Life insurance
Indexed universal life (IUL)
In plain EnglishLife insurance that protects your family for life and builds cash value linked to a market index — with a guaranteed floor, so a market drop never takes your cash value down.
What it is
An indexed universal life (IUL) policy does everything good life insurance should. It pays your family a death benefit, it comes with living benefits you can use if you’re seriously ill, and it builds cash value you can use during your lifetime.
What sets IUL apart is how that cash value grows. You choose how it’s credited: a fixed rate, or interest tied to the performance of a market index like the S&P 500 — or a mix. When the index rises, your cash value can grow with it, up to a cap. When the index falls, a guaranteed floor — typically 0% or 1% — means your cash value won’t go down because of the drop. Your money is never invested directly in the stock market.
IUL also flexes as your life changes: you can adjust your premium and your death benefit over time. And because it works best when it’s funded well, many families use it for long-term goals like adding to their retirement income.
How it works
Step by step.
- Choose your coveragePick a death benefit and a premium that fit your budget — both can be adjusted later.
- Choose how it growsPut your cash value in a fixed-rate option, index-linked options, or a mix.
- Grow with the index, protected from dropsUp years credit interest up to a cap; down years hit the floor instead of a loss.
- Use it your wayTap your cash value later — for example to add to retirement income — while your family stays protected.
Why people choose it
What we like about it.
- Growth potential linked to a market index
- A guaranteed floor — index drops don’t reduce your cash value
- Flexible premiums and death benefit
- Tax-advantaged cash value you can use in retirement
- Living benefits included free
How IUL growth works
See the floor and the cap at work.
Real S&P 500 years, and what a floor-and-cap strategy would have credited each year. Move the cap and switch the floor to see the difference.
See every year
| Year | S&P 500 | Credited |
|---|---|---|
| 2000 | -10.1% | 0% |
| 2001 | -13.0% | 0% |
| 2002 | -23.4% | 0% |
| 2003 | +26.4% | +10% |
| 2004 | +9.0% | +9.0% |
| 2005 | +3% | +3% |
| 2006 | +13.6% | +10% |
| 2007 | +3.5% | +3.5% |
| 2008 | -38.5% | 0% |
| 2009 | +23.4% | +10% |
| 2010 | +12.8% | +10% |
| 2011 | 0% | 0% |
| 2012 | +13.4% | +10% |
| 2013 | +29.6% | +10% |
| 2014 | +11.4% | +10% |
| 2015 | -0.7% | 0% |
| 2016 | +9.5% | +9.5% |
| 2017 | +19.4% | +10% |
| 2018 | -6.2% | 0% |
| 2019 | +28.9% | +10% |
| 2020 | +16.3% | +10% |
| 2021 | +26.9% | +10% |
| 2022 | -19.4% | 0% |
| 2023 | +24.2% | +10% |
| 2024 | +23.3% | +10% |
For education only — this is not a policy illustration. It uses past calendar-year S&P 500 price changes (without dividends) and a simple floor and cap; real strategies, caps and floors vary by product and can change, and a policy’s cash value also reflects its charges. Past index performance doesn’t predict future results. Only a carrier illustration can show how a specific policy may perform.
Your numbers
Get your personalized IUL illustration.
See exactly how a policy designed for you could grow — built in the insurance company’s own illustration software, for your age, health and budget, and walked through with you by a licensed agent.
- Built around how much you want to put in
- Designed for retirement income, legacy, or both
- No cost, no obligation
Frequently asked questions
Straight answers.
What happens when the market drops?
Your cash value won’t decline because of an index drop. The guaranteed floor — typically 0% or 1% — is what you’re credited for that period instead of a loss.
Is my money in the stock market?
No. Interest is credited based on how an index like the S&P 500 performs, but your money is never invested in the market directly.
Can I change my premium or coverage later?
Yes — that flexibility is a big part of IUL. Increasing your death benefit may require new health questions, and we’ll walk you through the options.
How do I use the cash value in retirement?
Usually through policy loans or withdrawals, which are generally tax-free when the policy is set up and kept in force correctly. We plan this with you from the start.
Often paired with
Related coverage.
Whole life insurance
Coverage for your whole life, with premiums that never go up and cash value that never earns a negative rate.
Learn more →Living benefits
Use part of your death benefit while you’re alive if a serious illness hits.
Learn more →Indexed annuities
Growth linked to a market index like the S&P 500, protected from index drops.
Learn more →General information, not tax or legal advice. Features, availability and rules vary by insurance company, product and state — we’ll walk you through the details of any policy before you apply.
Is this right for you?
Tell us a little about your family and goals. We’ll compare your options side by side — no pressure, no obligation.