The primary reason to buy life insurance is to provide a general income-tax-free death benefit to the ones you love — the people who depend on you. Based on current federal income tax law. This doesn’t have to be the only reason to buy life insurance any longer. More people are turning to life insurance for:
- Supplemental retirement income
- Tax diversification
- Long-term cash value accumulation
About AIG Life Insurance
Why AIG Index Universal Life Insurance (IUL)?
When you purchase an AIG IUL policy, you have the power to choose what works for you. You can decide, within policy guidelines, to:
- Pick your death benefit: Purchase an amount that fits your needs. Increasing overtime? Level? Your choice.
- Pick your premium amount: As long as certain rules are followed, your premiums can be flexible. Start low and increase later? Put more in now and slow down later? Your call.
- Pick your premium frequency: If you like contributing annually, no problem. Twice per year works, too. Quarterly is just fine. Monthly? Also good! You pick!
- Pick how your policy cash value grows: You have five ways to credit interest on your policy. There are four index strategy choices available and one Declared Interest Account option that is based on a fixed interest rate. Do you want 100% in one account? Or 25% into each of the index interest accounts? Any mix that you can imagine, we can, too!
You can also withdraw cash value or borrow against the policy tax-free for any reason later on, for example, but not limited to:
- Supplementing retirement income
- Starting a business
- Paying for college or a wedding
- Covering emergency or business expenses
- Purchasing a vacation home or taking a vacation
- Making home improvements
It’s really up to you—it’s just nice to have a policy that you can use to help meet some of life’s challenges.
How does it work?
AIG Index Universal Life Insurance (IUL), also called cash value life insurance, is a flexible permanent life insurance policy that may fit many needs. An IUL policy can provide you with tax-free income and a greater potential for growth than a traditional universal life policy while safeguarding against market downturns. That’s because an IUL policy offers the potential to credit interest based in part on the upward movement of a stock market index. Additionally, an IUL policy offers protection against the impact of market downturns because no less than 0% interest can be credited to the various account options within the policy. Plus, there’s a crediting bonus guaranteed at no less than 0.10% through an Account Value Enhancement in policy year 6 and later.
We call it, “upside potential and downside protection.”
It is important to note that IUL is not an investment; it is a life insurance product that provides growth potential through index interest crediting. You cannot invest directly in an index.
We also offer a Declared Interest Account option based on the current interest rate environment that is credited at the end of each policy month (as opposed to the one-year point-to-point strategy) but has no ties to index market performance. The minimum declared interest is guaranteed never to be less than 2.0%. There is also a crediting bonus on the Declared Interest Account from year 6 and after, which is guaranteed no less than 0.10%.
Shop, compare, and apply for AIG Life Insurance.
How do IUL accounts share in the upside and protect against the downside?
Generally speaking, when the index goes up, the amount of interest credited to the policy can go up. If the index goes down, there’s simply nothing credited, as you can see below. As an example of how this works, imagine an index that goes up 20% in year one, but then falls -10% the next. IUL index strategies are designed to help you share in the positive years while protecting your cash value in the negative years. So in year one, you get 12% of the upside, and in year two you experience no losses as a result of the downturn.
Maximizing your distributions
The cash value can be disbursed through a variety of access points, depending upon your situation and at your discretion. Some are built-in. Some are optional. Some must be elected at the time of purchase.
FOR LOVED ONES
- Lump-sum death benefit
- Select Income Rider (installment payout plan)
Lump-sum life insurance benefit
Flexible funds for your family or business if you die too soon.
It is generally income tax-free, distribution of policy death benefit to your beneficiary upon the passing of an insured.
You can use this option to help ensure your family or business lives on with a lump-sum life insurance payment.
Installment Payout Plan (Select Income Rider)
Flexible income for your family or business if you die too soon.
This option distributes the life insurance death benefit in installments rather than a lump sum, to help your beneficiaries manage ongoing expenses. Selecting this rider may also lower your policy’s cost of insurance charges, which may enable your cash value to accumulate faster.
You can also opt for just a partial amount to be paid as a lump sum and the remainder in installments. The rider provides annual payout options over a specified period for the life insurance benefit amount chosen.
Important to note: this option is selected at issue and is irrevocable. It provides a guaranteed income stream for your beneficiaries that will grow at a fixed interest rate. There is no charge for this rider. If you elect this rider, it cannot be terminated following the Date of Issue.
Policy owner disbursements:
- Income for Life rider
- Accelerated Access Solution Rider (Chronic Illness Rider)
- Policy loans & withdrawals
Guaranteed Income for Life (Income for Life Rider)
Flexible income for your retirement.
With this rider, your cash value can be used to produce a guaranteed stream of lifetime income for you, plus includes an optional annual cost-of-living increase.
Important to note: There is no additional charge to add this rider to the policy; a one-time-only charge is deducted from the accumulation value when you choose to activate it.
Chronic Illness Rider
Accelerated Access Solution (AAS)
Income to help if you get sick along the way.
This rider allows you to access a portion of your death benefit if you suffer from a qualifying illness or condition. Choose from payments of 2%, 4%, or an IRS per diem amount monthly. The tax-free income can be used to cover:
- Medical expenses
- Long-term care
- Supplement lost income
- For any other purpose.
Important to note: AAS is elected at the time of policy purchase for an additional charge.
Policy Loans & Withdrawals
Flexible income for you at any time, for any purpose
These are features that you can use any time, when eligible, to access cash value for any purpose you choose. You can select from one or a combination of three types of policy loans: Standard (Fixed), Preferred, or Participating, that:
- Are potentially income tax-free
- Offer fast access to cash when needed
- Provide potential for positive interest earnings on loaned money
- Have no repayment plan required