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Indexed universal life insurance (IUL)
Permanent life insurance with cash value growth linked to a market index like the S&P 500, plus a floor that protects your cash value from index losses.
How IUL works
Your cash value earns interest based on how a market index performs, up to a cap. If the index falls, the floor, often 0%, keeps your credited interest from going negative. Your money isn't invested directly in the market.
Premiums are flexible within limits, and the policy's cost of insurance and fees are deducted from your cash value. A properly funded IUL can provide lifelong coverage and tax-advantaged access to cash value through policy loans.
- Coverage length
- Lifetime, if properly funded
- Growth
- Linked to an index, subject to caps
- Downside protection
- A floor, often 0%
- Premiums
- Flexible within limits
Is IUL right for you?
A good fit if you
- Want permanent coverage with more growth potential than whole life
- Have maxed out your 401(k) or IRA contributions
- Are a business owner planning for retirement or succession
- Can commit to funding the policy consistently
Keep in mind
- Caps and participation rates limit your upside
- Fees and insurance costs rise with age and reduce cash value
- Underfunding can cause the policy to lapse
- Illustrations are projections, not guarantees
This page is general information, not tax or investment advice. Policy features, caps, and floors vary by carrier and state.
IUL questions
Don't see yours? Ask us directly.
Is IUL an investment?
No. It is life insurance. Your cash value is credited interest based on an index, but it isn't invested in the stock market.
Can I lose money?
Index losses won't reduce your credited interest below the floor, but policy charges are still deducted, so cash value can fall in years with low or zero credits.
Can I use an IUL for retirement income?
Many people take policy loans for income in retirement. Loans are generally not taxed if the policy stays in force, but an unpaid loan reduces the death benefit. Talk with a tax professional about your situation.
IUL or whole life: which is better?
Whole life offers guarantees; IUL offers flexibility and more growth potential with less certainty. We'll compare both using your goals and budget.
Compare IUL quotes from multiple insurers
A short call with a licensed agent is all it takes to see your options.