Indexed universal life insurance (IUL) is a type of permanent life insurance. It stays in force as long as you stay current on your premium payments or until you reach the maturity date specified in the policy. Many IULs mature when the insured person reaches age 121.

IUL has a cash value component where the gains are tied to an index like the S&P 500.

While the cash value growth is linked to the index, the insurance company actually invests in things like bonds and mortgages.

Universal life insurance offers the added flexibility to change your premium payments, but only within specified limits. The main difference between indexed universal life insurance and other universal life insurance policies is how cash value accumulates.