An IUL Provides Stability in Market Downturns

As people approach retirement, a big concern is gaining stability during market downturns. Accessing cash from traditional investments and selling stock can really hurt your portfolio, and put your principal in a compromising position. An IUL can provide stability in market downturns in a way that allows you to keep your higher risk investments stable.

Predictable Rate Of Return

One major reason IUL’s can weather downturns more effectively than your investment products is that IUL’s come with a floor or minimum guaranteed interest rate. A policies’ cash value is linked to a market index, and even if that index performs poorly or experiences a downturn, you are protected from losing any cash value. This applies to both basis (money you’ve put in) and earned interest. Most, but not all, IUL indexes conversely have market caps, meaning your cash value won’t grow as much as traditional investments in strong market conditions, but the tradeoff is this stability.

Cash Value Loans

Another reason an IUL can provide a more stable income is through cash value loans. As a policy holder, you will have the option to access cash value through low-interest policy loans (that do not impact your principal, meaning the account continues to grow against the value prior to the loan), or possibly withdrawls depending on your circumstances. While it’s important to note that withdrawing too much could negatively impact the policy’s performance, having access to cash value can be a valuable resource during financial challenges or market downturns.


IUL policies typically offer flexibility in premium payments and death benefit amounts. During market downturns or challenging financial times, policyholders may have the option to adjust their premiums or death benefits to better suit their financial situation.

Tax-Advantaged Growth

The cash value within an IUL policy grows tax-deferred, meaning you won’t be taxed on the gains as long as the money remains within the policy. This can provide some tax advantages, especially during market downturns when taxable investment gains may be limited.

It’s crucial to carefully review and understand the terms and conditions of any insurance policy, including an IUL policy, and consult with a financial professional to ensure it aligns with your financial goals and risk tolerance.  If you’re interested in learning more about a policy, please call 512-922-1273, use our contact form, or schedule a time to speak.