Index Universal Life Insurance (IUL): Protection + Growth

Flexible Premiums & Death Benefit: Adjust payments within policy limits as life changes; choose level (Option A) or increasing (Option B) death benefit.
Index Crediting with Floor: Earn interest based on a market index (e.g., S&P 500®) with a floor (often 0–1%) and caps/participation rates that vary by policy.
Fixed Account Access: Allocate part of your cash value to a fixed interest account for stability.
Optional Riders: Accelerated death benefit (commonly included), chronic illness/long-term care, waiver of premium—availability varies.
Costs & Charges: Includes cost of insurance, administrative fees, and possible surrender charges; cash value and growth are not guaranteed and may vary with policy performance.

Multiple Strategies: Allocate cash value across fixed and index accounts, including annual point-to-point or multi-index blends.
Caps & Participation Rates: Set by the carrier and subject to change; limit upside while providing a floor to protect against negative index returns.
Tax-Advantaged Growth: Cash value grows tax-deferred; tax-free access may be available through withdrawals up to basis and policy loans, as long as the policy remains in force and avoids MEC status.
Adjustability: Flexible premiums and the option to switch death benefit types (subject to policy rules) as your needs change.
Optional Riders: Overloan protection (if available), guaranteed insurability, accidental death benefit.

Funding Strategy: Pay higher premiums (within policy limits) to build cash value while monitoring to avoid MEC status.
Accessing Value: Withdraw basis first, then use policy loans to generate tax-advantaged income—policy must remain in force to preserve benefits.
Loan Types: Standard and indexed/participating loans are available; rates and features vary and can impact growth.
Longevity Protection: Overloan protection riders (if available) and careful loan-to-value limits help reduce lapse risk.
Sequence Risk Management: Early poor returns may affect income planning; diversify allocations and review annually.

Key Details
Policy Focus: Overfund up to guideline/7-pay/MEC limits to build cash value, not just death benefit.
Accessing Cash Value: Withdrawals typically come from basis first, then policy loans; policy must remain in force to preserve tax advantages.
Purpose: Provides lifetime coverage with flexible cash value that can support future goals such as retirement, education, or legacy planning.
Growth Mechanics: Cash value earns interest based on a market index (no direct investment). Caps, participation rates, and floors apply.
Premium Flexibility: Payments can be adjusted within policy limits. Underfunding or skipping premiums may cause underperformance or lapse.
Charges & Risks: Cost of insurance rises with age; caps and participation rates can change within contractual limits. Poor funding combined with loans can reduce policy performance. Annual monitoring is recommended.
Funding Strategy: Many clients “max-fund” up to guideline/7-pay limits to prioritize cash value growth and minimize insurance drag.
Accessing Cash: Typically through withdrawals to basis first, then loans (fixed or indexed). Interest applies; consider overloan protection if available.
Taxes: Cash value grows tax-deferred; loans are generally tax-free if the policy remains in force and avoids MEC status. MEC distributions are taxable and may incur penalties. Consult a tax professional.
Suitability: Best for 10+ year horizons with consistent funding and periodic reviews. Designed for long-term protection with an accumulation feature—not as a short-term savings vehicle.
Optional Riders: Chronic/critical illness, waiver of charges, overloan protection, term riders, and more; availability varies by carrier and state.
Important Note: IUL is life insurance, not an investment. Returns depend on crediting methods, caps/participation rates, and policy charges.

Next Steps:
Define objectives: protection, accumulation, or executive benefits; determine your time horizon.
Run an IDR IUL illustration with realistic assumptions; test premiums, caps/participation rates, and loan scenarios.
Choose a funding strategy (avoid MEC), select riders, and schedule regular policy reviews.
Assign ownership and beneficiaries (consider trusts for minors or estate planning) and set annual check-ins.

Key Details
Policy Design: Plan for steady funding; consider increasing the death benefit early and leveling it later to manage costs effectively.
Loan Management: Understand fixed and indexed loan options and use overloan protection when available.
Purpose: Provides lifetime coverage with flexible cash value to support long-term goals like retirement, college funding, or legacy planning.
Growth Mechanics: Cash value grows based on a market index (no direct market investment). Caps, participation rates, and floors apply.
Premium Flexibility: Payments can be adjusted within policy limits. Underfunding or skipping premiums may reduce performance or risk lapse.
Charges & Risks: Cost of insurance rises with age; caps and participation rates may change within contractual limits. Poor funding combined with loans can impact policy performance—annual monitoring is recommended.
Funding Strategy: Many clients “max-fund” up to guideline/7-pay limits to maximize cash value growth and minimize insurance drag.
Accessing Cash Value: Typically through withdrawals to basis first, then policy loans (fixed or indexed). Interest applies; overloan protection is recommended if available.
Tax Advantages: Cash value grows tax-deferred; loans are generally tax-free if the policy remains in force and is not a MEC. MEC distributions are taxable and may incur penalties. Consult a tax professional.
Suitability: Best for a 10+ year horizon with consistent funding and regular reviews. IDR IUL is designed for long-term protection and accumulation—not short-term savings.
Optional Riders: Chronic/critical illness, waiver of charges, overloan protection, term riders, and more—availability varies by carrier/state.
Important Note: IUL is life insurance, not an investment. Returns depend on crediting methods, caps/participation rates, and policy charges.

Next Steps:
Clarify objectives: protection, accumulation, or executive benefits, and define your time horizon.
Run an IDR IUL illustration with realistic assumptions; evaluate premiums, caps/participation rates, and loan scenarios.
Choose a funding strategy (aim to avoid MEC), select riders, and schedule regular policy reviews.
Assign ownership and beneficiaries (consider trusts for minors or estate planning) and plan annual check-ins.

Key Details
Policy Structure: Properly set ownership and beneficiaries (entity vs. individual) to align with compensation or retention strategies.
Purpose: Provides lifetime coverage with flexible cash value to support long-term goals, including retirement, college funding, or legacy planning. IUL is especially effective for retention and accumulation; for pure death-benefit needs, consider term or guaranteed UL alternatives.
Growth Mechanics: Cash value grows based on a market index (no direct market investment). Caps, participation rates, and floors apply.
Premium Flexibility: Payments can be adjusted within policy limits. Underfunding or skipped premiums may reduce performance or risk lapse.
Charges & Risks: Cost of insurance increases with age; carriers can adjust caps and participation rates within contractual limits. Poor funding combined with loans can negatively affect policy performance—annual monitoring is recommended.
Funding Strategy: Many clients “max-fund” up to guideline/7-pay limits to prioritize cash value growth and reduce insurance drag.
Accessing Cash Value: Withdrawals typically come from basis first, then policy loans (fixed or indexed). Interest applies; overloan protection is recommended if available.
Tax Advantages: Cash value grows tax-deferred; loans are generally tax-free if the policy remains in force and avoids MEC status. MEC distributions are taxable and may trigger penalties—consult a tax professional.
Suitability: Best for a 10+ year horizon with consistent funding and periodic reviews. IDR IUL is designed for long-term protection with an accumulation feature—not a short-term savings vehicle.
Optional Riders: Chronic/critical illness, waiver of charges, overloan protection, term riders, and more. Availability varies by carrier/state.
Important Note: IUL is life insurance, not an investment. Returns depend on crediting methods, caps/participation rates, and policy charges.

Next Steps:
Define objectives: protection, accumulation, or executive benefits; determine your time horizon.
Run an IDR IUL illustration with realistic assumptions; evaluate premiums, caps/participation rates, and loan scenarios.
Select a funding strategy (aim to avoid MEC), choose riders, and schedule regular policy reviews.
Set ownership and beneficiaries (consider trusts for minors or estate planning) and plan annual check-ins.

Key Details
Policy Features:
Chronic or critical illness riders may allow you to access benefits while living; availability and features vary by carrier/state.
Consider trusts or ownership structures if minors or estate taxes are a concern; review annually.
Purpose: Provides lifetime coverage with flexible cash value that can support long-term goals such as retirement, college funding, or legacy planning.
Growth Mechanics: Cash value grows based on a market index (no direct market investment). Caps, participation rates, and floors apply.
Premium Flexibility: Payments can be adjusted within policy limits. Underfunding or skipping premiums may reduce performance or risk lapse.
Charges & Risks: Cost of insurance increases with age; carriers may adjust caps/participation rates within contractual limits. Poor funding combined with loans can negatively affect policy performance—annual monitoring is recommended.
Funding Strategy: Many clients “max-fund” up to guideline/7-pay limits to maximize cash value growth and reduce insurance drag.
Accessing Cash Value: Withdrawals typically come from basis first, then policy loans (fixed or indexed). Interest applies; overloan protection is recommended if available.
Tax Advantages: Cash value grows tax-deferred; policy loans are generally tax-free if the policy remains in force and avoids MEC status. MEC distributions are taxable and may trigger penalties. Consult a tax professional.
Suitability: Best for a 10+ year horizon with consistent funding and regular reviews. IDR IUL is designed for long-term protection with an accumulation feature—not short-term savings.
Optional Riders: Chronic/critical illness, waiver of charges, overloan protection, term riders, and more. Availability varies by carrier/state.
Important Note: IUL is life insurance, not an investment. Returns depend on crediting methods, caps/participation rates, and policy charges.

Next Steps:
Clarify objectives: protection, accumulation, or executive benefits; define your time horizon.
Run an IDR IUL illustration with realistic assumptions; evaluate premiums, caps/participation rates, and loan scenarios.
Select a funding strategy (aim to avoid MEC), choose riders, and schedule regular policy reviews.
Assign ownership and beneficiaries (consider trusts for minors or estate planning) and plan annual check-ins.