Index Universal Life Insurance (IUL)
life insuranceA type of permanent life insurance that combines flexible premiums and a death benefit with cash value growth tied to a stock market index (like the S&P 500). IUL offers upside potential with downside protection — your cash value earns interest when the index rises and is protected when it falls.
Example
A 45-year-old buys an IUL policy with a $250,000 death benefit. In years the S&P 500 rises 15%, their cash value credits at the cap rate of 12%. In years the market drops 20%, their cash value earns 0% rather than losing money.
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