IUL Calculator

An indexed universal life policy does not buy the index. It credits a rate worked out from the index move by four policy terms, and this tool applies them in order so you can see participation, the spread, the cap and the floor each doing their work, with the gap between what the index did and what the policy pays printed at the end. A second action runs the account arithmetic for up to five years: premium in, premium load, policy fee and cost of insurance out, credited rate applied to what is left, next to the same premiums with no charges at all. It stops at five years on purpose, because a long projection at a level rate and a level insurance charge is how these policies are mis-sold.

Calculator Type

The four policy terms applied in order, with the gap between what the index did and what the policy pays shown at the end.

The price move of the index the segment tracks. Negative years are allowed and are the point of the floor.
The share of the index move the policy starts from. A participation rate above 100 usually comes with a lower cap or a spread.
Taken off the move before the cap. Uncapped strategies almost always carry one.
The worst the crediting can be. Usually zero, which means a losing year credits nothing rather than losing money to the index. Charges still come out.
Widget

Premium in, charges out, the credited rate applied to what is left. Five years is the limit on purpose.

Taken off the top before anything is credited. Five to ten percent is common, and some policies take more in the first years.
From the policy illustration, per year. It is the charge for the death benefit and it is the figure that grows.
It rises with attained age. Take the first few years from the illustration and work out the growth between them rather than guessing.
From the action above. This is an assumption, not a rate anybody owes you, and in real life it is a different number every year.
Capped at five. A longer run would be a projection, and a projection of this is not honest arithmetic.
What the insurer keeps if you cash the policy in now. Surrender charges commonly run ten to fifteen years and are largest at the start.
Widget
Related Tools
Future Value Calculator Annuity Payout Calculator Life Insurance Needs Calculator