Home / Indexed universal life

IUL, explained without the sales pitch.

Indexed universal life can be a strong long-term tool for the right person. Here’s exactly how it works, what it costs and when term is the better choice.

How cash value is credited

Your cash value is linked to the performance of a market index, without being invested in it directly. Two numbers do most of the work.

Downside

The floor

Usually 0%. If the index falls, your credited interest for that period is zero instead of negative. Policy charges are still deducted.

Upside

The cap

The maximum rate credited in a period, often around 8–11%. If the index gains 18%, you might be credited 10%.

Access

Policy loans

You can borrow against cash value, often tax-free if the policy is structured and maintained properly. Loans reduce the death benefit.

Run your own comparison.

Change your age, budget and assumed rate. Switch the chart between cash value and death benefit to see what you give up — and gain — with each.

Term vs. IUL, side by side

Adjust the inputs to see how each type of policy behaves over time.

The 0% floor in most IUL policies means a down year credits nothing rather than losing value — but fees still apply.

IUL cash value at age 60$0
Death benefit (both policies)$0
20-year term, same coverage$0

Hypothetical illustration for education only. Not a quote, not guaranteed and not based on any specific carrier’s product. Actual cash values depend on index performance, caps, participation rates, policy charges and your health class.

A happy young couple outdoors, the woman riding piggyback

IUL may suit you if…

  • You’ve already maxed out workplace retirement plans
  • You want permanent coverage for estate or legacy goals
  • You can commit to funding the policy for 10+ years
  • You value a floor against market losses over unlimited upside

Term is likely better if…

  • Your main need is income replacement for 20–30 years
  • Your budget is tight or your income varies year to year
  • You’d rather invest the difference on your own

IUL questions

The floor protects credited interest from going negative, but policy charges, cost of insurance and loans can reduce cash value. Underfunding a policy is the most common way people lose value.
Premium loads, cost of insurance, administrative charges and rider fees. Costs are typically higher in the early years, which is why IUL works best long-term.
It’s different. Most clients should use employer matches and tax-advantaged retirement accounts first. IUL can complement them, not replace them.
Cash value may cover charges for a while, but if it runs out the policy can lapse. We review funding with you every year to avoid surprises.

Light the way for the people who count on you.

A 30-minute strategy call. We’ll review what you have, what you need and what it would cost — then you decide.

Book a strategy callCall (555) 019-3340