Indexed Universal Life is, out of the various kinds of Life Insurances available where your interest income are dictated, a deviation that a few may well prefer to check out as it provides more flexibility and options with regards to your interest income. When you read regarding Indexed Universal Life, what you're dealing with is a certain approach that the interest is given to your funds amount, which might give you a higher chance of interest earnings and since that eventually indicates you can spend less premiums later on or pull more cash from the policy, the higher your funds worth increases, the better.
Many universal life deals now present an interest crediting strategy that's associated with a major equity index which, rather than earning a non-guaranteed 4% per year as established by the insurance companies, allows you to try your chances in an Indexed Life Insurance strategy in which, depending on the flow of the stock market, you can generate nearly 8% or 10% in a given year.
Since when the index goes down you can get no interest income at all, as you may envision when evaluating Indexed Universal Life Pros and Cons, this may be a high risk game at the same time if you adhere to the usual life insurance types, a 3% to 5% gain is available. But this was certainly not intended as a sure strategy to acquire any interest revenue but rather an option for the more daring or committed clients to test their luck on a gamble that can take a lot if not all if you lose and pays off high when you win. So this type is undoubtedly not for your needs if you think that the peril is too high or perhaps that you're not much of a risk taker from the start.