Permanent life insurance that builds tax-advantaged cash value linked to market indexes — with a 0% floor so you never lose ground when markets fall.
IUL is designed for the long game — building cash value over decades that becomes a tax-free income stream in retirement.
A portion of each premium covers the cost of insurance. The remainder goes into your policy's cash value account.
At each crediting anniversary, interest is credited based on an equity index. Your floor is 0% (you never lose) and your cap is typically 8–12%.
Over 10–20 years, consistent crediting at even modest rates can accumulate substantial tax-deferred cash value.
In retirement, take policy loans against your cash value. These loans are not taxable income — no 1099, no income tax.
What makes indexed universal life a powerful financial planning tool.
Cash value credits are linked to an equity index (like the S&P 500). When the market rises, your policy captures a portion of those gains — without directly owning stocks.
A 0% floor means your credited interest never goes negative due to market losses. Your cash value doesn't decrease when the market drops — a key advantage over variable life.
Access your accumulated cash value through policy loans — completely income-tax-free. IUL is one of the few vehicles that offers tax-advantaged accumulation with no contribution limits.
Many IUL policies include accelerated death benefit riders — allowing you to access a portion of the death benefit while living if diagnosed with a chronic, critical, or terminal illness.
Unlike whole life, IUL allows you to adjust your premium payments within policy limits. Overfund in high-income years to maximize cash accumulation; reduce in leaner years.
Your beneficiaries receive an income-tax-free death benefit regardless of when you pass — as long as the policy remains in force. Coverage designed to last a lifetime.
IUL is not for everyone — but for the right person with the right time horizon, it can be transformative.
Tower Hill shops across the industry's top IUL carriers to find the policy and illustration that fits your goals.
Get a free, personalized IUL illustration showing projected cash value, retirement income, and death benefit — no obligation.
Indexed universal life (IUL) is a type of permanent life insurance that combines a death benefit with a cash value component. The cash value earns interest credits tied to an equity index (like the S&P 500), with a 0% floor protecting you from market losses and a cap that limits gains. It provides lifetime coverage with tax-advantaged cash accumulation.
Whole life has guaranteed, fixed cash value growth at a lower rate. IUL offers the potential for higher cash value growth linked to market indices, but without guarantees on the growth rate. IUL also allows flexible premiums, while whole life requires fixed premium payments. IUL is generally better for accumulation; whole life for guarantees.
The floor (typically 0%) is the minimum interest credited to your cash value — even if the index goes negative, you credit 0%, not a negative number. The cap (typically 8–12%) is the maximum credited interest in a crediting period. Some carriers offer uncapped strategies with a participation rate instead.
Yes — this is one of IUL's most popular uses. Over 15–25 years of funding, cash value accumulates tax-deferred. In retirement, you access it via policy loans, which are not taxable income. Unlike 401(k) distributions, there are no required minimum distributions (RMDs) and no contribution limits.
Living benefits (also called accelerated death benefit riders) allow you to access a portion of your death benefit while you're still alive if you're diagnosed with a qualifying chronic illness, critical illness, or terminal illness. This feature turns your life insurance into a financial resource in emergencies — not just a death benefit.
IUL is best suited for people with a long time horizon (10+ years), who are in a moderate to high tax bracket, and who are disciplined about funding the policy. It's not a short-term vehicle. If you need simple, affordable death benefit protection, term life may be a better fit. Tower Hill can run a personalized illustration to show you exactly how an IUL would perform for your situation.
IUL premiums vary widely based on age, health, coverage amount, and how aggressively you want to fund the cash value. A healthy 40-year-old funding $1,500/month into an IUL might accumulate $500,000+ in cash value over 20 years. The best way to see your numbers is to get a free personalized illustration from Tower Hill.
Tower Hill Corp · TX Agency License #2608479TX · (832) 856-1704 · support@towerhillcorp.com. IUL policies are complex financial instruments. Projections shown in illustrations are not guaranteed. Policy performance depends on actual index credits, costs of insurance, and funding levels. Consult a licensed insurance professional before purchasing.