Premium Payments
Premium payments enter the policy and help support life insurance protection, policy charges and available cash value.
Indexed Universal Life Insurance
Permanent coverage with index-linked interest crediting.
Indexed universal life insurance combines permanent life insurance with cash value and an interest-crediting method linked to an external index, subject to policy terms and limits.
Indexed Universal Life
Permanent life insurance with
cash value and index-linked crediting.
01
Permanent Coverage
Subject to adequate funding
02
Cash Value
Policy value can accumulate
03
Index-Linked Crediting
According to contract terms
04
Policy Review
Funding and charges matter
Indexed Universal Life
Life insurance protection with a different crediting method.
Indexed universal life is a form of universal life insurance. It combines a death benefit, a cash-value account and flexible policy features.
What makes IUL different is that interest credited to certain policy value is determined using a formula linked to an external reference index.
How IUL Works
Four parts shape the policy over time.
Actual policy values depend on premiums, charges, credited interest and the terms of the contract.
Policy Costs
Cost of insurance, expenses and other applicable charges are deducted according to the contract.
Interest Crediting
Interest may be credited using a formula linked to an external reference index and the selected strategy.
Death Benefit
The policy can provide long-term death-benefit protection while applicable funding requirements continue to be met.
Index-Linked Crediting
The index is only part of the calculation.
The contract's crediting formula determines how movement in the reference index affects credited interest.
Index performance does not equal the policy's credited rate.
Caps, participation rates, spreads, floors and other contract provisions can change the amount of interest credited.
01
Reference Index
The selected strategy uses an external reference defined by the policy.
02
Participation Rate
A participation rate may determine how much of a calculated index gain is used in the crediting formula.
03
Cap or Spread
A strategy may limit credited interest through a cap, spread or other contract term.
04
Floor or Minimum
Certain strategies may include a stated floor or minimum crediting provision. Policy charges can still reduce value.
Crediting Periods
Index movement and credited interest are not the same thing.
These examples describe the general relationship only. Actual results depend on the policy formula.
The reference index rises.
The policy's formula determines how much index-linked interest, if any, is credited after applying applicable caps, participation rates, spreads or other terms.
Little or no index movement.
Credited interest depends on the strategy and contract. Ongoing policy charges continue according to policy terms.
The reference index declines.
Any applicable floor or minimum crediting provision is determined by the contract. Policy charges may still reduce account value.
Cash Value
Cash value has to support the policy as well as accumulate.
Policy value can receive credited interest, but insurance costs and other charges are also deducted. Both sides affect future values.
Interest depends on the selected policy strategy and contract terms.
Insurance and policy costs reduce available policy value.
Loans may be available against sufficient value and accrue interest.
Withdrawals can reduce available value and may reduce policy benefits.
Policy Value
Crediting assumptions and policy
charges should be reviewed together.
Life Insurance First
Begin with the people the policy is meant to protect.
Indexed universal life is still life insurance. The death benefit and the needs of beneficiaries should remain central to the decision.
01
Income needs
Consider income that others may depend on after the insured's death.
02
Debts and obligations
Mortgage balances and other obligations may affect the amount of coverage needed.
03
Coverage duration
Consider how long the life insurance need is expected to continue.
04
Beneficiaries
Beneficiary designations should be reviewed when family or financial circumstances change.
Policy Illustration
Illustrated values are not all guaranteed values.
IUL illustrations can show guaranteed values alongside values based on permitted non-guaranteed assumptions. Read the distinction carefully.
01
Guaranteed values
Identify the values and guarantees stated by the contract.
02
Non-guaranteed values
Illustrated non-guaranteed values can change when assumptions change.
03
Premium assumptions
Check how much premium the illustration assumes will be paid.
04
Policy duration
Review how the illustrated values affect projected policy duration.
Permanent Life Insurance
Similar long-term purpose, different policy mechanics.
The right comparison depends on the actual policy contract, guarantees, charges and insurance need.
Interest credited under the policy.
Traditional universal life provides permanent insurance with cash value and flexible policy features.
Permanent life insurance
Cash-value account
Flexible policy structure
Index-linked interest crediting.
IUL is universal life with interest-crediting strategies linked to an external reference, subject to policy formulas.
Permanent life insurance
Cash-value account
Index-linked crediting strategies
A more structured permanent policy.
Traditional whole life generally uses a more fixed premium and cash-value structure under the contract.
Permanent life insurance
Cash value
More structured premium design
Policy Details to Watch
Index-linked crediting is only one part of the policy.
Policy charges, funding, crediting terms and withdrawals can all affect long-term results.
Crediting Terms
Review caps, participation rates, spreads, floors and other applicable crediting provisions.
Policy Charges
Insurance costs and expenses continue regardless of how the reference index performs.
Lapse Risk
Insufficient policy value or premium funding can affect how long coverage remains in force.
Loans & Withdrawals
Accessing policy value can reduce available cash value and may affect death benefits or policy duration.
Ongoing Policy Review
Check actual policy values rather than relying on old projections.
IUL should be reviewed over time so current policy values, premium funding and insurance needs can be compared with earlier assumptions.
01
Current policy value
Compare current values with prior illustration assumptions.
02
Current crediting terms
Review the terms applying to available index-crediting strategies.
03
Premium funding
Check whether planned funding remains suitable for the intended policy duration.
04
Death benefit and beneficiaries
Confirm that the coverage amount and beneficiary information remain current.
Getting Started
Start with the insurance need, then review the policy mechanics.
Death-benefit needs, policy funding and index-crediting provisions should be considered together.
01
Review your coverage need.
Consider beneficiaries, income needs, obligations and intended coverage duration.
02
Review policy options.
Compare death-benefit choices, funding, charges and available crediting strategies.
03
Review the illustration.
Separate guaranteed values from values based on non-guaranteed assumptions.
04
Review the policy over time.
Monitor actual values, premium funding, charges and beneficiary information.
Indexed Universal Life FAQ
Common questions.
Features, guarantees and crediting terms vary by insurer and contract.
Indexed universal life is universal life insurance in which interest credits are linked to an external reference according to the policy's crediting formula.
IUL can build cash value. Premium payments, policy charges and credited interest all affect the value available in the policy.
Not necessarily. The policy's crediting formula can apply participation rates, caps, spreads, floors or other contract provisions when calculating credited interest.
Index-crediting strategies may contain floors or minimum provisions, but insurance costs and other policy charges can still reduce policy value. The contract controls.
Yes. If available policy value and premium funding are not sufficient to support applicable charges, coverage may lapse unless an applicable guarantee keeps the policy in force under its stated conditions.
Policy loans may be available when sufficient value exists. Loan interest and unpaid balances can affect policy values, benefits and policy duration.
An illustration can show guaranteed and non-guaranteed policy values and the assumptions used to project future policy performance. Actual results can differ from illustrated values.
Indexed Universal Life Insurance
Review permanent coverage and index-linked crediting together.
Tell Trinity about your protection needs, beneficiaries and coverage goals to begin reviewing available indexed universal life insurance options.
Product availability, eligibility, policy terms,
charges, crediting methods, participation rates,
caps, spreads, floors, guarantees, death benefits
and cash values vary by carrier and contract.
Policy loans and withdrawals can affect policy
values, benefits and policy duration.
Contact Trinity for product availability
and policy details.