Indexed universal life
Permanent protection. Flexible funding.
Life insurance with index-linked interest crediting. Charges apply, and sufficient funding is needed to keep coverage.
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Availability and underwriting vary by state and carrier, and the carrier illustration is reviewed as part of the process before a policy is purchased or issued. Comparing options does not guarantee coverage.
Interest in. Charges out.
Interest credit
Interest is credited under the policy’s rules
Concept only. No growth or policy value is projected.
Index-linked interest can add to policy value
Caps, participation rates and crediting rules limit the interest credited.
Read the video transcript and visual explanation
An index floor does not mean your policy value cannot fall. Here is a simplified example, using made-up amounts to explain the math. Imagine a period starts with one thousand dollars of policy value. It earns no interest credit. Then thirty dollars in policy charges come out. That leaves nine hundred seventy dollars. This is not a quote or projection. Premiums, interest credits, charges and loans all affect the real policy. Compare guaranteed values with the illustrated assumptions, and what it takes to keep coverage active. Explore indexed universal life with MedaSynq.
Hypothetical arithmetic: $1,000 of starting policy value plus $0 interest credit, less $30 in charges, leaves $970. These are made-up amounts, not a quote, actual charge schedule or performance projection. Other transactions are excluded. A second diagram shows premiums and interest credits going into policy value, with charges and loans coming out. Compare guaranteed values with illustrated assumptions and the funding needed to keep coverage active.
An IUL may fit when...
- You want a permanent death benefit rather than coverage for a set term
- You can fund the policy consistently over a long horizon
- You want premium flexibility within the limits of the contract
- You are comfortable that caps, floors, and charges are set by the carrier and shown in the illustration
Mainly need the largest death benefit for the lowest premium? Term life usually serves that better.
Compare term life options onlineFrom comparison to application
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Review policy features and illustrations.
Apply when ready
The insurer reviews your application.
Quotes are estimates. Applying does not start coverage.
What happens after I apply?
Choose an option and complete the carrier application. The insurer may request records or a medical exam.
The carrier illustration shows payments, benefits and policy values over time. Separate guaranteed values from assumptions.
A quote is an estimate, not an offer of coverage. What you are offered, and the final price, depend on underwriting, the insurer's review. Confirm the effective date and payment requirements with the insurer.
What the floor and the cap actually do
In a down period, the index falls but the interest credited for that period stops at the contract floor instead of going negative. Policy charges are still deducted, so value can still decrease.
In a strong period, crediting stops at the cap or participation limit the carrier sets. You are not invested in the index and do not receive its dividends.
Illustrative mechanism only. This diagram shows no rate, cap, floor, value, or performance of any index, carrier, product, or policy. Caps, floors, and participation rates vary by carrier and can change within contract limits. Policy charges apply in all years. The only numbers to rely on are in a carrier illustration.
Read both illustration columns
- Guaranteed
- Values based on the contract’s guarantees.
- Non-guaranteed
- Assumptions, not predictions. Actual results will differ.
Your age, health, funding and policy design matter. Review the carrier illustration with a licensed advisor.
Compare options & applyNo cost, no obligation. Review it before any decision.
Protection, flexibility and ongoing costs
Death benefit first
Life insurance for your beneficiary, not an investment.
Flexible premiums
Insufficient funding can cause the policy to lapse.
Index-linked crediting
Carrier limits apply. You do not own the index.
Policy charges
Charges can reduce cash value even when index crediting has a floor.
Read the policy details
- Death benefit first
- The reason to own an IUL is the death benefit it pays your family. Everything else in the contract sits underneath that.
- Flexible premiums
- Within the limits set by the contract, the premium can be adjusted over time. Underfunding a policy has consequences, and your advisor will walk through them.
- Index-linked crediting
- Interest is credited with reference to an index rather than paid at a fixed rate, subject to a floor and a cap that the carrier sets. You are not invested in the index and you do not own shares.
- Policy charges
- Cost of insurance and policy charges are deducted from the policy. They belong in the conversation from the start, not in a footnote.
IUL is a life insurance product, not an investment; policy charges and caps apply. Your carrier illustration and policy contract govern.
Common questions
What to understand before you apply
Is an IUL an investment?
No. An indexed universal life policy is life insurance. Its primary purpose is the death benefit paid to your beneficiary. It is not a security, it is not a savings account, and money in the policy is subject to policy charges and the terms of the contract.
How is interest credited?
Interest is credited with reference to the performance of an index, subject to a floor and a cap or participation rate set by the carrier. You are not invested in the index and do not receive index dividends. The carrier can change caps and participation rates within the limits stated in the contract.
What does the floor actually do?
A zero percent floor means the index-linked interest credited for that period cannot be negative. It does not mean your cash value cannot fall: policy charges and loans can still reduce it. Check the floor, limits on interest and charges in the carrier illustration and policy before choosing.
What is an illustration, and can I rely on the numbers?
An illustration is a required document showing how a policy may perform under assumptions the carrier is permitted to use. Non-guaranteed values are assumptions, not predictions, and actual results will differ. Review the guaranteed columns with a licensed advisor before deciding.
What happens if I stop paying, or pay less?
Policy charges continue to be deducted. If the policy value cannot cover them, the policy can lapse and coverage can end, which may also have tax consequences. Funding level is central to whether an IUL performs as intended, so discuss it before you apply.
What are the charges?
IUL policies carry costs that may include cost of insurance, administrative charges, premium loads, and surrender charges in the early years. These are disclosed in the illustration and the policy, and they vary by carrier and product.
Who is an IUL usually not right for?
Someone whose main need is the largest death benefit for the lowest premium is usually better served by term life. IUL generally suits a longer time horizon and consistent funding. If you are unsure, compare it against term before deciding.
Review the illustration before you choose.
Start online. Review guaranteed and non-guaranteed values in the carrier illustration with a licensed agent before a policy is issued.
Compare options & applyWould rather have the illustration explained first? Call (877) 346-6657.
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