Updated: October 7, 2025
Advertising & Editorial Disclosure
Ethos is the best indexed universal life insurance company overall for 2025, earning an overall MoneyGeek score of 5 out of 5.
Protective Insurance offers affordable policies, making it the best option for low-cost indexed universal life insurance.
Pacific Life offers the best coverage options, while Legal & General excels in customer experience.
Ethos is the top-rated company for indexed universal life insurance policies, with its perfect rating across all categories. The best option depends on your specific needs and priorities.
Below are the best indexed universal life insurance companies for different categories.
Overall | Ethos | 5 | $328 (men) $275 (women) | $3,935 (men) $3,297 (women) |
Best Cheap | Protective Insurance | 4.7 | $325 (men) $280 (women) | $3,905 (men) $3,360 (women) |
Coverage Options | Pacific Life | 4.3 | $357 (men) $304 (women) | $4,280 (men) 3,652 (women) |
Customer Experience | 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 2025 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.
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IUL policies offer appealing growth potential, but they require careful evaluation of crediting methods, ongoing charges and insurance company stability. The key lies in balancing the flexibility these policies offer with their complexity and costs. Decisions you make during the application process will affect your policy's performance for decades.
The best indexed universal life insurance matches your long-term financial goals, risk tolerance, and ability to fund premiums consistently over time. Here are some steps you can take to find the right policy and provider.
Determine your primary objective: estate planning, supplemental retirement income, business planning or family protection. Your timeline affects how aggressive your index allocation should be and influences the premium funding strategy.
Review each insurer's current caps, participation rates and floors for their index accounts. Higher caps aren't always better if participation rates are lower. Ask for historical performance illustrations showing how different crediting methods would have performed over the past 10-15 years.
Compare monthly policy charges, cost of insurance rates and surrender charge schedules. Lower upfront costs might mean higher ongoing charges that eat into cash value growth over time.
Choose insurers with AM Best ratings of A- or higher and consistent complaint ratios. Check NAIC complaint indexes to gauge customer satisfaction levels.
Question any illustrations assuming returns above 6-7%. Conservative projections help you understand realistic expectations and avoid underfunding your policy.
The best indexed universal life insurance also depends on your coverage needs. Calculate how much coverage your family would need to maintain their lifestyle without your income, typically 10-12 times your annual salary. Consider outstanding debts like mortgages, future expenses like college tuition and final expenses.
For IUL specifically, higher death benefits mean higher policy charges that can eat into cash value growth. Balance adequate protection with efficient premium use, especially if cash accumulation is a primary goal alongside the death benefit.
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.
| $50,000 | $41 | $490 |
| $100,000 | $82 | $979 |
| $150,000 | $122 | $1,469 |
| $200,000 | $163 | $1,958 |
| $250,000 | $204 | $2,448 |
| $300,000 | $245 | $2,937 |
| $350,000 | $286 | $3,427 |
| $400,000 | $326 | $3,916 |
| $450,000 | $367 | $4,406 |
| $500,000 | $408 | $4,895 |
| $550,000 | $449 | $5,385 |
| $600,000 | $490 | $5,874 |
| $650,000 | $530 | $6,364 |
| $700,000 | $571 | $6,853 |
| $750,000 | $612 | $7,343 |
| $800,000 | $653 | $7,833 |
| $850,000 | $694 | $8,322 |
| $900,000 | $734 | $8,812 |
| $950,000 | $775 | $9,301 |
| $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.
Your actual life insurance costs will differ based on your health rating, the insurer's underwriting guidelines and policy design choices. It will also include both the premiums you pay and internal policy charges that are deducted from your cash value.
Premium flexibility means you can pay more to build cash value faster or pay less during tight budget years, but paying only minimum amounts consistently may cause your policy to lapse if cash values don't grow as expected.
Indexed universal life insurance works best for those who want permanent life insurance with growth potential and can commit to consistent premium payments for 10-15 years or longer. You should have a stable income that allows funding above minimum premium levels, especially in early policy years when surrender charges are highest.
Consider IUL if you've maximized other tax-advantaged accounts like 401(k)s and IRAs and want additional tax-deferred savings with life insurance protection. Business owners often use IUL for key person coverage, buy-sell agreements or executive benefit plans where the tax advantages provide significant value. Tax advantages vary by individual situation. Consult with a qualified tax professional or financial advisor before using life insurance as part of your tax planning strategy.
This type of policy suits people who are comfortable with some market risk but who want downside protection through guaranteed floors. If you're planning for supplemental retirement income, IUL can provide tax-free loans against cash value, but this strategy requires careful monitoring to prevent policy lapse.
High-net-worth individuals use IUL for estate planning, taking advantage of the tax-free death benefit and potential cash value growth. Success requires understanding that IUL policies need active management. They're not "set it and forget it" products.
You should also have realistic expectations about returns. While IUL offers growth potential above traditional whole life insurance, it won't match direct stock market investing during strong bull markets.
Skip IUL if you need simple, predictable coverage. Term life insurance provides more death benefit protection for less money. If you can't commit to consistent premiums for at least 10 years or need access to your cash within the first few years, consider other investments.
IUL's complexity and ongoing management requirements make it unsuitable for those wanting straightforward life insurance coverage.
Successful IUL management requires regular monitoring and adjustments based on policy performance and changing financial circumstances. Annual policy reviews help ensure your coverage stays on track to meet your original goals.
Indexed universal life insurance involves investment risk. Cash value growth depends on market index performance and is subject to caps, floors and fees that vary by insurer. Policy performance is not guaranteed, and insufficient cash value growth may cause your policy to lapse.
IUL policies require active management and consistent funding to perform as designed. Choose a company with strong customer support and digital tools that make monitoring your policy straightforward. The right IUL policy from a reputable insurer can provide valuable financial protection and growth potential, but success depends on realistic expectations and proper long-term planning.
Based on our analysis, Ethos, Protective Insurance, Pacific Life and Legal & General are the best indexed universal life insurance companies in 2025.
We answer common questions about indexed universal life insurance, covering everything from basic mechanics to investment risks and costs.
Indexed universal life 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, but with a guaranteed floor (typically 0%) that protects against losses and a cap 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 policies credit interest to your cash value based on the performance of selected market indexes, subject to caps and floors set by the insurance company. You can typically allocate your cash value between a fixed account earning a guaranteed rate and various indexed accounts. Premium payments above the cost of insurance build cash value, which you can access through tax-free loans. The death benefit remains in force as long as there's sufficient cash value to cover policy charges.
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.
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.
The cost of an IUL policy depends on age, health, coverage amount and funding level. On average, a healthy 40-year-old male nonsmoker pays $82 per month for $100,000 in coverage. A female applicant with the same profile pays $67 per month. Building cash value usually requires higher premiums than the minimum payment. Internal policy fees, cost of insurance charges and index crediting limits also affect long-term affordability.
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.
Ethos is the best indexed universal life insurance company, but Protective Insurance, Pacific Life and Legal & General also offer some of the best IUL policies.
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
Companies earn up to five points in each category with the following weightings:
Why Affordability Gets 50% Weight
Cost structure determines how much of your premium actually builds cash value versus covering fees. Even small differences in administrative charges compound over 20-30 year time horizons, directly impacting your policy's wealth-building potential.
Sample Customer Profiles
We obtained quotes using standardized profiles to ensure accurate comparisons:
We modified profiles by age, gender, health rating and geographic location to understand how pricing varies across customer segments. All premiums reflect our standard profile unless noted otherwise.
Data Sources and Analysis
Our evaluation incorporates cost data from online quotes, AM Best financial strength ratings, customer complaint ratios from the National Association of Insurance Commissioners (NAIC), J.D. Power satisfaction scores and detailed policy feature analysis.
We collected quotes for indexed universal life insurance across multiple coverage amounts and identified pricing patterns that help determine the best companies for different customer needs. This approach reveals which insurers consistently deliver value across various policy sizes and customer profiles.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like 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!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
