LIFE INSURANCE
THAT DOES MORE.

What Is Indexed Universal Life Insurance (IUL)?

Indexed Universal Life Insurance, commonly called IUL, is a type of permanent life insurance that combines a death benefit with the potential to build cash value.

An IUL policy can credit interest based partly on the performance of a selected market index, subject to the insurance company's crediting rules. Your policy does not directly invest in stocks or the index.

IUL policies generally provide flexible premium options and adjustable coverage, subject to policy requirements and underwriting. Sufficient funding is necessary to maintain coverage.

IUL Life Insurance With Living Benefits

Living benefits are available on certain IUL policies through accelerated death benefit provisions or optional riders. Depending on the policy, qualifying chronic, critical, or terminal illnesses may allow access to part of the death benefit while the insured is alive.

Living benefit availability, eligibility, covered conditions, benefit amounts, costs, and limitations vary by insurer and state. Accelerating benefits generally reduces the remaining death benefit.

IUL Death Benefit: Protecting Your Family

Indexed universal life insurance provides death benefit protection that can help beneficiaries replace lost income, pay a mortgage, cover household expenses, or address other financial needs.

Life insurance death benefits are generally received income-tax-free by beneficiaries, although exceptions may apply. Coverage must remain in force for the benefit to be payable.

How Does IUL Cash Value Growth Work?

Part of the premium paid into an IUL policy supports insurance costs and policy expenses. Available policy value can earn interest through fixed or index-linked crediting strategies.

Many indexed strategies offer a 0% minimum index-crediting floor for a crediting period, which helps protect against negative index-linked interest credits. However, insurance charges and other policy deductions can still reduce overall cash value.

Caps, participation rates, spreads, and crediting methods determine how much index-linked interest may be credited. These terms vary by policy and may change.

Borrowing Against IUL Cash Value

Some IUL policies allow policyowners to access available cash value through loans or withdrawals. This flexibility may help address emergencies, major expenses, or supplemental retirement needs.

Policy loans accrue interest and can reduce available cash value and death benefits. Excessive borrowing or insufficient policy funding can cause lapse and potential tax consequences. Loan availability depends on policy value and contract provisions.

IUL for Retirement Planning

Properly structured and adequately funded indexed universal life insurance may provide supplemental cash value access during retirement while maintaining life insurance protection.

IUL is not a retirement account such as a 401(k) or IRA. It is a life insurance contract. Potential cash value growth, policy income, and long-term performance depend on premiums, expenses, credited interest, loans, and policy management.

Indexed Universal Life Insurance Cost

IUL insurance premiums and policy costs depend on age, health, tobacco use, coverage amount, underwriting classification, policy design, and insurer.

IUL policies include insurance charges and administrative expenses, and some optional benefits involve additional costs. The amount needed to sustain a policy can change over time.

Requesting an IUL insurance quote allows you to compare available coverage, premiums, living benefits, and illustrated cash value projections.

IUL vs. Term Life and Whole Life Insurance

Term life insurance generally provides death benefit protection for a selected period without accumulating cash value.

Whole life insurance generally provides permanent coverage with contractual guarantees and a more predictable premium structure.

Indexed universal life insurance combines permanent coverage with flexible funding features and index-linked interest-crediting potential. Each option has different costs, guarantees, and responsibilities.

IUL Insurance — Common Questions

Is IUL permanent life insurance?

Yes. IUL is designed as permanent life insurance, but coverage continues only while the policy remains in force and sufficient value or premiums support policy requirements.

Can IUL build cash value?

Yes. IUL policies can accumulate cash value over time. The amount depends on funding, interest credits, insurance charges, and other policy provisions.

Does IUL offer living benefits?

Many IUL products offer living benefit provisions or riders for qualifying illnesses. Coverage and eligibility differ among insurance companies.

Can I borrow money from my IUL?

Many policies allow loans against available cash value. Loans involve interest and may reduce benefits or cause lapse if not managed.

Is IUL protected from stock market losses?

Indexed strategies commonly provide protection against negative index-linked interest credits through a crediting floor. However, policy fees and insurance charges can reduce cash value even when the index-crediting rate is zero.

Is IUL cash value tax-deferred?

Cash value accumulation in a qualifying life insurance policy is generally tax-deferred. The tax treatment of withdrawals and loans depends on the policy's status and circumstances.

How much does IUL insurance cost?

Cost depends on individual underwriting, coverage amount, policy features, and funding design. An individualized quote and illustration are needed to compare available options.

Do I need a medical exam for IUL?

Some insurers offer accelerated or simplified underwriting without a traditional medical exam for eligible applicants. Other applications require additional medical information or exams.

How do I compare IUL insurance quotes?

Compare coverage amounts, premium requirements, living benefits, policy expenses, crediting strategies, loan provisions, and guaranteed versus non-guaranteed illustrations. An independent insurance broker can help review available options.