Life insurance protection
The policy provides a death benefit while it remains in force, subject to its terms and conditions.
Learn the fundamentals
What Is Indexed Universal Life Insurance?
Understand how IUL works, what it may offer, and the trade-offs to consider before deciding whether it's appropriate for you.
Life insurance first. Cash value as a policy feature.
Indexed Universal Life (IUL) is a type of permanent life insurance. It provides a death benefit and may accumulate cash value. Interest credited to the cash value is calculated using a formula linked in part to an external index, subject to the policy's terms.
An IUL policy is not a direct investment in the stock market. Index-linked crediting is governed by policy rules, which may include caps, participation rates, spreads, floors, and other limitations. Policy charges and the way a policy is funded can materially affect its performance.
Questions to understand
Potential benefits—and important considerations.
Cash-value potential
Cash value may grow over time, but results depend on premiums, charges, credited interest, policy design, and policy performance.
Access and policy loans
Some policies permit withdrawals or loans. These can reduce cash value and death benefits, incur costs, and contribute to lapse or tax consequences if not managed carefully.
Is an IUL right for everyone?
No. IULs are long-term life insurance contracts with costs, complexity, and risks. They may not suit people who need low-cost temporary coverage, cannot maintain planned premiums, or need ready access to all their money. Illustrations are not guarantees, and actual results can differ from illustrated values.
What should you ask before buying?
- What is the death benefit and how much does the coverage cost?
- What premiums are planned, and what happens if they change?
- How do caps, participation rates, floors, and policy charges work?
- How could loans or withdrawals affect the policy?
- What assumptions are guaranteed versus non-guaranteed in the illustration?
- What are the surrender charges, tax considerations, and risks of a policy lapse?
This page is for general education, not a recommendation to purchase a policy or tax advice. Policy details differ by carrier and contract. Consult appropriately qualified professionals about your circumstances.
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