Indexed Universal Life (IUL)
Permanent life insurance with cash value tied to a stock index, with caps and floors — often oversold.
Full explanation
Indexed Universal Life (IUL) is a permanent life insurance product with cash value linked to an equity index (typically S&P 500) with a cap rate (typically 8-12% in 2026) and floor (typically 0%, sometimes 1%). It's marketed as 'stock market upside without the downside risk.' Reality: index credits exclude dividends (~30% of S&P 500 long-run total return), cap rates can be lowered by the carrier mid-policy, surrender charges last 10-15 years, and policy fees can eat early-year cash value. Net long-term performance frequently underperforms a 'buy term and invest the difference in a low-cost index fund' alternative for most consumers.
Need help with Indexed Universal Life (IUL)? Call 256-800-4885 for free guidance from a licensed insurance agent in our nationwide network.