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Free IUL Calculator:
Project Your Tax-Free Retirement Income
Enter your age and monthly contribution to see how an IUL policy grows your wealth — and what it pays you in retirement.
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How the IUL Calculator Works
This free indexed universal life calculator projects the potential cash value and tax-free retirement income of a properly structured Indexed Universal Life (IUL) insurance policy based on your current age and monthly premium contribution. Results assume retirement at age 65, an 8% average annual crediting rate, a 0% market floor, and a 6% annual policy loan draw rate in retirement.
What Is an IUL?
An IUL (Indexed Universal Life) is a permanent life insurance policy that builds tax-free cash value linked to a stock market index like the S&P 500. It has a 0% floor that protects against market losses, no IRS contribution limits, and allows completely tax-free access to cash value through policy loans in retirement. The result is retirement income that does not appear on your tax return and is not subject to RMDs.
How accurate is this IUL calculator?
This calculator provides an educational estimate based on an 8% average annual crediting rate, a 0% market floor, and a 6% annual policy loan draw rate in retirement. Real policy performance varies by carrier, health profile, age at inception, and policy structure. Use these numbers as a starting point — a licensed IUL specialist can produce a formal carrier illustration based on your exact situation within 24 hours.
How Is Tax-Free Income Calculated?
In retirement, IUL policyholders access cash value through policy loans rather than direct withdrawals. The IRS does not classify loans as taxable income, meaning there is no federal income tax on distributions. This calculator applies a 6% annual draw rate to the projected cash value — a sustainable withdrawal rate that allows the policy to continue growing throughout retirement.
IUL vs a Savings Account
The comparison chart above shows why a savings account is not a retirement strategy. At 0.5% interest, a savings account barely keeps pace with inflation. Every year the real purchasing power of your balance declines. An IUL linked to the S&P 500 captures equity market growth while the 0% floor prevents losses in down years — producing a dramatically larger balance at retirement from the same monthly contribution.
What Affects Real IUL Performance?
This IUL calculator uses simplified assumptions. Real IUL performance depends on your age and health at policy inception, the specific carrier and policy structure, the index cap rate offered by the carrier, how consistently premiums are funded, and how the policy is structured relative to the IRS's modified endowment contract (MEC) limits. A licensed IUL specialist can produce a formal illustration based on your exact situation.
About the Author
Edwin Morales
Edwin Morales is a licensed insurance professional specializing in Indexed Universal Life strategies for high-income earners, self-employed individuals, and entrepreneurs across all 50 states. He focuses on helping clients build tax-free retirement income through properly structured IUL policies, with education-first guidance and no-pressure analysis.
Disclaimer: This IUL calculator is for educational and illustrative purposes only. Results assume an 8% average annual crediting rate with a 0% market floor and a 6% annual policy loan draw rate. Actual IUL performance varies based on age, health, carrier, policy structure, premium funding, index cap rates, and market conditions. This is not a guarantee of future results. Tax treatment of policy loans depends on proper policy structuring. Always consult a licensed financial professional before making financial decisions.
IULBenefits.com | What Is an IUL? | For educational purposes only.
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