Policy values can grow each year based on the performance
of certain market indexes, but are not subject to market losses as would be the case with variable insurance products.
Indexed universal life is a cash value life insurance policy that is credited interest based
on certain market indexes such as the S&P 500, NASDAQ, DOW, EURO STOXX and HANG SENG.
They may also allow you to
trade certain market indices, such as the ASX 100, which aggregates the price movements of all the top 100 stocks listed on the Australian Securities Exchange (ASX).
For consumers looking for a more aggressive investment, there is a Universal Life policy (Indexed Universal Life) that allows the policyholder to invest funds into an account that earns interest based
on certain market indices (e.g. the S&P 500), which allows it to earn considerably more interest.
Certain market indexes are unmanaged and, therefore, have no expenses.
Some investors use ETFs to get exposure to
certain market indexes, but Vanguard ETFs don't always track the most common index.
Index funds are essentially a type of mutual fund where its holdings are meant to match
a certain market index.
Equity Indexed Universal Life Insurance — This type of policy will have its cash value performance linked to
a certain market index.