What is indexed universal life (IUL) insurance? | F&G

Life insurance is an agreement where you pay a premium to an insurance carrier. When you pass away, your beneficiaries get a payment called a death benefit. 

At the core, that’s true of all life insurance. But today’s life insurance marketplace offers a range of products with features, benefits and costs that are all a little different. Life insurance policies come in several different types:

• Term life insurance is coverage that provides a death benefit for a specific period, typically at a lower cost, but has no cash value and expires at the end of the term. Once the term expires you can renew it for a new term, terminate or convert it to premium coverage.
• Whole life insurance is a permanent life insurance policy that provides lifelong coverage, with fixed premiums and a cash value that grows at a guaranteed rate.
• Indexed universal life (IUL) insurance is a permanent life insurance policy that provides lifelong coverage with flexible premiums, and a cash value that can grow through index crediting.

Beyond death benefits: IUL policies serve multiple purposes

An indexed universal life policy is versatile enough to meet several financial needs. It can help protect your loved ones after you pass away. You have the flexibility to adjust your premium payments and death benefit amount over time, to suit your needs at different stages of life.

Since they offer flexibility, IULs can also help you prepare for the unexpected in life. Many policies offer living benefits riders which allow you to access your death benefit early, while you are still alive. Living benefits can be critical for meeting your family’s financial needs if you ever have a qualifying disability or illness. 

IULs are also a savings tool that can help you build prosperity in life and retirement. The cash value of an IUL policy can earn interest based on the performance of a market-linked index, like the S&P 500^®, growing the value of your policy as the market grows. But because your money isn’t actually invested in the stock market, you won't lose money if the market goes down.

This is why IULs aren’t just for the main money earner in a family – they can be good ways to save money for children and stay-at-home parents as well.

Is an IUL right for you?

Choosing an IUL depends on your goals and your family’s financial needs. A financial professional can help you figure out what is best for you, considering:

• What you want to achieve with your money
• Other savings or insurance policies you already have
• Your family’s immediate and long-term financial needs

Fees, costs and interest caps may apply, so be sure to read and understand your policy carefully so you know what to expect.

Find a financial professional to see if indexed universal life is the right choice for you.