Indexed universal life insurance is a type of permanent life insurance that pays interest based on the movements of external index's from the beginning of a policy period to the end of the policy period ( 1 year or as long as 3 years) It's a subset of universal life insurance, which means policyholders can change payments and benefits as needed.
The cash accounts tied to an indexed universal life policy can grow quickly, but they can also see years without any growth. Other accounts offer trigger guarantees of 6%, or interest accounts of 4%. Eventually, you may even grow the account to the point you can stop making premium payments. For many these can be designed to provide free-of-tax loans which do not need to be paid back and can be used successfully in supplementing retirement income Additionally, if designed and managed correctly, a death benefit can be provided to the beneficiary tax-free in most cases.