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What Is an IUL — and How to Use It for Retirement

By Gerard Ladalardo·Jun 24, 2026· 6 min read

Pensions are fading, markets are volatile, and Americans are living longer. That combination puts real pressure on retirement income — and it's why properly-structured Indexed Universal Life (IUL) policies have become a meaningful piece of many of our clients' plans.

How an IUL Works

An IUL is permanent life insurance with a cash-value account that grows based on the performance of a market index — but with a floor (typically 0%) that protects you from losses. You get market-linked upside without the downside risk.

The cash value can later be accessed through policy loans, which are generally tax-free and don't count against Social Security or Medicare income thresholds.

Where IULs Go Wrong

An IUL is only as good as its design. Overfunded, properly structured, low-cost policies can be exceptional. Underfunded or commission-heavy designs can underperform badly. The difference is in the engineering, not the product.

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