The premium of the policy gets paid. Part of that money is used for fees, if there are any, while the rest of the money is added as cash value. The total amount of cash value is added with interest based on how well it performs in an equity index.

These are accounts that track major equity indices, like the S&P 500, and NASDAQ 100.

The floor is the guaranteed minimum percentage of interest that a specific account will be making. Indexed accounts usually work with 0%.

Cap is the greatest amount of interest that the insurer credits to the indexed accounts. Depending on the plan you could be looking at an uncapped potential but with a lower participation rate, or you could be working with 100% participation, although your cap would be ranging on the lower percentages.

Yes. Aside from giving you the possibility of adding a cash value growth to your life insurance plan, IULs also possess the death benefits plan.

Death benefit is the amount paid to a beneficiary upon the death of the insured person.

IULs holders do not pay for capital gain tax with their cash value. The only exception is if the holder decides to abandon their IUL before it reaches maturity. Even with withdrawals, the capital gain tax does not apply under current tax codes in the United States.

No. There are no contribution limits associated with indexed universal life insurance.