Understanding Indexed Universal Life Insurance

Indexed Universal Life (IUL) ties cash value growth to a market index like the S&P 500 or TSX, offering upside potential with downside protection through a guaranteed floor rate. It combines permanent coverage flexibility with market-linked returns capped at a maximum rate.

How Indexed Returns Work

Index Return	Floor (0%)	Cap (10%)	Your Credit
-15%	Applied	-	0%
+5%	-	-	5%
+12%	-	Applied	10%
+25%	-	Applied	10%

Example with 0% floor and 10% cap. Actual rates vary by insurer and product.

Key Benefits

Downside Protection

Floor rate protects against market losses in your cash value

Upside Potential

Participate in market gains up to the cap rate

Tax-Deferred Growth

Cash value grows without annual taxation

Flexible Premiums

Adjust payments based on financial situation

Important Considerations

Caps and Participation Rates Can Change

Insurers can adjust cap rates, participation rates, and spreads over time. The returns illustrated at purchase may not reflect actual future performance. Review policy terms carefully.