What Is an IUL (Indexed Universal Life)?
The basics
Indexed universal life (IUL) is a form of permanent life insurance. Part of the policy's cash-value growth potential is linked in part to the performance of a market index, such as the S&P 500, subject to the policy's terms, caps, floors and charges.
Not the same as investing directly in the market
Your premium isn't invested directly in the index. Insurers apply a "cap" (a maximum crediting rate) and often a "floor" intended to limit downside from index performance, as spelled out in the contract. That doesn't make the policy cost- or risk-free, though - policy charges and how the contract performs over time still matter, and vary by carrier.
Why people consider it
IUL combines a permanent death benefit with the potential for cash-value growth, and some policies allow tax-advantaged access to that cash value (a tax professional can speak to your specific situation). It's generally considered alongside other permanent life options rather than as a direct substitute for investing.
What to ask before buying one
Worth asking about: the current cap, floor and participation rate, how policy charges work, and how the illustration performs under different scenarios - not just the best case. A broker who can walk through illustrations from multiple carriers side by side makes it easier to compare apples to apples.
This article is for general education and isn't personalized financial or insurance advice. Speak with a licensed Pursuit Life Group broker about what makes sense for your situation.