Indexed Universal Life
What Is Indexed Universal Life Insurance?
Indexed Universal Life (IUL) insurance is a type of permanent life insurance that offers flexible premiums, an adjustable death benefit, and a cash value component that grows based on the performance of a stock market index — such as the S&P 500 — while protecting against market losses.
IUL policies are increasingly popular as a retirement planning tool because they offer the potential for tax-advantaged growth, flexible access to cash value, and a death benefit for your beneficiaries.
How IUL Works
- A portion of your premium goes toward the death benefit
- The remainder builds cash value in an indexed account
- Cash value growth is linked to a market index (e.g., S&P 500)
- A floor (typically 0%) protects against market losses
- A cap or participation rate limits maximum gains
Key Benefits of IUL
- Permanent life insurance coverage
- Market-linked growth potential with downside protection
- Flexible premium payments
- Tax-advantaged cash value accumulation
- Tax-free loans and withdrawals from cash value
- Can supplement retirement income
IUL as a Retirement Tool
- Cash value grows tax-deferred
- Withdrawals and loans can be taken tax-free in retirement
- No contribution limits (unlike 401(k) or IRA)
- No required minimum distributions (RMDs)
- Provides income even if you live longer than expected
Who Should Consider IUL?
- High-income earners who have maxed out other retirement accounts
- Business owners seeking tax-efficient savings
- Individuals who want permanent life insurance with growth potential
- Those looking for a supplemental retirement income stream
- Anyone who wants market participation without market risk
Ready to See How IUL Can Work for You?
Use our life insurance calculator to assess your coverage needs, or contact us for a free personalized assessment.