IUL — Index Universal Life

An IUL credits interest based on the performance of a market index, subject to a cap and a floor. When the index is up, you may receive credited interest up to the cap; when it is down, the floor limits or prevents losses to the cash value. The policy does not invest directly in the index.

IUL policies typically include a floor (often 0%) that protects the cash value from direct index losses. Guarantees are backed by the claims-paying ability of the issuing insurance company — not the market.

No. Indexed products are not securities and do not directly participate in any stock or equity investment. IUL is life insurance with a cash-value component; growth is tied to index performance through the carrier's crediting method, not direct market ownership.

Cash value grows tax-deferred, and policy loans and withdrawals may be accessed on a tax-advantaged basis under current law. Tax treatment depends on your circumstances — I coordinate with your tax advisor rather than giving tax advice.

A cap is the maximum indexed interest credited in a period; a participation rate is the percentage of index gain credited. These vary by carrier and product. I compare them across options so you understand exactly what you are buying.

An IUL can offer a level or an increasing death benefit, and the death benefit can be affected by policy loans, withdrawals, and the cost of insurance as you age. We design the policy so the coverage you intend stays in force, and I review it with you over time.

Overfunding can accelerate cash-value growth but must stay within limits to keep the policy classified as life insurance; underfunding risks a lapse. I help you fund the policy in a way that matches your goals and keeps the coverage in force — and we adjust as circumstances change.

Whole life offers guaranteed growth and level premiums; an IUL ties cash-value crediting to an index with a cap and floor, so it may grow more in some periods and less in others. Neither is universally better — I compare both against your goals so you can choose with clarity.

IUL policies include cost of insurance, policy charges, and sometimes surrender charges — and caps and participation rates effectively shape what is credited. I lay out the costs and the crediting method in plain language and compare them across carriers so there are no surprises.