Ethos ranks as the best provider for indexed universal life insurance, earning top marks in every category. Still, the best choice depends on your personal goals and coverage needs. Below are the best indexed universal life insurance companies for different categories.
Best Indexed Universal Life Insurance (2026)
Compare the best indexed universal life insurance in 2026. Explore top IUL companies, rates and features to find the right policy for your goals.
Find out if you're overpaying for life insurance below.
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Updated: February 3, 2026
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Key Takeaways
Ethos is the best indexed universal life insurance company, with fast underwriting, living benefit riders at no extra cost and clear index crediting disclosures, though availability varies by state and partner provider.
IUL policies offer market-linked growth with financial protection. Cash value grows based on index performance with typical caps of 10-12% and 0% floors that prevent losses, providing more upside than traditional universal life while limiting downside risk compared to direct investing.
Active management is essential. IUL policies require regular monitoring of premium payments, policy charges and cash value performance to prevent lapse, with weak market returns potentially requiring additional premiums to maintain coverage.
Why You Can Trust MoneyGeek
We analyzed 188,496 quotes from indexed universal life insurance companies across a wide range of ages and demographic profiles. Licensed insurance expert and industry analyst Mark Fitzpatrick has reviewed our methodology, which focuses on affordability, customer experience, and coverage options. MoneyGeek maintains editorial independence and doesn't receive compensation from insurance companies for life insurance rankings or recommendations. For more information, read our full methodology.
Compare the Best Indexed Universal Life Insurance
Ethos | 5 | $328 (men) $275 (women) | $3,935 (men) $3,297 (women) | |
Protective Insurance | 4.7 | $325 (men) $280 (women) | $3,905 (men) $3,360 (women) | |
Pacific Life | 4.3 | $357 (men) $304 (women) | $4,280 (men) | |
Legal & General | 3.8 | $542 (men) $421 (women) | $6,501 (men) $5,501 (women) |
Rates above are based on our sample applicant profiles and MoneyGeek's analysis of indexed universal life insurance providers. Actual premiums will vary depending on your age, health, location, coverage needs and insurer underwriting guidelines. These rates are estimates for comparison purposes only. Contact insurers directly for personalized quotes and current pricing.
Ethos
Best Overall
MoneyGeek Rating
5/ 5
5/5Affordability
5/5Customer Experience
5/5Coverage Points
Average Monthly Cost
$328 (men); $275 (women)Based on average quotes for a $500,000 policy for 30- to 49-year-old nonsmokers with average weight and health ratings.
Protective
Most Affordable
MoneyGeek Rating
4.7/ 5
5/5Affordability
4.1/5Customer Experience
5/5Coverage Points
Average Monthly Cost
$325 (men); $280 (women)Based on average quotes for a $500,000 policy for 40-year-old nonsmokers with average weight and health ratings.
Pacific Life
Best Coverage Options
MoneyGeek Rating
4.3/ 5
4.7/5Affordability
3.3/5Customer Experience
4.7/5Coverage Points
Average Monthly Cost
$357 (men); $304 (women)Based on average quotes for a $500,000 policy for 40-year-old nonsmokers with average weight and health ratings.
Legal & General
Best Customer Experience
MoneyGeek Rating
3.8/ 5
3.2/5Affordability
5/5Customer Experience
3.3/5Coverage Points
Average Monthly Cost
$542 (men); $421 (women)Based on average quotes for a $500,000 policy for 40-year-old nonsmokers with average weight and health ratings.
How Does Indexed Universal Life Insurance Work?
Indexed universal life (IUL) insurance is a type of permanent life insurance that combines a death benefit with a cash value component linked to stock market index performance. Your cash value grows based on index returns. There is a guaranteed floor (usually 0%) that protects against losses and a cap (usually 10% to 12%) that limits maximum gains. IUL offers more growth potential than traditional universal life while providing downside protection that direct market investing doesn't offer.
IUL Index Strategy Types & Allocation Tips
IUL policies let you choose how your cash value grows by allocating premiums across different index strategies and fixed accounts. Understanding these options and matching your allocation to your age and risk tolerance helps maximize long-term performance:
- S&P 500 Index Strategy. Tracks the performance of 500 large-cap U.S. stocks with typical caps of 10-12% and a 0% floor. This straightforward strategy offers the highest growth potential during strong market years but can hit the cap frequently in bull markets.
- Volatility-Controlled Index Strategy. Uses algorithms to automatically shift between stocks and bonds based on market volatility levels. These strategies usually offer lower caps of 8-10% but provide smoother, more consistent returns during turbulent market periods.
- Multi-Year Index Strategy. Locks in a crediting period for 2-5 years with higher participation rates up to 150% or caps of 12-15%. You can't adjust allocations during the crediting period, making this best for long-term commitments.
- Fixed Account Option. Provides guaranteed interest rates set by the insurer, usually 3-4% annually. This option has no market linkage and offers complete stability for conservative portions of your allocation.
Review allocations annually and adjust based on your age, market conditions and retirement timeline. Gradually shift toward conservative allocations as you approach retirement to protect accumulated cash value.
Using IUL for Retirement Income: Loans & Distribution Efficiency
Many people buy IUL policies for retirement income through tax-free policy loans. You can borrow against your cash value without triggering income taxes, though the insurer charges interest and outstanding balances reduce your death benefit.
Most insurers offer fixed loans (5-6% annually) or indexed loans with variable rates tied to market performance. Some policies guarantee maximum loan rates, while others use non-guaranteed rates that can change over time.
Taking excessive loans creates overloan risk. If your loan balance exceeds your cash value, your policy could lapse and trigger taxable income. Many carriers now offer overloan protection riders that prevent lapse by reducing your death benefit to cover the loan.
How to Choose the Best Indexed Universal Life Insurance
The best indexed universal life insurance fits your financial goals, risk tolerance and budget. Follow these steps to find the right policy and provider.
- 1Set Your Goals and Timeline
Decide what you want your policy to achieve, whether it’s estate planning, retirement income, business protection or family security. Your goals and time frame will guide how you allocate your index options and plan your premium payments.
- 2Compare Index Crediting Options
Look at each insurer’s caps, participation rates and floors. A higher cap doesn’t always mean better growth if the participation rate is low. Ask for historical data showing how each crediting method has performed over the past 10 to 15 years.
- 3Review Policy Costs
Check the monthly fees, cost of insurance and surrender charge schedule. Sometimes, lower upfront costs lead to higher long-term charges that can slow down your cash value growth.
- 4Check the Company’s Financial Stability
Pick insurers rated A- or higher by AM Best with a record of strong customer service. You can also review NAIC complaint indexes to see how satisfied other policyholders are.
- 5Look Closely at Projections
Be cautious of illustrations showing returns higher than 6% to 7%. Using more conservative estimates gives you a clearer picture of your policy’s potential and helps prevent underfunding.
Indexed Universal Life Insurance Cost
IUL premiums depend on personal factors like age, gender, health, and coverage amount, plus ongoing policy charges and the performance of underlying index strategies. Unlike term life insurance with fixed premiums, IUL costs can fluctuate based on policy charges and how much premium you choose to pay above the minimum required amount.
Data filtered by:
40
Male
No
| $100,000 | $82 | $979 |
| $250,000 | $204 | $2,448 |
| $500,000 | $408 | $4,895 |
| $750,000 | $612 | $7,343 |
| $1,000,000 | $816 | $9,791 |
| $1,500,000 | $1,224 | $14,686 |
| $2,500,000 | $2,040 | $24,477 |
Rates above are based on our sample applicant profiles. Actual premiums will vary depending on your profile and coverage needs. Contact insurers for accurate pricing.
Best Indexed Universal Life Insurance Companies: Bottom Line
Indexed universal life insurance carries investment risk. Cash value growth hinges on market index performance and gets limited by caps, floors and fees that differ by insurer. Policy performance isn't guaranteed, and weak cash value growth can cause your policy to lapse.
IUL policies demand active management and steady funding to work as intended. Choose a company with solid customer support and digital tools that simplify policy monitoring. The right IUL policy from a reputable insurer offers financial protection and growth potential, but success requires realistic expectations and committed long-term planning.
Based on our analysis, Ethos, Protective, Pacific Life and Legal & General are the best indexed universal life insurance companies.
Frequently Asked Questions (FAQs)
We answer common questions about indexed universal life insurance, covering everything from basic mechanics to investment risks and costs.
Is indexed universal life insurance a good investment?
IUL isn't purely an investment. It's life insurance with an investment component. It works well for people who need permanent life insurance and want growth potential beyond traditional whole life policies. Policy charges and fees reduce returns compared to direct investing. IUL makes sense if you've maximized other tax-advantaged accounts and need the life insurance protection, but it shouldn't replace your primary retirement savings strategy.
Can you lose money in indexed universal life insurance?
Your cash value won't decrease due to negative index performance because of the guaranteed floor, but you can lose money if policy charges exceed cash value growth or if you surrender the policy early. High surrender charges in the first 10-15 years mean you'll likely lose money if you cancel early. Poor index performance combined with high policy costs can also erode cash value over time, potentially causing your policy to lapse.
What are the main risks of indexed universal life insurance?
The biggest risks include policy lapse due to insufficient cash value growth, changing caps and participation rates that reduce future returns, and high early surrender charges if you need to cancel. Policy loans can accumulate and cause coverage lapse if not managed carefully.
Unlike direct investing, you don't control the underlying investments, and insurance company fees reduce your returns. Poor policy design or inadequate funding can lead to expensive coverage that doesn't meet your original goals.
How do index loan types affect retirement income from an IUL?
Fixed participating loans and guaranteed loan rates improve distribution predictability and can create positive arbitrage when index credits exceed the loan rate. Variable loans can rise with rates and reduce income. Check if borrowed funds still earn credits and whether overloan protection is included.
What is an Index Lock and why does it matter?
Index Lock lets you capture a positive credit before the end of the crediting period, protecting gains if markets fall later. It can reduce zero‑credit years and smooth accumulation, especially in volatile markets.
What is a Protected Death Benefit and who should consider it?
A Protected Death Benefit allows you to guarantee a portion of the death benefit while still taking loans or withdrawals. It’s useful for retirees using cash value for income who still want to secure a minimum legacy and reduce lapse risk when COI rises.
Our Ratings Methodology
Indexed universal life insurance policies vary in cost structure and growth potential, making it important to compare the specific features that impact your long-term returns. We designed our research to focus on what actually matters when you're building wealth through permanent life insurance with market-linked growth.
We scored indexed universal life insurance companies across three weighted categories. Our analysis reveals which insurers offer the best combination of competitive costs, strong financial stability and flexible policy features for long-term wealth building.
Our Scoring System
Each company can earn up to five points in the following weighted categories:
- Affordability (55%): Premium costs and internal policy fees
- Customer Experience (30%): Financial strength and service quality
- Coverage Options (15%): Index choices and policy flexibility
Customer Profiles Used
We used standardized profiles to keep comparisons fair:
- For overall rankings: Men ages 30 to 49, nonsmokers, 5'9", 160 lbs., average health rating
- For specific categories: 40-year-old male, nonsmoker, 5'9", 160 lbs., average health rating
We also adjusted profiles by age, gender, health and location to see how prices vary. All premium rates are based on the standard profile unless otherwise noted.
Data Sources and Analysis
Our analysis includes quote data from multiple insurers, AM Best financial strength ratings, NAIC complaint ratios, J.D. Power satisfaction scores and in-depth reviews of policy features.
We gathered indexed universal life insurance quotes for various coverage amounts to find pricing patterns and identify which companies consistently offer good value across different policy sizes and customer profiles.
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.