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Floor Rate (for Indexed Policies)

The Floor Rate in an indexed life insurance policy is the minimum interest rate credited to the cash value, even if the linked market index performs poorly. It prevents your policy from losing value in a down market, so your cash value is protected.

While the floor rate offers security, the policy also limits the upside through caps or participation rates. It’s a balance between safety and moderate growth, which appeals to those who want some market exposure without full risk.