If a client owns an indexed life insurance product and the market suffers a significant downturn, what will happen to the policy's values?

An indexed life insurance product links the growth of the policy's cash value to a stock market index, like the S&P 500. However, these policies also have built-in protection from losses due to market downturns. This means that if the market experiences a decline, the policy's values will not decrease and remain safeguarded.

The design of indexed life insurance ensures that policyholders can participate in market gains to a certain extent while being shielded from losses when the market performs poorly. Therefore, when the market suffers a downturn, the values in the indexed life insurance policy will remain stable, unaffected by the negative performance of the index to which they are tied. This aspect is crucial for customers seeking stability and security in their life insurance products, particularly in volatile market conditions.