Sentences with phrase «linked subaccounts»

It should be noted that index - linked subaccounts do not pay dividend interest associated with the indices they track.

Even if the market is moving upwards, if volatility is elevated the higher costs the insurance company must pay as a result can result in reduced cap and participation rates, reducing the amount of interest credited to your index - linked subaccounts.

This extra expense can cause them to adjust the cap and participation rates to reduce the amount of interest they pay on index - linked subaccounts to maintain their profit margins.

The ability to invest in equity - linked subaccounts with your IUL cash account offers you the chance to experience faster growth during periods when the stock market performs well, subject to policy features such as cap and participation rates.

Due to the mechanics used to generate earnings to pay interest to index - linked subaccounts, the profit an insurer makes on IUL policies is subject to the premiums charged for buying options on the indices being tracked.

These restrictions, combined with the lack of any dividend payments from the indices being tracked, means that from a pure growth potential perspective, a direct investment in an index ETF or mutual fund is likely to outperform an IUL index linked subaccount.

An attractive feature of Indexed Universal Life policies is a floor rate, which represents the minimum an index - linked subaccount can earn (or the maximum it can lose) in any one period.

Not exact matches

These features limit how much such subaccounts can grow relative to the performance of the linked index.