Indexed Universal Life (IUL)

What is indexed universal life?

An IUL policy pays a death benefit to your beneficiaries and builds a cash value. Each year the carrier credits interest to the cash value based on how the chosen index moved, within limits set in the policy: a cap or participation rate on the upside, and a floor, often 0%, on the downside.

The policy's costs, including the cost of the insurance itself, come out of the cash value every month. If the credits are low and the premiums paid are too small to cover those costs, the cash value can shrink and the policy can lapse. A well-designed IUL is funded with that in mind and reviewed every year.

Who IUL is for

• People who want permanent coverage and room for more cash value growth than whole life usually offers.
• Earners who can fund a policy steadily over many years.
• Families who want to raise or lower premiums within the policy's limits.
• People who want access to cash value later through policy loans or withdrawals.

What it helps cover

The death benefit goes to your beneficiaries for whatever they need. While you're living, the cash value can be borrowed against or withdrawn, for example to add to retirement income or meet a large expense. Loans and withdrawals reduce the death benefit and the cash value, and taking too much can cause the policy to lapse, so they're planned with your agent.

Why work with an independent agency

IUL designs vary widely: caps, participation rates, charges, index options and loan terms all differ by carrier and change over time. We show you illustrations from the carriers you qualify with, explain what is projected and what is not, and set the premium so the policy is funded for the long term. An illustration is not a promise, and the carrier makes the final decision on every application.