An indexed universal life (IUL) policy ties part of its growth to a market index — but with two guardrails: a cap on the upside and a floor that protects you in down years. Move the slider and the scenarios below to see the trade-off for yourself.
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This is an educational illustration, not a guarantee. The figures below are hypothetical and are meant to show the mechanics of a floor and a cap. They are not a projection of any specific policy, do not reflect all policy charges or cost of insurance, and are not a substitute for a carrier illustration. Caps and participation rates are set by the insurer and can change.
PART 1
One year at a time
Drag to set a hypothetical index return for the year. See what a straight market account would do versus what an IUL would credit.
Index return this year+8%
−30%0%+30%
Straight market account
+8%
IUL indexed credit
+8%
Within the cap and above the floor — the IUL credits the same +8% as the market this year.
PART 2
The same idea, played out over 10 years
Pick a hypothetical decade. Good years show the cap holding growth back; rough years show the floor protecting your value. The honest picture is that you trade some upside for protection on the downside.
Important. This tool is provided by Insurance Steel Group for general education only. It illustrates the concept of a credited-interest floor and cap and does not represent the performance of any actual insurance policy. Real indexed universal life policies include cost of insurance, administrative and policy charges, surrender charges, and rider costs that reduce cash value and are not fully reflected here. Caps, floors, participation rates, and crediting methods are set by the issuing insurer and may change over the life of the policy. Index returns shown are hypothetical and do not represent any particular index or time period, and past performance does not predict future results. Indexed accounts do not invest directly in the stock market and do not receive dividends. Loans and withdrawals reduce cash value and death benefit. This is not tax, legal, or investment advice. Guarantees are based on the claims-paying ability of the issuing insurer. Any decision about life insurance should be based on a current, carrier-issued illustration and a conversation with a licensed agent. CA License #[YOUR LICENSE NUMBER].