Market Index

A Market Index in the realm of Indexed Universal Life (IUL) insurance policies, refers to a stock market index used as a benchmark for crediting interest to the policy's cash value. Notable indices include:

• S&P 500: A broad representation of the U.S. stock market.
• Dow Jones Industrial Average: An index of 30 significant U.S. companies.
• NASDAQ-100: Focused on 100 of the largest non-financial companies listed on the NASDAQ stock market.

How it Affects IUL Policies:

• Performance-Based Returns: The chosen index's performance, within set limits, directly influences the policy's returns.
• Cap and Floor Protection: These limits provide upside potential from market gains while offering a safeguard against significant losses.

This mechanism allows IUL policyholders to potentially enjoy market-linked growth while minimising risk exposure.