Portfolio-Based Rates

Portfolio-Based Rates in Indexed Universal Life (IUL) insurance policies refer to interest rates credited to the cash value account based on the collective performance of an investment portfolio. Characteristics:

• Variable Rates: Fluctuate with underlying asset returns, including equities and bonds.
• Investment Portfolio Performance: Derived from the overall results of various financial instruments the insurance company utilises.

Implications for IUL Policies:

• Potential for Higher Returns: Can offer greater returns compared to traditional fixed-rate universal life policies.
• Market Protection: Provides a measure of safeguarding against market downturns.

Portfolio-Based Rates in IUL policies reflect a dynamic approach to crediting interest, aligning the policy's growth potential with broader market trends.