Indexed universal life insurance
Permanent coverage with flexible premiums, where the cash value is credited using a formula tied to the performance of a market index — subject to caps, participation rates, a floor, and the policy's own charges.
What it is built for
An IUL is a universal life policy. The death benefit and the cost of insurance work the way they do in any universal life contract; what is distinctive is how interest is credited to the cash value. Rather than a declared rate, the carrier applies a formula based on the movement of an index over a segment period.
Your money is not invested in the index and does not receive dividends from it. Gains are limited by a cap or a participation rate, and losses are limited by a floor — typically zero percent. Policy charges are deducted regardless of how the index performs.
Often a fit when
- Permanent coverage is the goal and premium flexibility is genuinely valuable
- There is an appetite to understand a more complex product rather than a simple one
- The policy is being funded consistently and reviewed regularly, not bought and forgotten
- Term or whole life have already been considered and ruled out for a reason
What to look at closely
- An illustration is not a promise. Any non-guaranteed values shown are projections based on assumptions the carrier is free to change, and are not estimates of amounts that will actually be paid.
- Look at the guaranteed columns. Every illustration has one. It shows what happens if the carrier exercises its rights at the maximum charges and the minimum credits.
- Caps and participation rates are usually not guaranteed for life. Ask what the carrier can change and how often.
- Underfunding is the common failure mode. Flexible premiums mean the policy can lapse if it is not funded adequately as the cost of insurance rises with age.
- Fees and charges. Premium loads, per-unit charges, cost of insurance, and rider costs all come out of the policy.
How we talk about indexed universal life. An IUL is a life insurance policy. It is not a savings account, a retirement account, an investment, or a pension. Any values in a carrier illustration that are not guaranteed are exactly that — not guaranteed, not estimates of amounts to be paid in the future, and subject to change. We will always show you the guaranteed elements alongside anything else, and we will tell you plainly when a simpler product would serve you better.
Maxivita Insurance LLC does not provide tax, legal, or investment advice. Talk to your own tax advisor about how any policy fits your situation.
Compare with
If this is not quite the right shape for what you are protecting, one of these probably is.
- Term life — The cheapest way to cover a fixed window — a mortgage, or the years until the children are grown. It expires, and it builds no cash value.
- Final expense — A small permanent policy sized to a funeral rather than to an income. Easier to qualify for with health history, and it does not expire.
- Whole life — Costs more per dollar of death benefit than term, but the premium is fixed for life and the coverage never ends.
- Annuities — Not life insurance — it converts savings into income you cannot outlive. It solves the opposite problem: living a long time rather than dying too soon.
This policy has exclusions, limitations, and terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, call or write your insurance agent or the company.
Availability, features, and pricing vary by carrier, product, state, age, and underwriting. The description above is a general summary of a type of coverage, not a description of any particular policy. Ask your agent for the issuing carrier's own materials before you apply.
See what this looks like for your situation.
A licensed agent can price it against your age, state, and health history — and tell you if a different product fits better.