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Indexed universal life (IUL)

Permanent life insurance with cash value tied to a market index

Indexed universal life is a kind of permanent life insurance. It is built to last your whole life as long as it stays funded, and it builds cash value you can borrow against.

Part of that cash value earns interest based on a market index. A floor means a bad year in the index does not reduce the interest credited, and a cap limits how much can be credited in a good year. Policy fees and the cost of insurance still come out of the cash value, so how the policy is funded matters.

Who needs it

  • People who want coverage for life, not for a set number of years
  • Business owners using life insurance to fund a buy-sell agreement or protect against losing a key person
  • Anyone comparing permanent coverage with term life

Questions worth asking

  • How does IUL compare with term life for my situation?
  • What premium keeps this policy in force for life?
  • Which index does the cash value follow, and what are the cap and floor?
  • How could I use the cash value later on?

Worth knowing

The mistake people make: underfunding the policy. A permanent policy only lasts if it is paid for the way it was designed, so the premium needs to fit your budget for the long run.

IUL specialists in the Village

60 verified agents. You pick one, and only that agent contacts you.

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Where the Village can write IUL

51 states covered so far. Pick yours to see who can actually write there.