Free Iul Calculator

Free IUL Policy Projection Calculator

function calculateIULProjection() { var currentAge = parseFloat(document.getElementById('currentAge').value); var annualPremium = parseFloat(document.getElementById('annualPremium').value); var initialDeathBenefit = parseFloat(document.getElementById('initialDeathBenefit').value); var assumedCapRate = parseFloat(document.getElementById('assumedCapRate').value); var floorRate = parseFloat(document.getElementById('floorRate').value); var yearsToProject = parseFloat(document.getElementById('yearsToProject').value); if (isNaN(currentAge) || isNaN(annualPremium) || isNaN(initialDeathBenefit) || isNaN(assumedCapRate) || isNaN(floorRate) || isNaN(yearsToProject) || currentAge <= 0 || annualPremium <= 0 || initialDeathBenefit <= 0 || yearsToProject <= 0) { document.getElementById('totalPremiumsResult').innerText = '$0.00'; document.getElementById('projectedCashValueResult').innerText = '$0.00'; document.getElementById('initialDeathBenefitResult').innerText = '$0.00'; alert('Please enter valid positive numbers for all input fields.'); return; } var currentCashValue = 0; var totalPremiumsPaid = 0; for (var i = 0; i < yearsToProject; i++) { currentCashValue += annualPremium; totalPremiumsPaid += annualPremium; var growthRateDecimal = assumedCapRate / 100; var floorRateDecimal = floorRate / 100; var potentialGrowth = currentCashValue * growthRateDecimal; var guaranteedFloorGrowth = currentCashValue * floorRateDecimal; var actualCreditedGrowth = Math.max(guaranteedFloorGrowth, potentialGrowth); currentCashValue += actualCreditedGrowth; } document.getElementById('totalPremiumsResult').innerText = '$' + totalPremiumsPaid.toFixed(2); document.getElementById('projectedCashValueResult').innerText = '$' + currentCashValue.toFixed(2); document.getElementById('initialDeathBenefitResult').innerText = '$' + initialDeathBenefit.toFixed(2); } // Initial calculation on page load for default values window.onload = calculateIULProjection;

Understanding Indexed Universal Life (IUL) Insurance

Indexed Universal Life (IUL) insurance is a type of permanent life insurance that offers a death benefit, a cash value component, and the potential for cash value growth tied to a stock market index, such as the S&P 500, without directly investing in the market.

How IUL Works

An IUL policy has two main components: a death benefit and a cash value account. A portion of your premium payments goes towards covering the cost of insurance (mortality charges, administrative fees) and maintaining the death benefit, while the remainder is allocated to the cash value.

• Cash Value Growth: The cash value grows based on the performance of a chosen market index. Instead of direct investment, the insurance company credits interest to your cash value based on a formula linked to the index's performance.
• Cap Rate: This is the maximum percentage of growth your cash value can be credited in a given year, regardless of how high the index performs. For example, if the cap rate is 10% and the index grows by 15%, your cash value will only be credited 10%.
• Floor Rate: This is the minimum percentage of growth your cash value will receive, typically 0% or 1%. This floor protects your cash value from market downturns, meaning you won't lose money due to negative index performance.
• Policy Charges: IUL policies come with various fees and charges, including mortality charges (cost of the death benefit), administrative fees, and rider costs. These charges are deducted from the cash value.

Benefits of IUL

• Death Benefit Protection: Provides a tax-free death benefit to your beneficiaries.
• Cash Value Accumulation: Potential for tax-deferred cash value growth, which can be accessed later in life.
• Tax-Free Income Potential: Policyholders can typically access their cash value through tax-free loans or withdrawals during retirement, provided the policy is structured and managed correctly.
• Market Protection: The floor rate protects your cash value from market losses.
• Flexibility: Offers flexible premium payments and death benefit adjustments.

Important Considerations and Risks

• Complexity: IUL policies can be complex to understand, with various moving parts like cap rates, floor rates, participation rates, and multiple fees.
• Policy Charges: High internal costs and fees can significantly impact cash value growth, especially in the early years.
• Illustrative Projections: The projections provided by insurance companies (and this calculator) are based on assumptions (like the assumed cap rate) and are not guarantees. Actual performance can vary widely.
• Lapse Risk: If cash value growth is lower than projected or policy loans are not managed properly, the policy could lapse, leading to significant tax consequences.
• Surrender Charges: Early termination of the policy can result in substantial surrender charges, reducing or eliminating your cash value.

How to Use This IUL Policy Projection Calculator

This calculator provides an illustrative projection of your IUL policy's potential cash value accumulation based on your inputs. Please note the following:

• Current Age: Your age at the time of policy inception.
• Annual Premium: The amount you plan to pay into the policy each year.
• Initial Death Benefit: The initial coverage amount your policy provides.
• Assumed Indexed Cap Rate (%): This is a crucial input. It represents the hypothetical maximum annual interest credited to your cash value, reflecting an assumed net growth rate after policy charges and fees. Actual cap rates vary by insurer and market conditions.
• Indexed Floor Rate (%): The minimum annual interest rate your cash value will earn, protecting against market losses.
• Years to Project: The number of years you want to see the policy's cash value grow.

The calculator will estimate the total premiums you would pay and the projected cash value at the end of the projection period. The initial death benefit is also displayed as a key feature of the policy.

Disclaimer

This Free IUL Policy Projection Calculator is for illustrative purposes only and should not be considered financial advice. It uses simplified assumptions for cash value growth and does not account for all policy specifics, such as detailed mortality charges, administrative fees, rider costs, surrender charges, or specific indexing strategies (e.g., participation rates, spreads). Actual IUL policy performance can vary significantly based on market conditions, insurer performance, policy structure, and individual circumstances. Always consult with a qualified financial advisor and review the specific policy illustrations provided by an insurance company before making any purchasing decisions.