What is indexed universal life insurance?

Elite Index Universal Life II offers many of the same benefits as traditional universal life insurance, with one primary difference—the way interest is credited to the cash value of the policy. Index universal life insurance policies credit interest based partly on the upward movement of a major stock market index, so when the market does well, so do you. Over the life of the policy, this could mean more cash value and more supplemental retirement income. You can access your cash value in your policy anytime after the first year, and the tax-deferred benefits of a traditional universal life policy still apply.

In addition to the protection of a death benefit, think about what other concerns may affect your ability to live comfortably and enjoy your retirement. Do any of these issues concern you?

  • Unexpected healthcare costs due to chronic illness
  • Outliving your retirement income
  • Social security income reduction
  • Unexpected expenses – home repairs, market corrections

Index universal life policies can benefit from the upward movement of an external stock market index. However, the market index can also go down. For those situations, Elite Index II has a minimum guaranteed interest rate that protects against index losses. Your policy is guaranteed to never be credited with less than 0.25 percent interest.
Elite Index II offers you the flexibility to choose among three interest-crediting accounts that fit your needs.

  • Declared interest account with a minimum guaranteed 2.00 percent minimum annual interest rate
  • Index interest account with interest crediting linked to the annual growth of the Standard & Poor’s 500 Composite Stock Price Index (S&P 500® Index) subject to an annual cap (never less than 0 percent) and a minimum annual guaranteed interest rate of 0.25 percent, regardless of index performance.
  • Index interest account with interest crediting linked to the annual growth of the S&P 500 Index subject to a participation rate (never less than 0 percent) and an annual minimum guaranteed interest rate of 0.25 percent, regardless of index performance. You have the potential for higher crediting interest rates when the index is up and the safety of a minimum guaranteed interest rate.

You can make withdrawals or borrow against, the cash value in your policy anytime after the first year. Your index universal life policy can also be used as collateral for securing an outside loan, letting you tap the equity in your policy for a variety of needs: education, retirement and emergencies.

Accelerated Access Solution SM provides access to income tax-free death benefits to help pay for expenses related to a chronic illness. When you meet the health impairment criteria, you can access a predetermined portion of the death benefit every month for as long as the criteria are met, or until the total benefit amount is exhausted, whichever occurs first. Remaining death benefit is paid to beneficiaries income tax-free.

A Choice Loan is available whenever there is an amount of cash value accumulation in the policy. Unlike a Standard Loan, the Choice Loan amount is not deducted from any
of the policy’s index or fixed accounts. The policy values in these accounts continue to participate in the index or declared crediting accounts. Loan interest charged and interest credited to the policy are not linked.

1. The S&P 500 (the “Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by AGL and US Life. Standard & Poor’s® and S&P® have registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). These trademarks have been licensed to SPDJI and sublicensed for certain purposes to AGL. The Elite Index II is not sponsored, endorsed, sold or promoted by SPDJI, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of paying premiums for the Elite Index II nor do they have any liability for any errors, omissions, or interruptions of the Index.
2. Based on current income tax laws.
3. Neither American General Life Insurance Company nor any agent representing it is authorized to give legal or tax advice. Please consult a qualified legal or tax advisor regarding questions concerning the information and concepts contained in this material.