Sales of indexed universal life (IUL) insurance policies have surged 28% year-over-year as elevated interest rates improve the cash value accumulation potential of these hybrid insurance-investment products.
Why IUL Is Trending
IUL policies credit interest based on stock index performance while guaranteeing a minimum floor, making them attractive in the current high-rate environment where floor rates have increased.
- Average credited rates on IUL policies now range from 6-9% versus 3-5% during the low-rate era
- Guaranteed floor rates have risen to 2-3% compared to 0-1% previously
- Premium flexibility allows policyholders to adjust payments based on financial circumstances
Expert Caution
Financial advisors warn that IUL policy illustrations often show best-case scenarios. Cap rates limiting maximum returns, complex fee structures, and surrender charges make these products unsuitable for short-term goals. Consumers should understand the 10-15 year commitment typically required for meaningful cash value growth.
