Indexed Universal Life

Coverage at a glance

Indexed universal life is permanent life insurance that pairs a death benefit with a cash value account. The cash value earns interest credited from the performance of a market index, such as a broad stock index, without being directly invested in the market. A floor protects the cash value from losses when the index declines, while a cap or participation rate limits the amount of interest credited in strong years.

Premiums are flexible within the limits of the policy, and the cash value grows on a tax deferred basis. It may be accessed through policy loans or withdrawals, which reduce the death benefit and the cash value if they are not repaid. Policy charges continue to apply each year regardless of index performance, and caps, floors, participation rates and riders vary by carrier and by product.

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Who it is designed for

Indexed universal life is designed for people who want lifelong protection for their families along with the potential to build cash value that may supplement retirement income. It is often considered by established professionals, business owners and families who have already funded their employer retirement plans and would like an additional tax advantaged resource.

How the plan works

Each premium you pay, after policy charges, is added to the cash value, which you may allocate between a fixed account and index accounts. At the end of each crediting period, interest is credited based on the index performance, never less than the floor and never more than the cap. Over time, this structure is designed to capture a portion of market growth while protecting the account from market losses.

Because indexed universal life is a long term strategy, careful design and consistent funding are essential to keeping the policy in force as intended. We illustrate how the policy may perform under a range of assumptions, explain every charge and feature clearly and review the policy with you regularly so that it stays aligned with your goals.

How interest is credited

CapFloor
  • Market index
  • Your credited interest
  • Cap
  • Floor
Interest is credited from index gains up to a cap, and a floor protects the cash value in down years.Illustration only. Actual results depend on the policy and carrier.

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