We discussed whole life vs. Indexed Universal Life in a previous post, and now we will address indexed universal life insurance cost, also known as IUL.
As a consumer, you know that one of the most important aspects is the cost. So even though there are other significant variables in an IUL, the cost is on top of that list.
First, we need to consider two simple questions for anyone looking for Index Universal Life:
- How much does IUL cost?
- How much coverage do I need?
In reality, these two questions will help determine what direction you should take when buying the right IUL policy.
Let’s go over some of the important considerations.
Factors that Impact Your Cost
There are no deals or discounts on life insurance. However, what you can do is pick the right company for your situation.
Every company has different standards on who they want as a client. So it is the job of your life insurance broker to know who to pick on your behalf.
Here are the factors that affect your Indexed Universal life insurance premium:
- Age – Just like any life insurance, rates are cheaper when you are young. The older you get, the more you will pay.
- Health – health plays a significant part in cost. The healthier you are, the cheaper the policy.
- Smoking – Are you a smoker? Tobacco rates will significantly increase your cost.
- Sex – Women have much lower rates than men. Statistically, they live longer than men.
- Exam/no exam – Some companies offer no exam indexed universal life insurance. If you do not want to do a medical exam, you will pay a higher premium.
- Insurance Company – The company you pick. As we already mentioned, each company has different standards and ratings.
- Policy Details – The details of each policy: Caps, Floors, Participation Rate & Indexing Method.
Since there are so many factors that impact your cost, including the company and your overall personal and health profile, you won’t know how much you’ll be asked to pay until you receive quotes from multiple providers.
Average Indexed Universal Life Insurance Cost
We are going to give you some average indexed life insurance costs for different ages next. However, the purpose of the charts is to give you an idea of the price ranges, not to be a quote.
Please remember all of the prices can change based on all of the factors we already mentioned. For our charts we use an A rated company with good pricing and product.
IUL $250,000 cost, excellent health & non-smoker
Male Quote
| Age | Monthly Price | Cash Value @ 65 |
| 30 | $164.17 | $222,075 |
| 35 | $205.42 | $190,088 |
| 40 | $258.33 | $158,738 |
| 45 | $336.04 | $129,061 |
| 50 | $435.66 | $93,052 |
| 55 | $584.75 | $63,880 |
| 60 | $777.91 | $37,970 |
Female Quote
| Age | Monthly Price | Cash Value @ 65 |
| 30 | $145.41 | $193,841 |
| 35 | $180.83 | $166,248 |
| 40 | $225.83 | $136,521 |
| 45 | $292.25 | $100,384 |
| 50 | $376.00 | $87,364 |
| 55 | $501.92 | $63,016 |
| 60 | $665.00 | $39,358 |
As you can see in the previous tables, there is a significant increase in price if you wait a few years. Also, as you have less time to accumulate cash, the cash value is lower. So if you are considering an IUL, you shouldn’t wait as the most significant factor for cost is age.
The reason that we created the table is that we get the question very often:
How much does Indexed Universal Life insurance cost?
Most of the time, the answer to the question is: It Depends…
However, we wanted you to have a starting point to understand the cost. There are still many factors to consider before you purchase, but now you have a base.
If you would like to get a whole life insurance quote, use our whole life insurance quoter:
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Best Indexed Universal Life & The Cheapest
Indexed Universal Life Non Medical Cost
Some of our clients do not want to do a medical exam. So they opt for a non-medical IUL. We will show you a few examples of IUL’s without Medical exam:
- Simplified Issue
- Guaranteed Issue
Pros
In a non medical life insurance, you will not have to do a blood and urine test. The insurance company will still look into your medical history if it’s necessary. However, their rating will be based on answering a few health questions.
Cons
You will end up paying a little more than if you took the medical option.
Who Should Do It?
If your health is average, and you are not in excellent shape, it may be a good option for you. In addition, if you haven’t been to the doctor in a while, it may be better just to go the non-medical route.
Cost Of Non Medical IUL
As we did previously here is a table for your reference. This is not an exact quote but it will help you get an idea:
Male $250,000 Non Medical IUL Cost
| Age | Monthly Premium: | Cash Value @ 65: |
| 30 | $179.08 | $180,507 |
| 35 | $215.92 | $167,033 |
| 40 | $266.16 | $132,791 |
| 45 | $323.66 | $109,300 |
| 50 | $417.85 | $82,720 |
| 55 | $526.29 | $58,063 |
Female $250,000 Non-Medical IUL Cost
| Age | Monthly Premium: | Cash Value @ 65: |
| 30 | $154.25 | $155,805 |
| 35 | $188.12 | $136,764 |
| 40 | $229.60 | $117,814 |
| 45 | $289.92 | $96,960 |
| 50 | $361.32 | $77,176 |
| 55 | $458.36 | $54,761 |
A non-medical IUL is a great product that can work for many clients. If you would like a quote go here:
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Best IUL & The Cheapest
Price Is Not Everything
Unlike term insurance, IUL is an asset with many moving parts. There are many variables you need to consider like:
- Cap Rate
- Participating Rate
- Floor
- Indexing Method
These variables can turn a cheap IUL into a bad long-term investment. But, so many times, paying a bit more will get you significant cash value growth over the long run. It is not easy to compare all these variables; that’s why our agents can help you get the best quote.
In addition, you should consider overfunding an IUL to get more cash value growth.
Final Note
Now you should have a better idea of IUL prices as you can see rates go up significantly as you age. So make sure you lock in your rates as soon as possible.
However, as we mentioned, price is not the whole story, so make sure you request a quote from multiple companies from an expert.
If you want a quote from our experts, go here: Give Me An IUL Quote
You may want to go over our article: Whole Life Insurance Cost
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Best IUL & The Cheapest
Frequently Asked Questions
What makes indexed universal life insurance so unique?
The indexed part makes it unique. You have upside potential on an index like the S&P 500. But also it means that the policy comes with a minimum guaranteed rate of interest so that you won’t lose your money. These rates of interest aren’t fixed instead, these are based on an index chosen by the insurer.
What is the difference between term life insurance and indexed life insurance?
A term life insurance is more affordable and offers financial peace of mind. You don’t need to worry about the rate of interest, cash values, indexes, etc.
On the other hand, an indexed universal life insurance policy is similar to a whole life insurance. It has a cash value component that acts as a saving medium at a return rate set by the performance of an index.
What is a no-lapse guarantee?
A no-lapse guarantee ensures that your policy will remain in force even if the cash value drops to zero.
What are the benefits of indexed universal life insurance?
Here are some of the benefits:
- Your interest rate is based on a market index chosen by the insurer instead of having a fixed interest rate.
- You can use your cash value account money to pay your premiums.
- Guarantee minimum interest rate is paid even if the index produces lower returns.
- You can adjust death benefits at any time.
- You can make limited withdrawals from the cash-value account. However, it will reduce the death benefit.
I have a USAA UL policy issued in 1982. The guaranteed interest rate is 4.5 %. I have overfunded this policy almost from inception. Could y evaluate this policy and provide recommendations for going forward.
TY,
david robinson
It would be our pleasure! Could you please email us your annual policy statement (if you have it) at [email protected]? If don’t have it, just email us what you know and we will take it from there.