State insurance regulators are taking a closer look at indexed universal life insurance products amid concerns that some illustrations overstate potential returns. These policies tie cash value growth to stock market index performance while offering downside protection through guaranteed minimum crediting rates.
Critics argue that the complexity of cap rates, participation rates, and spread charges makes it difficult for consumers to compare products or understand their true cost. Several states have proposed updated illustration standards.
Proponents counter that IUL policies remain a valuable tool for tax-advantaged wealth accumulation when properly structured and disclosed.
