indexed universal life insurance has pros and cons, but it is meant to be a sort of combination of these two types of insurance. When the year ends, your cash value may rise with the index. On the other hand, you can still earn the minimum guaranteed interest rate if the interest rate goes down. You will want to keep the fees in mind here, and also remember that your cash value will not include capital gains or dividends.

You will not find the same high interest crediting rates in the traditional universal policies that you will with EIUL. You can also feel more secure with these policies, and not have to worry as much about market fluctuations.

This doesn’t come without some risk, however. Also, there is a cap placed on what you can earn, and the company can change it at any time.

You will find that EIUL does not have the guaranteed rates of universal life insurance, and you won’t get the same market participation as you would with variable life insurance. Still, it is nice to have another option available to choose from. Some people may find that their needs have not been completely met by the other options, and they have found their answer in EIUL.

Do you like the idea of the cash accumulation offered by variable life insurance, but not the risk involved? Do you prefer the safety of universal life insurance, but just wish you could get a higher potential for cash flow accumulation? Then you should probably weigh out the equity indexed universal life insurance pros and cons, because this just may be the right choice for you!

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