Indexed Universal Life
Permanent protection with index-linked cash value — and real trade-offs.
IUL is a life insurance contract first. Understand the crediting limits, costs, and loan mechanics before you look at an illustration.
The mechanics
What an IUL policy is
- A death benefit at the core. Cash value accumulation is secondary and depends on how the policy is funded and what it costs.
- Index-linked crediting. Interest is credited based on index movement within carrier-set caps, participation rates, and floors — you are not directly invested in the market.
- Tax-advantaged mechanics. Cash value grows tax-deferred, and properly structured policy loans may provide access to it. Treatment depends on how the policy is funded and maintained.
The other side
What an IUL policy is not
- It is not a market investment. Crediting can be lower than illustrated — including zero in flat or down index years — while policy charges continue.
- Loans and withdrawals reduce cash value and the death benefit, and an underfunded policy can lapse.
- Illustrations are projections, not promises. Always review the guaranteed-column values next to the illustrated ones.
Next step
Bring us your questions
A licensed professional can walk through carrier illustrations with the guaranteed columns side by side — and tell you when IUL is the wrong fit.