acalculator

How much could my IUL policy grow?

Type the yearly premium, how long you pay it, the index return you expect, and the policy’s cap, floor, participation rate and charges. The IUL calculator shows the credited rate, the cash value year by year, and the same premiums at the full index return.

Your numbers

Index returns go up and down; a negative year is credited at the floor.
Cash value at the end
$688,050.45

$10,000.00 a year at a 7% credited rate grows to a cash value of $688,050.45.

Credited rate each year
7%
Premiums paid
$200,000.00
Interest credited
$576,113.51
Charges taken
$88,063.07
Same premiums at the index return
$862,894.42
Years
30

Cash value at the end: $688,050.45. $10,000.00 a year at a 7% credited rate grows to a cash value of $688,050.45.

How does the cash value compare with the index?

What does each policy year look like?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Estimates the cash value of an indexed universal life (IUL) policy from the premiums, the index return, the cap, the floor, the participation rate and the yearly charges, against the same money at the index return.

Example with the default inputs (Premium each year $10,000.00, Years you pay premiums 20, Years to project 30, Index return each year 7%, Cap rate 10%, Floor rate 0%, Participation rate 100%, Yearly policy charges 1%): $10,000.00 a year at a 7% credited rate grows to a cash value of $688,050.45.

Method: rate = max(floor, min(cap, participation × index)); each year: start = value + premium; credit = start × rate; charge = (start + credit) × charges; value = start + credit − charge.

  • The index return, cap, floor, participation rate and charges stay the same every year. Insurers can change caps and participation rates, and real index returns vary, which a constant return does not show.
  • Charges are one yearly percent of the cash value. Real cost of insurance rises with age and is charged monthly; surrender charges, loans and withdrawals are not included.
  • This is an estimate, not an insurance illustration. Ask the insurer for an illustration that follows Actuarial Guideline 49-A.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Premium each year $10,000.00, Years you pay premiums 20, Years to project 30, Index return each year $7.00, Cap rate 10%, Floor rate 0%, Participation rate 100%, Yearly policy charges $1.00 gives Cash value at the end $688,050.45, Credited rate each year 7%, Premiums paid $200,000.00, Interest credited $576,113.51, Yearly policy charges $88,063.07, Index return each year $862,894.42.Source: Credit rule: FINRA, The Complicated Risks and Rewards of Indexed Annuities (participation rates, interest caps and floors limit the index-linked return), https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities (retrieved 2026-10-03); an estimate, not an illustration: National Association of Insurance Commissioners, Life Insurance Illustrations (Actuarial Guideline 49-A limits the rates an indexed universal life illustration may show), https://content.naic.org/insurance-topics/life-insurance-illustrations (retrieved 2026-10-03)
  2. Premium each year $5,000.00, Years you pay premiums 10, Years to project 10, Index return each year $12.00, Cap rate 7%, Floor rate 0%, Participation rate 100%, Yearly policy charges $0.00 gives Credited rate each year 7%, Cash value at the end $73,918.00, Index return each year $98,272.92.Source: FINRA’s example: an index up 12% with a 7% cap credits 7%: FINRA, The Complicated Risks and Rewards of Indexed Annuities (participation rates, interest caps and floors limit the index-linked return), https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities (retrieved 2026-10-03)
  3. Premium each year $1,000.00, Years you pay premiums 1, Years to project 2, Index return each year -$10.00, Cap rate 10%, Floor rate 0%, Participation rate 100%, Yearly policy charges $0.00 gives Credited rate each year 0%, Cash value at the end $1,000.00, Index return each year $810.00.Source: The floor holds a −10% index year at 0%: FINRA, The Complicated Risks and Rewards of Indexed Annuities (participation rates, interest caps and floors limit the index-linked return), https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities (retrieved 2026-10-03)
  4. Premium each year $1,000.00, Years you pay premiums 3, Years to project 3, Index return each year $8.00, Cap rate 10%, Floor rate 1%, Participation rate 50%, Yearly policy charges $2.00 gives Credited rate each year 4%, Cash value at the end $3,116.68, Yearly policy charges $126.41.Source: A 50% participation rate credits half of 8%: FINRA, The Complicated Risks and Rewards of Indexed Annuities (participation rates, interest caps and floors limit the index-linked return), https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities (retrieved 2026-10-03)

How it works

All rates are percents. The credited rate each year is

c = max(floor, min(cap, participation × index return ÷ 100))

and it is the same every year. The floor must not be above the cap. Starting from a cash value of $0, for each policy year k = 1 to the years shown:

  • premium = the yearly premium in the years you pay it (k ≤ years you pay), otherwise $0. It goes in at the start of the year.
  • start = cash value + premium
  • interest credit = start × c ÷ 100
  • charges = (start + credit) × yearly charges ÷ 100
  • cash value = start + credit − charges
  • at the index return = (last year’s index value + premium) × (1 + index return ÷ 100), with no cap, floor or charges.

The results are the last cash value, the credited rate, the premiums, credits and charges added up, and the last index value.

Rules

  • Premium from $0 to $10⁸; 1 to 80 years each; index return from −50% to 50%; cap from 0% to 50%; floor from −20% to 20% and not above the cap; participation from 0% to 300%; charges from 0% to 20%.

Assumptions

  • Rates stay the same every year; real index returns and insurer caps change.
  • Charges are one yearly percent of the cash value. Surrender charges, loans and withdrawals are not included. This is an estimate, not an illustration or advice.

Worked examples by hand

The default: $10,000 a year for 20 years, 30 years shown, 7% index, 10% cap, 0% floor, 100% participation, 1% charges. c = max(0, min(10, 7)) = 7%. Year 1: start = 10,000; credit = 700; charges = 10,700 × 1% = 107; value = 10,593. Year by year this reaches $688,050.45 after 30 years, with $200,000 of premiums, $576,113.51 credited and $88,063.07 of charges. The index line ends at $862,894.42.

FINRA’s cap example: 12% index, 7% cap, $5,000 a year for 10 years, no charges. c = 7%. Value = 5,000 × 1.07 × (1.07¹⁰ − 1) ÷ 0.07 = $73,918.00; at 12% it is $98,272.92.

A falling year: −10% index, 0% floor, $1,000 once, 2 years. c = max(0, −10) = 0%, so the value stays $1,000; the index line is 1,000 × 0.9² = $810.

50% participation: 8% index, 10% cap, 1% floor, 2% charges, $1,000 a year for 3 years. c = max(1, min(10, 4)) = 4%. Year 1: 1,000 × 1.04 × 0.98 = 1,019.20; year 2: 2,019.20 × 1.04 × 0.98 = 2,057.97; year 3: 3,057.97 × 1.04 × 0.98 = $3,116.68. Charges add up to $126.41.

Other questions people ask

How does an IUL credit interest?

The credit follows a stock index but is limited. The participation rate sets the share of the index return used, the cap sets the most credited in a year, and the floor the least. Credited rate = max(floor, min(cap, participation × index return)).

What does the cap do?

It limits a strong year. FINRA’s example for indexed products: if the index rises 12% and the cap is 7%, the credit is 7%. At $5,000 a year for 10 years that gives $73,918 against $98,273 at the full 12%.

What does a 0% floor mean?

A year when the index falls is credited at the floor instead of the loss. With a 0% floor, a −10% index year credits 0%, so a $1,000 premium stays $1,000 before charges.

Why do charges matter so much?

The cost of insurance and policy fees come out of the cash value every year. In the default, 1% a year takes $88,063 over 30 years, and the cash value ends at $688,050 against $862,894 at the index return.

Can the insurer change the cap or participation rate?

Some contracts let the insurer change caps, participation rates and fees from time to time, FINRA warns, which can lower your return. Read the policy for the guaranteed minimums.

Is this the same as an insurer’s illustration?

No. It uses one constant return and one charge rate. An illustration follows the NAIC’s Actuarial Guideline 49-A limits and shows the policy’s real charges, surrender charges and death benefit.