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Indexed Universal Life (IUL)

Lifelong Protection With Room to Grow

Indexed universal life insurance pairs a death benefit with cash value that can earn interest linked to a market index, with protection from index losses. We explain how it works in plain English and compare options from A-rated financial companies.
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What it is

Permanent coverage with cash value potential.

Indexed universal life (IUL) is a type of permanent life insurance. Part of each premium pays for your coverage, and the rest can build cash value inside the policy over time.

That cash value earns interest based on the performance of a market index, such as the S&P 500, up to a cap. You are not invested in the market directly, so when the index falls, your cash value is protected from those losses. Fees and policy charges still apply, so we walk you through the details before you decide.

Coverage designed to last your whole life
Cash value growth linked to a market index
Protection from index losses (a 0% floor on credited interest)
Flexible premiums and an adjustable death benefit
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Key features

How IUL works for you

Six features that make IUL a popular choice for families who want protection today and flexibility for tomorrow.

Lifelong death benefit

Coverage that can last your entire life, as long as the policy stays properly funded.

Index-linked growth

Cash value earns interest based on a market index, up to a cap set by the policy.

Downside protection

A 0% floor means index losses are not credited to your cash value. Fees still apply.

Flexible premiums

Adjust how much and when you pay, within the limits of your policy.

Tax advantages

Cash value generally grows tax-deferred, and properly structured policy loans may be income-tax-free.

Living benefits

Many policies offer riders that let you access funds if you face a qualifying illness.

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Benefits & considerations

The full picture, before you decide

IUL can be a powerful tool, but it isn’t right for everyone. Here’s an honest look at both sides.

Benefits

Permanent protection for the people who depend on you
Cash value growth potential linked to a market index
Protection from index losses on credited interest
Tax-advantaged access to cash value through policy loans
Flexibility to adjust premiums as life changes

Things to consider

Caps and participation rates limit how much interest you can earn
Policy fees and cost of insurance can reduce cash value
Policies need to stay adequately funded to avoid lapsing
Loans and withdrawals reduce the death benefit and cash value
Surrender charges may apply in the early years

Why it matters

The right policy doesn’t only protect your family tomorrow. It can give you more options while you’re still here to enjoy them.

FAQ

IUL questions, answered

Still have questions? Book a free consultation and we’ll walk you through how IUL could fit your plans.
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Is my money invested in the stock market?
No. Your cash value is not invested directly in the market. Interest is credited based on the performance of an index, subject to caps, participation rates and a floor that protects against index losses.
What is a cap rate?
A cap is the maximum interest rate your cash value can be credited in a given period, even if the index performs better. Caps vary by policy and can change over time.
Can I lose money in an IUL?
Index losses are not credited to your cash value, but policy fees and the cost of insurance continue to be deducted. If a policy is underfunded, cash value can decline and the policy could lapse.
How is IUL different from whole life?
Whole life typically has fixed premiums and a guaranteed cash value schedule. IUL offers more flexibility and index-linked growth potential, with less predictability. We’ll compare both for your goals.
How do I access my cash value?
You can usually take policy loans or withdrawals. Loans are generally not taxed when structured properly, but they accrue interest and reduce the death benefit. We recommend confirming tax details with a tax professional.

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