How does a Child Life Portfolio grow?

Child Life Portfolio growth combines market participation with principal protection:

The Index-Linked Strategy Your cash value doesn't directly invest in the market. Instead, the insurance company: 1. Tracks a market index (usually S&P 500) 2. Credits your account based on index performance 3. Applies a 0% floor - you never go negative 4. Applies a cap - typically 8-12% maximum credit

How Crediting Works

Positive Year Example - S&P 500 returns 15% - Your cap is 10% - You receive 10% credit (capped) - Cash value grows by 10%

Down Year Example - S&P 500 drops 20% - Your floor is 0% - You receive 0% credit (floored) - Cash value stays flat - no loss

Why This Matters

Avoiding Losses Is Powerful $100,000 that drops 20% = $80,000 $80,000 needs to gain 25% just to get back to $100,000

With a 0% floor, you never dig this hole.

Long-Term Performance Historical backtesting shows IUL strategies often match or beat market returns over 20+ year periods because avoiding deep losses accelerates compounding.

Compounding Over Time Starting at birth, your child's policy has 18-60+ years to grow: - $300/month for 18 years - Conservative 6% average annual growth - Potential cash value: $100,000+

Factors Affecting Growth - Premium amount and consistency - Index performance - Cap and floor rates - Policy charges and cost of insurance - Time in the market

Tax-Free Growth Like a Roth IRA, growth inside the policy is not taxed annually. Unlike a Roth, there are no contribution limits.