Indexed Universal Life Insurance
Indexed universal life combines lifelong coverage with the potential to build cash value.
Premiums are flexible, the death benefit can be adjusted, and cash value credits interest based on an external index under contract rules.
Principal in the policy’s cash value is not invested directly in the market. Guarantees depend on the insurer’s claims-paying ability.
How Indexed Universal Life (IUL) Insurance Works
Your premium pays policy charges and the cost of insurance, and the remainder goes to cash value. You can allocate cash value to a fixed account and to one or more index strategies.
Each strategy follows contract rules such as caps, participation rates, spreads, and a floor that is often zero. Interest is credited at the end of each segment period.
Growth Without Direct Market Exposure
IUL tracks index change to determine interest, but it does not own index funds or stocks. Floors help protect credited interest from negative index years, while caps or participation rates limit upside.
Results vary by carrier, crediting method, and renewal terms. We compare designs side by side so you know how each strategy may behave over time.
Flexibility You Can Shape
Shape the policy around your goals today and revise it as life evolves. You decide how to fund it, how benefits are set, and when to tap cash value.
Premiums
Pay more, less, or skip within contract limits as life changes.
Death Benefit
Choose level or increasing options and adjust within underwriting rules.
Access
Use policy loans or withdrawals, which reduce cash value and death benefit if not repaid.
Riders
Consider features such as no-lapse protection, chronic illness benefits, or income riders if appropriate.
When An Indexed Universal Life Insurance Policy Can Fit
Indexed universal life can fit families who want permanent protection with cash value for future needs.
It also suits business owners funding buy-sell, key person, or executive bonus strategies, clients who have maxed-out retirement plans and want tax-advantaged accumulation inside a life policy, and estate or legacy plans that benefit from flexible premiums and policy design.
Important Considerations
- Policy charges, loans, and withdrawals reduce cash value and the death benefit
- Caps, participation rates, and spreads limit credited interest in strong markets
- Sustaining coverage requires adequate funding, especially if crediting is low
- Carrier renewal practices and financial strength matter to long-term outcomes
- Tax treatment can change; consult your tax professional for guidance
Explore Your IUL Options With Matador
Request a consultation to compare carriers, crediting methods, charges, and riders. We will build a funding plan that keeps coverage in force and aligns with your goals, then review it each year so your policy stays on track.