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IUL: 0% Floor, Index Growth, and Life Insurance
A plain-English walkthrough of indexed universal life and why it is not for everyone.
⚙️ Comparison Inputs
$400/mo
5.5%
User-selected net cash-value assumption—not a carrier projection.
7.0%
Roth IRA
2026 base limit shown · Investment risk applies
$0
Projected Balance at Retirement
Annual Limit$7,500 base 2026 limit
Actual Yearly Contribution$0
Total Contributed$0
Tax-Free Growth✓ Yes
Beneficiary TransferAccount beneficiary rules apply
Insurance Living BenefitsNot an insurance policy
Market Downside Risk✗ Full exposure
Income Limit?Income phaseouts apply
Indexed Universal Life
Index-linked crediting · Policy charges · Life insurance
$0
Projected Cash Value at Retirement
Annual FundingPolicy-design dependent
Actual Yearly Contribution$0
Total Contributed$0
Tax TreatmentTax-deferred; access rules apply
Death Benefit✓ Included
Living BenefitsMay be available by rider
Index FloorCrediting floor; charges continue
EligibilityNo Roth income limit; underwriting applies
📈 Cash Value Growth Over Time
📋 Year-by-Year Snapshot
| Age | Year | Roth IRA Value | IUL Cash Value | IUL Advantage |
|---|
🔍 Feature-by-Feature Comparison
| Feature | Roth IRA | IUL |
|---|---|---|
| Contribution or funding limit | Annual and eligibility rules apply | Policy design, underwriting, and tax limits apply |
| Income eligibility | Income phaseouts may apply | No Roth-style income limit; underwriting applies |
| Tax treatment | Tax-free qualified distributions | Tax-deferred growth; policy access rules apply |
| Access | Withdrawal rules and penalties may apply | Loans or withdrawals may be available |
| Market downside risk | Account value follows selected investments | Index-crediting floor may apply; policy charges continue |
| Market upside participation | Depends on selected investments | Contract caps, participation rates, or spreads apply |
| Beneficiary transfer / death benefit | Account beneficiary rules apply | Life-insurance death benefit included |
| Living benefits (critical illness) | Not an insurance benefit | May be available by rider |
| Loan provisions | Retirement-account distribution rules apply | Policy loans accrue interest and reduce values |
| Required Minimum Distributions | ✓ No RMDs | ✓ No RMDs |
| Creditor protection | State-dependent | State-dependent |
| Estate transfer | Beneficiary and distribution rules apply | Death benefits are generally income-tax-free |
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