Indexed Universal Life (IUL)
Permanent coverage with market-linked growth and a floor.
Quick answer
Indexed universal life (IUL) is permanent life insurance whose cash value earns interest based on a stock market index like the S&P 500, with a cap on gains and a floor (often 0%) that protects against market losses. Premiums are flexible, and cash value can be accessed through policy loans for retirement income.
- Coverage length
- Lifetime (if funded)
- Premiums
- Flexible
- Cash value
- Index-linked with floor
- Typical floor
- 0%
Who is indexed universal life (iul) best for?
- Tax-advantaged supplemental retirement income
- High earners who max out 401(k) and IRA limits
- People wanting growth potential without direct market losses
- Business owners and executives
Pros and cons
Pros
- Growth potential tied to an index
- 0% floor protects against index losses
- Flexible premiums and death benefit
- Tax-free access through policy loans when structured properly
Cons
- Caps and participation rates limit upside
- Fees and cost of insurance reduce returns
- Must be funded and monitored to avoid lapse
- More complex than whole or term
How much does indexed universal life (iul) cost?
IUL premiums are flexible. Policies designed for cash accumulation are typically funded above the minimum. Costs depend on age, health, coverage amount and how the policy is structured.
Why buy through Varis Life?
Varis Life is an independent agency with access to every major carrier and licensed agents in all 50 states. We compare indexed universal life (iul) options side by side so you get the best fit for your health, budget and goals.
Frequently asked questions
Is IUL a good investment?
IUL is life insurance first. It can be a strong tax-advantaged supplement to retirement savings when properly designed and funded, but it is not a replacement for all investing.
Can you lose money in an IUL?
The floor prevents index losses from being credited, but fees and insurance costs still come out, so cash value can decline if the policy is underfunded.
IUL vs 401(k): which is better?
A 401(k) offers employer matches and tax-deferred growth. IUL offers a death benefit, downside protection and tax-free loans. Many people use both.
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