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How IUL Credits Interest

IUL’s unique power lies in how it credits interest to the cash value. Interest is tied to the performance of an index in the stock market, like the S&P 500. But the money is not directly invested in the stock market.

Interest is credited in annual point-to-point segments. Each year, the percentage, or amount of change from the previous year, is calculate, based on the performance of the index.

If the result is positive from the previous year, index interest is credited to the cash value, based on your selected participation rate and cap. The cap is the maximum rate credited to your policy.

If the result is negative from the previous year, the interest credited to your cash value will never be less than the minimum guaranteed rate, or floor, which is zero percent.


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