In the context of an Indexed Universal Life (IUL) insurance policy, the "floor" refers to the guaranteed minimum interest rate that the policyholder will earn on their cash value, regardless of the performance of the underlying index (e.g., S&P 500).
In the context of an Indexed Universal Life (IUL) insurance policy, the "floor" refers to the guaranteed minimum interest rate that the policyholder will earn on their cash value, regardless of the performance of the underlying index (e.g., S&P 500).
Typically set at 0% or 1%, this floor ensures that even if the market experiences a downturn, the policyholder's account will not lose value due to negative market returns. This feature is one of the aspects that differentiate IULs from other types of market-linked investment vehicles, offering a level of protection against market volatility.
In the context of an Indexed Universal Life (IUL) insurance policy, the "floor" refers to the guaranteed minimum interest rate that the policyholder will earn on their cash value, regardless of the performance of the underlying index (e.g., S&P 500).
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