Does an IUL Have Living Benefits?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Does an IUL Have Living Benefits?

Yes, Indexed Universal Life (IUL) insurance policies often provide some of the best living benefits among life insurance options.

Key Features of Living Benefits in IUL Policies

  1. Accelerated Death Benefit Riders: These allow policyholders to access a portion of the death benefit if they are diagnosed with a terminal, chronic, or critical illness.
  2. Cash Value Accumulation: IUL policies have a cash value component that grows based on a stock index, offering a potential for higher returns.
  3. Loan and Withdrawal Options: Policyholders can borrow against the cash value or make withdrawals for financial needs like education expenses, debt repayment, or retirement income.
  4. Flexible Premiums: IULs offer flexible premium payments, which can be adjusted based on the policyholder’s financial situation.
  5. Tax Advantages: Loans and withdrawals from the cash value are generally tax-free, as long as the policy remains in force.

Living Benefits in Different Life Insurance Policies

FeatureIndexed Universal Life (IUL)Whole LifeTerm Life
Cash Value GrowthBased on a stock index, potentially higher returnsFixed interest rate, consistent growthNone
Loans/WithdrawalsAvailable, often tax-freeAvailable, often tax-freeNot available
Flexible PremiumsYesNoNo
Accelerated Death BenefitCommonly availableAvailable in some policiesLess common


Indexed Universal Life insurance policies stand out for their living benefits, including accelerated death benefit riders, cash value growth potential, flexible premium payments, and favorable tax treatment. These features make IUL a versatile choice for policyholders seeking both life insurance coverage and financial flexibility during their lifetime. If you’re considering an IUL policy, it’s important to understand how these living benefits align with your personal financial goals.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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