The Bottom Line Indexed universal life (IUL) insurance is a form of permanent life insurance that offers a cash value component along with a death benefit. The money in the cash value account can earn interest through tracking an equity index selected by the insurer, and can also usually be partially allocated to a fixed-rate account. However, Indexed universal life policies cap how much money you can accumulate, often at less than 100%, and they are based on a possibly volatile equity index. Beyond the death benefit offered by an IUL policy, these shouldn't be considered optimum retirement savings vehicles. A 401(k) is a better option for that purpose because it doesn't carry the high fees and premiums of an IUL policy, plus there is no cap on the amount you may earn when invested. Most IUL policies are best for high-net-worth individuals seeking to lower their taxable income. Investopedia does not provide tax, investment, or financial services and advice. The information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Choosing between life insurance policies can be confusing, but knowing what to look for can help. Guaranteed whole life insurance is a type of permanent life insurance coverage designed to help provide protection for your family. With United of Omaha Life Insurance Company, a Mutual of Omaha company, there are no medical exams, and benefits are never reduced because of age or health. Learn more about guaranteed whole life insurance and get your quote.
Prepare for Your Family’s Future
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