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It is permanent life insurance with a cash value account. The cash value is credited based on the movement of a market index such as the S&P 500, but your money is never invested in the market itself. That structure is what allows the insurer to guarantee a floor.

The floor is the minimum the policy will credit in a year — usually 0%, meaning a market crash credits you nothing rather than losing your money. The cap is the maximum credited in a year, often 9–12%. You trade the top of the market for protection at the bottom.

Neither is universally better; they solve different problems. A 401(k) with an employer match is hard to beat for matched dollars. An IUL adds tax-free access before 59½, no contribution limits, a death benefit, and no losing years. Most of our clients use both.

Distributions are taken as policy loans against the cash value. Under current tax law, loans from a properly structured, non-MEC life insurance contract are not treated as taxable income. Tax law can change, and this is not tax advice — we work alongside your CPA.

It is a life insurance policy sized to your mortgage balance and term. If you pass away, the benefit is paid tax-free to your family, who can use it to clear the loan and stay in the home. Many of our policies also include living benefits for critical or chronic illness.