Home Insurance Glossary - Indexed Life Insurance Contract

The Definition of "Indexed Life Insurance Contract" is:

An arrangement similar to a universal life contract. Death benefit amounts are based on the amount selected by the policyholder plus the account value. The policyholder's account value is linked to cumulative returns based on the S&P 500 index or some other tied index. An essential component of the contract is that the cash surrender value is also linked to a tied index. Typically, the tied index does not include dividends. There may be additional constraints on the amount that the insurance company will credit as interest under this policy.



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