Indexed Universal Life Insurance Cost (2026 Rates)

Indexed universal life (IUL) insurance is permanent life insurance that combines a death benefit with a cash value account whose credited interest is tied to the performance of a market index like the S&P 500. Unlike term life insurance, IUL can remain in force for life if your policy is adequately funded.

IUL premiums are flexible rather than fixed like whole life premiums. You can adjust payments within insurer limits, but the underlying cost of insurance rises with age. Paying too little or receiving lower-than-illustrated cash value growth can require higher payments later to prevent your policy from lapsing.

Based on our analysis of thousands of quotes, indexed universal life (IUL) insurance costs an average of $335 per month for a 40-year-old woman and $408 for a man with $500,000 in coverage. Your actual premium depends on your age, coverage amount, health and smoking status.

Age and smoking produce much larger differences in our rate data. A 60-year-old with the same health profile and coverage pays $866 per month for women and $1,059 for men, while a 40-year-old smoker pays $537 for women and $649 for men.

IUL rates rise sharply with age. A 40-year-old with average health pays $335 per month for women and $408 for men for $500,000 in coverage. At age 60, those averages increase to $866 for women and $1,059 for men, about 159% more for both profiles.

Rate increases accelerate at older ages. From age 60 to 70, women's average monthly rates rise by $724, from $866 to $1,590, while men's rates rise by $888, from $1,059 to $1,947. Buying earlier can greatly reduce the lifetime cost of permanent coverage.

* Rates shown are for nonsmokers with average health and $500,000 in coverage.

Smoking increases the average cost of an IUL policy with $500,000 in coverage by 60% at age 40. A woman who smokes pays $537 per month compared with $335 for a nonsmoker, a difference of $202 per month or $2,424 per year. For men, the average rises from $408 to $649, adding $241 per month or $2,892 per year.

Most insurers require applicants to be tobacco-free for at least 12 months before qualifying for nonsmoker underwriting. If you've recently stopped using tobacco, ask each insurer when you may qualify for reconsideration, because eligibility rules differ by carrier.

* Rates shown are for smokers in otherwise average health with $500,000 in coverage.

Health classification affects IUL rates, but the difference in our age-40 data is smaller than the smoking difference. A 40-year-old woman with poor health pays an average of $383 per month for $500,000 in coverage, $48 or 14% more than the $335 average for a woman in average health. For men, rates increase from $408 to $461, a difference of $53 or 13%.

Health conditions such as diabetes, heart disease and high blood pressure can affect your underwriting classification and increase your premium. Compare quotes from multiple insurers, as underwriting guidelines vary and some carriers are more favorable toward certain medical conditions.

* Rates shown are for people with poor health and $500,000 in coverage.

Higher death benefits increase your IUL premiums. For a 40-year-old woman in average health, increasing coverage from $500,000 to $1 million raises the average monthly rate from $335 to $670, a $335 or 2x increase. For men, the same increase in coverage raises the average from $408 to $816.

At $1.5 million in coverage, average rates reach $1,005 per month for women and $1,224 for men. Choosing a death benefit that matches your actual insurance need can limit the amount going toward insurance costs and leave more room in your budget to adequately fund the policy.

* Rates shown are based on 40-year-olds with average health.

Your IUL cost depends on both your underwriting profile and how the policy is structured. In our rate data, age and tobacco use create larger differences than health classification for the profiles analyzed.

Indexed universal life insurance is one of the more expensive types of life insurance because you're paying for permanent coverage and a cash value account in addition to a death benefit. In our analysis, a 40-year-old pays an average of $335 per month for women and $408 for men for a $500,000 policy. Cost increase with age, smoking and larger coverage amounts.

Compare both premiums and policy illustrations when shopping for IUL plans because insurance charges, funding requirements and projected cash value can differ even when two policies have the same death benefit.