What is an Indexed Universal Life Insurance Policy?

With the stock market’s continuous up’s and down’s, and interest rates still sitting at near historical lows, there are many clients who are wondering how they are going to supplement their retirement income sources.

An IUL or Indexed Universal Life Insurance Policy may be that product to help!  This product fills the niche between too risky and too fixed.  This IUL is the middle ground when it comes to these types of products.

While an IUL provides many of the same protections as other Life Insurance policies, these can also provide more flexibility along with some additional advantages.

Here are some of the benefits associated with an IUL policy:

  • Tax deferred growth of cash value
  • Additional growth potential
  • Protection of principal
  • No minimum age requirements to participate

Considerations to think about before purchasing one of these policies

  • Consider factors that will help narrow down who might be a good fit for an IUL policy
  • These plans typically work better with larger face amounts
  • Cash will not grow on an infinite basis
  • Insurers typically place a cap on the amount of participation that policy holder can partake in.

The bottom line on IUL policies

This product might not be ideal for all clients, but they do provide flexibility and death benefit protection, while also taking advantage of market growth.  So while these might not be a good consideration for everyone, they could be a nice option for those seeking the growth potential of variable life product, but the security that comes with a fixed UL policy.  This could also add an alternative way to supplement income during those retirement years.


Information gathered from RBC, New York Life and Lincoln Financial.

This is for information only and is not an offer to sell, or a solicitation of an offer to buy the securities or instruments mentioned. The information has been obtained or derived from sources believed by us to be reliable, but we do not represent that it is accurate or complete. Any opinions or estimates contained in its information constitute our judgment as of this date and are subject to change without notice. Carter, Terry & Co., Inc., or its affiliates may provide advice or may from time to time acquire, hold or sell a position in the securities mentioned herein. Past performance is not indicative of the future performance.