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IUL Participation Rate Explained

Updated: Mar 13

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Contact Aaron at 844.711.1130 ext. 1 to get started with your IUL account today.

IUL Participation Rate Explained IUL participation rate is actually very simple to understand. If you open an IUL account, your account mirrors a particular stock index. Usually, the most common index is the S&P 500. If the S&P 500 increases 12% -- great! Subsequently, your IUL account increases in value as well.

The percentage of your increase is determined by your Participation Rate in that index. So, if your IUL participation rate is 50% and the S&P 500 increases 12%, then your IUL increases by 6%.

Since 50% = half, then half of 12% = 6%.

But what if there is a 12% decrease in the S&P 500? How much does your IUL account decrease? Does your IUL drop by 50%, then? Ummmm ... nope!

That is a trick question. The beauty of opening an IUL account is that you have a 0% floor. So when the index goes down, your floor kicks in and you do not lose any money. Yes! That is a wonderful thing and a huge advantage over a product like a 401K or IRA where your money is directly invested in the stock market. In 401K or IRA accounts, when the market goes down, the value of your account goes down.

Losing retirement money in a 401K is not a fun place to be, particularly if you are nearing retirement age. But losing retirement savings in a 401K has, unfortunately, been a regular occurrence for people I know. You can possibly recover from losses if you're in your 20s and 30s, maybe even early 40s. But to recover from serious losses in your 50s can seriously alter your retirement plans in ways that are definitely not welcome ... especially when it's really unneccessary. Instead, you can use a life insurance policy with an IUL account for your retirement savings strategy. And another nice thing about IULs is that you may open as many accounts as you want.

So get in touch with us using the chat bot or phone number 844.711.1130 ext. 1 to learn how to take advantage of the benefits Uncle Sam is willing to give to people using life insurance products for retirement savings! It always pays to be financially literate.

To verify my license, visit the California State Department of Insurance website. Enter my California license number 4181215 into the box and click "SEARCH." You will see my ACTIVE license to help you with your IUL. So you can have 100% confidence in working with my company.


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