Educational examples · Not an insurance illustration
What funding an IUL typically looks like, age by age
Indexed universal life has no sticker price — what it costs depends on how the policy is designed. These are educational examples of what monthly funding around a target-premium design typically looks like, shown with the mechanics and the honest limits, so you know what you are looking at before you ever talk to anyone.
Important educational disclaimer — please read
These are illustrative examples only for educational and discussion purposes. They are not insurance quotes, not offers of insurance, and not guarantees of rates, credits, or availability. Unlike our term-life and mortgage-protection sample pages, these figures are NOT from our own reference tables — they are assembled from publicly available 2026 market rate surveys.
- Actual funding requirements depend on your exact age, gender, health, tobacco use, state of residence, carrier underwriting guidelines, death benefit amount, policy design, and many other factors.
- Ranges shown are typical monthly funding around a target-premium design for non-smokers in average health. Minimum-funded designs run lower (with materially higher lapse risk); maximum-funded designs run intentionally higher.
- This page shows no growth projections on purpose. What a policy might credit over decades depends on caps, participation rates, charges, and index behavior that no one can promise in advance.
- Policy loans and withdrawals reduce the death benefit until repaid and can have tax consequences if a policy lapses or is over-funded past IRS limits — tax questions belong with a licensed tax professional.
- These illustrations do not include any company logos, product names, or carrier information. They are designed for general consumer education only.
- Always obtain a personalized, carrier-specific illustration from a licensed insurance professional. Insurance is subject to underwriting approval and state regulations.
The mechanics, in plain language
- An IUL is permanent life insurance with a flexible premium. Each payment first covers the cost of insurance and policy fees; what remains goes into the cash value account.
- The cash value earns interest credits linked to a market index, subject to caps and participation rates set by the policy. In down-market years the credit is typically limited by a policy floor (often zero) — but fees and cost-of-insurance charges still apply, so the account value can still decrease net of charges.
- Because the premium is flexible, the same policy can be minimum-funded (cheapest, but fragile), target-funded (designed to carry the policy as illustrated), or maximum-funded up to IRS limits (the cash-value-focused design). The ranges on this page sit around target funding.
- Cost-of-insurance charges rise with age every year. A policy that is underfunded in the early years can see those rising charges consume the cash value later — this is how IULs lapse.
- You can access cash value through withdrawals or policy loans; unpaid loans plus accrued interest reduce the death benefit your family receives.
Typical funding, by age band
Typical monthly funding around a target-premium design · non-smoker, average health · $250,000 and $500,000 death benefits
| Age band | $250,000 benefit | $500,000 benefit |
|---|---|---|
| 30–39 | $105–195 /mo | $210–380 /mo |
| 40–49 | $155–290 /mo | $305–575 /mo |
| 50–59 | $200–480 /mo | $400–960 /mo |
| 60–65 | $380–750 /mo | $760–1,500 /mo |
Illustrative 2026 market ranges around a target-premium design, non-smoker, average health. Minimum-funded designs run lower with materially higher lapse risk; maximum-funded designs run intentionally higher. Your underwritten design will be different.
What an IUL is NOT
- Not a stock market investment. Caps and participation rates limit the upside; the floor limits index losses but does not stop fees and insurance charges from reducing the account.
- Not a promise of growth. Credited rates, caps, and charges change over time. Regulators limit what an illustration may assume, and even a compliant illustration is an educational example — never a promise.
- Not a set-it-and-forget-it product. Underfunded IULs lapsing in later years is the most common way this product disappoints people. Funding discipline is the strategy.
- Not for everyone. If the budget only comfortably covers protection, level term with Living Benefits usually does that job at a fraction of the cost.
How to read the numbers
- Every range is a typical monthly funding level around a target-premium design — the amount a policy is built to receive so it carries as designed. It is not a quoted price.
- The same death benefit can legitimately cost less (minimum funding, fragile) or much more (maximum funding, cash-value-focused). Where you fund inside that spectrum is a design decision made with a licensed agent.
- Non-smoker, average health assumed. Health ratings and tobacco use move these numbers substantially.
- Past the mid-60s, new IUL policies get expensive and carrier options narrow — at that point other products usually fit better, which is exactly what the free call sorts out.
- These are starting-point educational samples only. Your underwritten number will be different.
Key takeaways
- IUL funding is a design choice, not a price tag — the honest question is never "what does IUL cost" but "what does the design I need cost to carry."
- Age moves the numbers fast: the same $500,000 benefit that targets around $210–380 a month in the 30s targets roughly four times that in the early 60s.
- The floor is real but so are the charges — a 0% credit year is still a down year for the account after fees.
- Most IUL disappointment traces to underfunding, not to the index. If the target premium does not fit the budget, a smaller design or plain term protection is usually the better fit — exactly what the licensed conversation sorts out.
- A retirement-focused IUL (sometimes called a LIRP) only makes sense after cheaper foundations — emergency fund, employer match, core protection — are in place.
- These numbers are educational market samples only. Your underwritten design requires a full application, underwriting, and a carrier-specific illustration.
Final compliance reminder
This entire page is for general educational purposes only. It does not constitute an offer, solicitation, or recommendation of any insurance product. No specific insurance company, product name, or agent is endorsed or identified. Rates and availability are subject to change and to full underwriting. Living benefits have specific definitions, waiting periods, maximum percentages, and conditions that vary by policy. Always review the actual policy illustration and contract language provided by a licensed producer. State insurance laws govern all sales. This material is not a substitute for personalized advice from a licensed insurance professional.
These samples are the starting point — the personalized illustration on your own numbers always comes from a licensed agent.
Want the deeper education first? Read what a LIRP actually is and who should NOT use the cash-value strategy. If the disqualifiers sound like you, believe them.