Indexed Universal Life
Life insurance that matters while you're alive.
Permanent coverage with a cash value account that credits interest based on a market index, with a floor that protects it from index losses.1 If you get seriously ill, living benefits let you use part of it while you're here.
- ✓ Living benefits if you're diagnosed with a serious illness (varies by carrier)2
- ✓ Cash value you can borrow against — college, a slow year3
- ✓ Not a replacement for your 401(k) or IRA — it works alongside them
Indexed Universal Life is insurance, not an investment. Subject to underwriting. Living benefits vary by carrier. Policy charges and loans reduce cash value.
15 minutes
on the phone with a licensed Minnesota agent
60 seconds
to start — an agent reaches out
$0
obligation, ever
Good fit if…
You've got room in the budget after your retirement accounts, or you're self-employed with no employer benefits, and you want protection plus cash value.
What it isn't
It's insurance, not an investment. Policy charges and loans reduce cash value, and it isn't the right fit for everyone — that's what the call is for.
The call
15 minutes with a licensed Minnesota agent. We look at what you're already funding and whether IUL, term, or nothing new is the honest answer.
How it fits a life
Permanent coverage, not a countdown.
Indexed Universal Life is permanent life insurance — it isn't built to expire at the end of a term. Coverage is subject to underwriting.
The cash value is credited, not invested.
Part of your premium pays the cost of insurance and policy charges. What's left goes into the cash value account, which is credited interest based on a market index's movement — you don't own the index and you don't receive its dividends.
It can matter while you're alive.
If you're diagnosed with a serious illness, living benefits let you use part of the policy while you're here — availability varies by carrier. You can also borrow against cash value, though loan interest accrues and any unpaid balance is subtracted from what your family receives.
Who it actually suits.
You've got room in the budget after your retirement accounts, or you're self-employed with no employer benefits, and you want protection plus cash value. It's insurance, not an investment, and it isn't a replacement for your 401(k) or IRA — it works alongside them.
How it actually works
Your premium is split. Part pays the cost of insurance and policy charges. What's left goes into the cash value account. In the early years, charges eat a large share — this is why IUL is a long-horizon product and why surrendering early usually means a loss.
The cash value is credited, not invested. It tracks an index like the S&P 500, but you don't own the index and you don't receive its dividends. You're credited interest based on the index's movement.
There's a floor. Typically 0%. In a year the index falls, your cash value isn't reduced by that fall. Policy charges still apply, so a 0% credited year is not a flat year.
There's also a cap. If the index returns 20% and your cap is 9%, you're credited 9%. Some policies use a participation rate instead, crediting a percentage of the index gain. This is the trade you're making for the floor.
Caps can change. The carrier can adjust caps and participation rates on most policies. An illustration showing decades of returns at today's cap is a projection, not a promise.
Loans reduce the death benefit. You can borrow against cash value, and that money isn't taxed as income. But loan interest accrues, and any unpaid balance is subtracted from what your family receives.
When this is the wrong fit
We'd rather tell you now than sell you a policy you cancel in year three. IUL is a poor fit if:
- You haven't captured your full employer 401(k) match yet. That match is an immediate, guaranteed return. Take it first.
- You need the largest possible death benefit per dollar right now. Term buys several times the coverage for the same premium.
- Your budget is tight or your income is irregular. Underfunding an IUL is the single most common way these policies fail — the charges keep coming, the cash value drains, and the policy lapses.
- You're looking for market returns. The floor is paid for with the cap. If you want the index's full upside, buy the index.
- You don't actually need life insurance. If nobody depends on your income and you have no estate liquidity problem, the tax treatment isn't a reason to buy one.
If any of these describe you, say so on the call. We'll tell you the same thing there.
Not sure which of those you are?
Fifteen minutes with a licensed agent and you'll know. If it's not a fit, we'll say so.
Questions, answered straight
A licensed Minnesota agent, at a time you pick.