Indexed universal life insurance combines permanent life insurance with cash value that can earn interest based partly on the performance of a market index.
Golden Shield Life Insurance
Nationwide License # 21216745
Indexed universal life policies can look alike on the surface. The differences show up in the crediting rules, the internal charges and the flexibility you keep after the policy is issued. Before choosing a policy, review these five details:
Indexed universal life insurance (IUL) is a type of permanent life insurance that pays a death benefit to your beneficiaries and builds cash value that can earn interest linked in part to a market index, such as the S&P 500. Your money is not invested directly in the market. Instead, the insurance company credits interest to your cash value based on an index formula that usually includes a cap on gains and a floor, often 0%, on losses.
Like other universal life policies, IUL offers flexible premiums within limits and a death benefit that may be adjusted over time. The cash value can be accessed through withdrawals or policy loans, subject to the policy terms and potential tax consequences. Because policy charges are deducted from the cash value every month, an IUL policy needs enough premium and enough credited interest to stay in force over the long run.
IUL has become one of the most widely purchased forms of permanent life insurance in the United States. It is also one of the most misunderstood. The same features that make it flexible can make it easy to underfund, and the illustrations used to sell it are projections rather than promises. This guide explains how the product works, what it costs, who it may be a fit for, and the questions worth asking before you apply. If you are comparing it against simpler options, our guides to term life insurance and whole life insurance are good companions to this page.
Is an indexed universal life policy right for you? Keep reading, or skip ahead to the quote form.
Indexed universal life insurance can provide more than a death benefit. Depending on the policy, it may offer living benefits, cash-value growth, access to policy value, flexibility, and long-term coverage.
Indexed universal life insurance can provide permanent life insurance coverage when the policy is properly funded and remains in force. The death benefit may help beneficiaries replace income, cover debts, support a business need, or leave money behind.
Some IUL policies may allow access to part of the death benefit during the insured's lifetime after a qualifying terminal, chronic, or critical illness. Certain policies may also offer long-term-care benefits, depending on the rider and policy design.
Part of the policy may build cash value over time through fixed or index-linked interest-crediting options. The policyholder is not directly investing in the stock market, and actual results depend on policy design, funding, charges, and crediting terms.
Available cash value may be accessed through withdrawals or policy loans, subject to the contract. Loans charge interest, and loans or withdrawals can reduce policy value and the death benefit.
IUL generally offers more flexibility than many traditional policies. Depending on the contract, premiums, death-benefit options, and cash-value allocations may be adjusted as goals and finances change.
An IUL can be designed around different long-term priorities, including permanent death-benefit protection, cash-value accumulation, or a blend of both. Periodic reviews help keep the policy aligned with its intended purpose.
Indexed universal life insurance is permanent life insurance with flexible premiums, a death benefit, and cash value that may earn interest based partly on the performance of an outside market index. Your policy value is not invested directly in the market. Instead, the insurance company uses a crediting formula to determine how much interest may be added to the policy.
Depending on the policy, available value may be allocated between a fixed-interest account and one or more index-linked crediting strategies.
Each index strategy measures performance over a defined period, often one year. The index value at the beginning of the period is compared with the value at the end.
The participation rate determines how much of the index gain is used in the crediting calculation. If an index rises 10% and the participation rate is 80%, the starting calculation in that example would be 8%.
Some strategies limit credited interest with a cap. Others may subtract a spread from the index gain. Different strategies can use different formulas.
The floor establishes the minimum index credit under the strategy. A 0% floor generally means a negative index return would not create a negative index credit.
At the end of the index period, the policy applies the applicable cap, participation rate, spread, floor, and other contract provisions to determine the interest credit.
You do not need to memorize every formula. What matters is understanding how the strategy works, what limits apply, and whether the overall policy is designed around your goal.
Important: A 0% floor applies to the index-crediting calculation, not to the entire policy. Insurance costs, rider charges, loans, and withdrawals can still reduce policy value.
An IUL policy can include riders that let you use part of the death benefit while you are living. Here is what each one covers.
A terminal illness is a condition a doctor certifies will limit life expectancy to 12 or 24 months. The rider advances part of the death benefit as a lump sum.
A chronic illness is a lasting condition that prevents two of six daily activities or causes severe cognitive impairment. The rider pays monthly or lump-sum benefits.
A critical illness is a covered event such as a heart attack, stroke, cancer, quadriplegia, paraplegia, or major organ failure. The rider pays a percentage of the death benefit.
Long-term care is help with daily living at home or in a care facility. The rider pays monthly benefits for qualifying care and carries its own separate premium.
Important: Riders differ by carrier and state. Benefits paid early reduce the death benefit and can reduce cash value, and a fee or discount can apply. Ask us which riders a policy includes before you buy.
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I highly recommend Golden Shield Life Insurance to anyone looking for term life coverage. They offer some of the best rates and excellent service.
An IUL is life insurance first, not an investment account. It may be a good fit for someone who wants permanent coverage, living benefits, flexible premiums, cash-value growth potential and access to policy value later in life. It is usually a poor fit for someone looking for the lowest-cost coverage or a short-term place to grow money.
Yes, the cash value can go down. Most indexed strategies have a 0% floor, so a market drop does not create a negative interest credit. But cost of insurance and other policy charges are deducted every month, so in years with low or zero credits, those charges can reduce the cash value.
No. Your money is not invested in the stock market or in any index. The insurance company uses an index, such as the S&P 500, only to calculate how much interest to credit to your cash value, subject to caps, participation rates and a floor.
There is no standard monthly price for an IUL. Cost depends on your age, health, death benefit, underwriting class, riders and how much you choose to fund the policy. A carrier illustration built for you is the only way to see an actual premium and projected values.
Policy loans from a properly structured IUL that is not a Modified Endowment Contract are generally not taxed when you take them. They are not automatically tax-free. If the policy lapses or is surrendered with a loan outstanding, or becomes a Modified Endowment Contract, taxes and penalties can apply.
Yes, if the policy has enough available cash value. You can usually take a withdrawal, also called a partial surrender, or a policy loan. Both reduce cash value and the death benefit, and withdrawals above the premiums you have paid may be taxable.
No. Retirement income shown in an illustration is based on non-guaranteed assumptions. Actual income depends on how the policy is funded, the interest credited, policy charges and loan rates over time. An IUL can supplement retirement income, but it should not be treated as a guaranteed pension.
If you surrender the policy, you receive the net cash surrender value, which is the cash value minus any surrender charges and outstanding loans. Surrender charges are usually highest in the early years and decline over 10 to 15 years, so canceling early can return much less than you paid in.
Many do. Depending on the carrier and state, an IUL may let you access part of the death benefit after a qualifying terminal, chronic or critical illness, and some offer long-term care riders. Using these benefits reduces the death benefit, and riders, fees and eligibility rules vary by policy.
An IUL can turn out badly when it is treated like an investment instead of life insurance, or when it is underfunded to keep the premium low. It should be structured for protection first and accumulation second, with a premium you can keep paying and a clear understanding of the costs.
Not without a careful comparison. Replacing a policy can restart surrender charges and the contestability period and may cost more at your current age and health. Golden Shield Life Insurance only recommends a replacement when it clearly benefits you, and we review your existing policy before suggesting any change.
There is no single IUL that is best for everyone. Some policies emphasize death-benefit guarantees, others cash accumulation, living benefits, loan options or wellness programs. Golden Shield Life Insurance compares IUL policies from carriers such as Prudential, Principal, John Hancock and Nationwide based on your age, health, budget and goals.
Golden Shield Life Insurance is an independent life insurance agency at 1954 Airport Rd in Atlanta, Georgia, serving clients nationwide by phone, video and in person. Founder Aaron Polk, a former national medical underwriter, designs IUL policies to be funded and held for the long term. You can schedule a call or call (678) 884-4653.
Have a question that is not answered here? Schedule a call with Golden Shield Life Insurance or call (678) 884-4653.
“Aaron Polk is the best. He listens, explains everything clearly, and truly cares about helping his clients. I highly recommend him.”
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Independent means you have choices.
When you are considering indexed universal life insurance, who helps you choose and structure the policy matters almost as much as the policy itself. An IUL can remain in force for decades, so you should know who you are working with, confirm that they are properly licensed, and understand where their business is located and how to reach them after the policy is issued.
Golden Shield Life Insurance is an independent life insurance agency and broker, which means we are not limited to one insurance company or one product. A captive agent generally represents a single carrier or a limited product line. An independent broker can compare multiple carriers, underwriting guidelines, policy designs, living benefits, loan provisions, and pricing to help determine which options you may qualify for.
That difference is especially important with IUL life insurance. The policy with the highest illustrated rate is not automatically the right policy. We look at the complete design: the death benefit, cost of insurance, cash-value potential, living benefits, crediting strategies, loan provisions, guarantees, and how comfortably you can fund the policy over time.
Our goal is not to place everyone into the same IUL. It is to show you the options you qualify for, explain the differences in plain language, and help you decide which direction makes the most sense for your needs and budget.
Independent means you have choices. With Golden Shield Life Insurance, the recommendation starts with you, not with one insurance company we are required to sell.
Golden Shield Life Insurance
Georgia Agency License 242517 · Agency NPN 22189085
Founder and Licensed Life Insurance Agent and Broker, Golden Shield Life Insurance · NPN 21216745 · Georgia Agency License 242517 · Former National Medical Underwriter
I'm Aaron Polk, founder of Golden Shield Life Insurance and a former national medical underwriter. An indexed universal life policy is a decision you may live with for 30 years or more, so I plan it the right way the first time: built around your goal and budget, funded to stay in force, and designed so it does not need to be rewritten or replaced in ways that bring new commissions, surrender charges and costs. My team serves clients nationwide and compares 130+ carriers rated A- or better by AM Best. If you have been declined before or have a health history, my underwriting background can help. Read our client reviews, explore our free resources, schedule a call, or contact us. Golden Shield Life Insurance was named the 2025 Best of Georgia Life Insurance Agency.
Last reviewed: October 2026. This page is reviewed and updated as products, illustration rules, tax rules and carrier practices change.
Indexed universal life insurance is permanent life insurance with cash-value accumulation potential. Interest may be credited based in part on the performance of an index, but the policy is not directly invested in the stock market or in any index. A 0% indexed-crediting floor can protect against a negative index credit, but it does not mean the policy's total cash value cannot decline, because cost of insurance and other policy charges continue. Loans and withdrawals can reduce cash value and the death benefit, may affect policy guarantees, and may create tax consequences if a policy lapses or is surrendered. Guarantees depend on the terms of the individual policy and the claims-paying ability of the issuing insurance company.
Golden Shield Life Insurance compares indexed universal life policies from multiple insurance companies. The summaries below come from each company's consumer materials, edition shown, and do not reflect current caps, participation rates, pricing or state availability. No single carrier is the right fit for every buyer.
Issued by Pruco Life Insurance Company, or Pruco Life Insurance Company of New Jersey in New York. Brochure edition 08/2026.
Issued by Principal National Life Insurance Company and Principal Life Insurance Company. Not available in California. Brochure BB12315-03.
Issued by John Hancock Life Insurance Company (U.S.A.) and John Hancock Life Insurance Company of New York. Protection IUL is not available in New York. Brochure LIFE-6953 5/24.
Issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio. Summary based on a sample illustration prepared by Golden Shield Life Insurance in October 2026. Features and availability vary by state. A personalized illustration is required to see actual premiums and values.
