Indexed Universal Life insurance, or IUL, is a type of permanent life insurance. Like all permanent policies, it provides a death benefit that lasts your whole life as long as the policy stays funded. What makes an IUL distinct is how its cash value grows: it's credited based on the performance of a market index (such as the S&P 500), subject to a cap, while a 0% floor protects it from market losses.
How an IUL differs from other life insurance
Term life covers you for a set number of years and builds no cash value. Whole life is permanent with guaranteed, fixed cash-value growth. An IUL sits between them — permanent coverage with growth potential tied to an index, plus downside protection. You trade some of whole life's predictability for more upside potential.
The 0% floor and the cap
In years the index rises, your cash value is credited up to a cap set by the insurer. In years the index falls, the 0% floor means your credited interest is zero — you don't lose cash value to market declines, though policy charges still apply.
Why people use an IUL
Used correctly, an IUL can provide tax-deferred cash-value growth and income-tax-free access to that cash value through policy loans under current tax law — a tool for tax-advantaged retirement income, principal protection, and a legacy for your family. It anchors several pillars of The SHIELD Protocol.
Is an IUL an investment? +
No. An IUL is a life insurance policy, not a security or an investment. Your cash value is credited based on an index's performance but is never directly invested in the market, and it's protected by a 0% floor.
Can you lose money in an IUL? +
Market declines won't reduce your credited interest below 0%, but policy charges and fees still apply and can reduce cash value — especially in early years or if the policy is underfunded. Proper structuring matters.
Who is an IUL best for? +
People who want permanent coverage plus tax-advantaged cash-value growth and have the cash flow to fund the policy consistently over time. A suitability review is the best way to know.