Fixed Interest Rate refers to the predetermined, stable rate of return that is applied to a portion of the policyholder's cash value account.
Fixed Interest Rate refers to the predetermined, stable rate of return that is applied to a portion of the policyholder's cash value account.
Unlike the interest earned through market-linked indices, which can fluctuate based on the performance of the index, the fixed interest rate provides consistent and guaranteed growth. It serves as a safety net to ensure that, regardless of market conditions, the policyholder's account experiences some level of positive growth.
Insurance companies often set this rate based on various economic factors, and it's usually specified in the policy contract. This feature contributes to the appeal of IUL policies, as they can offer a blend of market participation along with the security of fixed returns.
Fixed Interest Rate refers to the predetermined, stable rate of return that is applied to a portion of the policyholder's cash value account.