How an Index Account Works
Indexed Universal Life Insurance
In addition to death benefit protection, indexed universal life insurance provides the potential to earn cash value growth through either a Fixed Account, an Index Account that protects your from losses, or a combination of both. With an Index account, interest is credited based on how a financial index performs. The minimum interest rate is 0 (a floor) that protects against loss. There is also a maximum that would limit growth (a cap). The money in the policy is not directly invested in any index or the stock market.
Rules of the Game
If the Index Account were a game of football and the football team an index selection in a life insurance policy, here’s a breakdown of how the Index Account works in simple terms.
It's always first down.
You can never lose yards (the floor).
Up to a 12 yard gain per play (the cap).
North American changes the rules!
Watch the Play-By-Play below.
The Play-By-Play
Take a look at what happens with these "new rules" in the play-by-play below!
BACK TO STARTClick on the "Next" button or the numbers here to view Play-By-Play!
SCROLL TO GAME SUMMARY
Under normal rules, the team would have gained a total of 19 yards (gains of 10, 8, and 19 with a loss of 18 yards) and the ball would have been spotted at the 39-yard line.
However, with the "new rules," the team, gained 30 yards and the ball is spotted squarely at the 50, which is an
extra 11 yards downfield!
What does this mean for you?
Imagine if the football team was an Index selection in an indexed universal life insurance policy. The maximum 12 yards represents the cap rate, and the fact you never lose yards represents the floor with no downside risk. Each play is a year and the yardage gains are locked in interest crediting!
Talk to your North American financial professional for details on how you can put an Indexed Universal Life Inurance policy to work for you.
Indexed Universal Life products are not an investment in the “market” or in the applicable index and are subject to all policy fees and charges normally associated with most universal life insurance.
Life insurance policies have terms under which the policy may be continued in force or discontinued. Current cost of insurance rates and interest rates are not guaranteed. Therefore, the planned periodic premium may not be sufficient to carry the contract to maturity. The Index Accounts are subject to caps and participation rates. In no case will the interest credited be less than 0 percent. Please refer to the customized illustration provided by your agent for additional detail. The policy’s death benefit is paid upon the death of the insured. The policy does not continue to accumulate cash value and excess interest after the insured’s death. For costs and complete details, call or write North American Company for Life and Health Insurance, One Sammons Plaza, Sioux Falls, SD 57193 Telephone (877) 872-3656.