Understanding IUL
What Is IUL? Life Insurance That Protects and Builds Value
IUL (Indexed Universal Life) explained: lifetime protection, cash value with growth potential, a floor in down years and flexible premiums.
6 min read
Start with a question
What if your life insurance could protect your family and grow with you at the same time?
In plain language
IUL, or Indexed Universal Life insurance, is permanent life insurance that protects your family for life and also builds cash value. That’s why many people look for it as “life insurance with savings” or “life insurance with growth”: it’s protection and financial planning in one policy.
Your money isn’t invested directly in the stock market. Your cash value is credited interest based on the performance of a market index, such as the S&P 500, depending on your policy’s options. When the index rises, you’re credited interest up to your policy’s cap. When it falls, the floor keeps your credited interest from going negative.
IUL also offers flexible premiums and lets you access your cash value through policy loans or withdrawals for goals like education, emergencies or supplemental retirement income.
Index rises 10%
Index
+10%
Credited
+10%
With 100% participation, 10% interest is credited.
Index rises 6%
Index
+6%
Credited
+6%
With 100% participation, 6% interest is credited.
Index falls 8%
Index
−8%
Credited
0%
The 0% floor keeps your credited interest from going negative.
Example with 100% participation and a 0% floor. Each contract sets its own values.
A practical example
Example
Imagine Roberto, 32, who wants to protect his wife and children and build a backup for retirement. With an IUL, his family is protected for life and his cash value has the potential to grow year after year, with a floor in down years.
Keys to get the most from it
- Start early: time is your cash value’s best ally.
- Fund your policy consistently to keep it growing.
- Review your annual statement with your licensed professional.
Common questions
Request Free IUL Information
Request Free IUL InformationReady to put what you learned into action?