What Is Index Universal Life Insurance, or IUL?

Universal life insurance (UL) comes in different ways and is offered as different models, where you select various equity accounts to invest in. An indexed universal life (IUL), allows the owner to allocate cash value amounts to an equity index account or a fixed account. These policies offer a variety of indexes. These accounts are also more volatile than fixed ULs, but they are less risky than variable universal life policies because no money is actually being invested in equity positions.

An IUL is a type of policy that derives from universal life insurance. Like universal life insurance, indexed life insurance allows you to adjust your premium payments, if at any point in your life your financial circumstances change. You can adjust how often you make payments and your death benefit as well. Indexed universal life insurance policies are a viable option for people looking for the security of a fixed universal policy with the interest-yielding potential of a variable policy.

An IUL policy offers nontaxable cash accumulation options for your retirement while keeping a death benefit. To make it simpler, IUL policies give you permanent life insurance protection while helping you accumulate cash for the future that very well may be tax-exempt.