Indexed Universal Life Insurance: Cash Value Growth Explained

Indexed universal life (IUL) insurance combines a death benefit with a cash value account, allowing lifelong coverage. Cash value growth is tied to market indices like the S&P 500, not fixed interest. If an index gains 10%, a cash value of $50,000 could earn about $5,000 before fees. Policies may include features that affect returns, such as caps or floors on interest. Understanding these factors is essential for potential buyers, as they can impact overall returns and policy performance.