Indexed Universal Life (IUL) Insurance

Indexed universal life (IUL) insurance is a permanent life insurance policy that provides life insurance coverage, a cash-value account, and an investment portfolio. IUL insurance rates can start as low as $54/mo. However, IUL insurance quotes will vary for each person. Shop around and compare multiple companies to secure the best indexed universal life insurance quotes.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 28, 2021

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The Rundown

  • Indexed universal life insurance is a type of permanent life insurance policy
  • Your life insurance company chooses a stock market index, which influences how your cash value account grows
  • You can get a $250,000 universal life insurance policy for at least $54/mo

Did you know indexed universal life insurance provides an opportunity to invest in the stock market?

Although indexed universal life (IUL) insurance quotes produce more expensive life insurance rates, you’ll have an opportunity to accumulate money over time.

But how does indexed universal life (IUL) insurance work? Don’t worry – we’re here to show you what you should know before buying indexed universal life (IUL) insurance.

Are you ready to shop for indexed universal life (IUL) insurance? Enter your ZIP code in the free online quote tool above to compare multiple companies in your local area.

What is an indexed universal life insurance policy?

Indexed universal life insurance is a permanent life insurance policy that comes with a cash value account. This account accumulates money over time while simultaneously providing life insurance coverage.

Policyholders can receive IUL benefits when the stock market does well. According to Chron, the stock market is a significant financial institution with individuals who exchange, invest and sell digital and physical assets. In addition to accumulating cash from market gains, you won’t see any losses when the market doesn’t do well.

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How does indexed universal life insurance work?

Once you get indexed universal life (IUL) insurance quotes and buy a policy, you’ll start your coverage.

Part of your monthly indexed universal life insurance rates go to life insurance, and the other half goes to the accumulated cash value.

The indexed universal life (IUL) insurance company uses your accumulated cash value to invest in the stock market. Your accumulated cash value increases based on your life insurance company’s performance with investing in the stock market.

Fixed universal life insurance has less risk but fewer options than variable universal life insurance. In other words, there’s a variable interest rate that influences how your accumulated cash value grows. Also, the money you pay per month increases your cash-value account.

How much are indexed universal life (IUL) insurance rates?

Several factors determine whether affordable indexed universal life (IUL) insurance is available to you. Some of the most significant factors are age, gender, health, policy amount, and policy type.

Let’s see how these factors affect a $250,000 universal life insurance policy.

Monthly Payments of Universal Life Insurance Based on $250K Death Benefits
Age of Non-SmokersUniversal Life Insurance Rates for MalesUniversal Life Insurance Rates for Females
25 to 35$63 - $103$54 - $83
35 to 45$103 - $150$83 - $130
45 to 55$150 - $244$130 - $207
55 to 65$244 - $427$207 - $337
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Life insurance rates go up as you get older. Women pay $10 to $40 less than men, and non-smokers pay much less than smokers.

Also, your life insurance company will increase rates if you have a dangerous job or hobby.

Is indexed universal life worth it?

It depends on your overall budget. IUL insurance is a high-risk, high-reward life insurance option. What you’re risking is investing money into a policy that resembles a retirement.

But there are a few drawbacks. Continue reading to learn about the benefits and downsides of indexed universal life insurance.

What are the advantages and disadvantages of indexed universal life insurance?

IUL insurance has a few excellent perks. But, there are some problems with indexed universal life insurance. Let’s explore some pros and cons of IUL insurance.

Indexed Universal Life Insurance Pros & Cons
IUL Insurance ProsIUL Insurance Cons
Accumulated cash doesn't affect social securityLimits on life insurance company gains
Death benefits are intactSeveral fees for other services
Excellent investment flexibilityThere's no guarantee that the company performs well
High return on accumulated cash value
Tax-free gains
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The pros outweigh the cons. However, fees may be a big deal. The best insurance companies may provide better investment strategies, but riders and other charges may leave a bad taste in your mouth regarding IUL insurance.

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Indexed Universal Life (IUL) Insurance: What’s the bottom line?

You can choose between two IUL policies: fixed and variable. A fixed IUL insurance policy has more guarantees than variable IUL insurance.

However, fees, administrative charges, and limits to your account growth may frustrate you. Shop around until you find a life insurance company that offers what you need.

Now that you know more about indexed universal life insurance, enter your ZIP code below to compare free life insurance quotes from multiple companies near you.

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