An IUL has two main components:

• Death Benefit: The life insurance protection paid to your beneficiaries upon your death.

• Cash Value: The amount that grows over time, which can be influenced by the performance of a chosen market index. The growth is subject to a cap and floor, which means it has the potential for growth without the risk of losing money due to market downturns.

• Flexible Premiums: You can adjust the amount and frequency of your premium payments.

• Cash Value Growth: The cash value grows based on a stock market index, offering the potential for greater returns than a traditional whole life policy.

• Downside Protection: There is usually a floor, meaning your cash value will not decrease due to negative market performance.

• Loan Options: You can borrow against the cash value of your policy, often with favorable loan terms.

The cash value grows based on the performance of a market index, but it is not directly invested in the stock market. The insurer uses a formula to credit your account based on index performance, subject to caps (maximum growth) and floors (minimum growth).

While both are types of permanent life insurance, the key difference is how the cash value grows:

• Whole Life: Offers a guaranteed cash value growth, but the returns are typically lower and fixed.

• IUL: Offers the potential for higher returns based on stock market indexes but with no risk of loss due to market downturns, thanks to the floor.