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Retirement Planning

Understanding indexed universal life insurance and the benefits

Explore some benefits of indexed universal life insurance.

Sales of indexed universal life (IUL) insurance in 2021 accounted for a quarter of all individual life premiums, according to LIMRA.One of the key reasons for this uptick in popularity has likely been the IUL's ability to build cash value that can be used to help provide supplemental income for retirement - a topic that's on the mind of most Americans these days.

Thinking about using IUL insurance to help meet your future financial needs? Here are some key benefits to consider:

The potential for greater cash value growth compared to other UL products

An IUL's potential cash value accumulation is based on one or more stock market indices. When the market does well, so does your cash value (typically subject to a cap). Over the life of your policy, this could mean greater cash value growth over time.

Protection from declining cash value

One of the key advantages of an IUL insurance policy is its ability to provide the policyholder with cash value protection that despite what the index does, won't result in a decline of the policy's cash value. Of course, growth on your policy could be as low as zero percent (this is the indexed account's floor rate), but nonetheless, you're guaranteed not to lose your cash value due to decreases in the index.

Tax-free policy loans

When you retire, it's important to maximize your assets so that they last as long as you need them to. For this reason, most Americans are looking to put as much as they can into their pockets, and less into Uncle Sam's. Policy loans from your IUL insurance policy can create a tax-free way for you to access your cash value in retirement. However, it's important to note that outstanding policy loans will reduce the death benefit payable to your beneficiaries.

Learn more about indexed universal life insurance and how it works.

NOTE: An indexed universal life insurance policy is not an investment in an index, is not a security or stock market investment and does not participate in any stock or equity investments.

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*As long as required premium payments are timely made.


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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

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