Universal Life Insurance in Las Vegas, NV
Universal Life Insurance is a flexible insurance and investment product. It combines a level death benefit similar to Term Life with a cash value similar to Whole Life. The cash value that you accumulate is indexed to the stock market. This is a powerful investment tool with tax treatment similar to a Roth IRA.
How Indexed Universal Life Works
When you pay a premium a portion of it goes towards a renewable term insurance policy and the remainder is added to the cash value. The total amount of cash value is credited with interest based on increases in an equity index; however it is not directly invested in the stock market. Usually the policy guarantees a minimum fixed interest rate if the market under-performs. Gains in the cash account are allowed to grow tax deferred.
Tax Advantages of Universal Life Insurance
You investment in Universal Life Insurance grows tax deferred and is distributed tax-free. This is part of what makes Universal Life Insurance so powerful - your investment gains are not taxable and will be distributed to you tax-free. The only other investment vehicle that can shelter your income this way is the Roth IRA; however, many people do not qualify for the Roth IRA. In addition, Universal Life Insurance doesn't have limits on what you can contribute.
Investments Advantages of Universal Life Insurance
Universal Life Insurance allows you to index your investment account with the stock market so that your investment increases in value as the market goes up. But, unlike a traditional investment in the market, Universal Life Insurance never loses value when the market goes down. You have the upside benefit of the market without the downside risk!