Indexed Universal Life (IUL) Insurance is mostly for individuals who want to provide financial security for loved ones at an insured’s demise and a cash value tied to a market index, without loss. The cost of IUL insurance in Texas is largely affected by factors like age, gender, health, lifestyle, coverage amount. Generally men tend to pay higher premiums than women because they have shorter life expectancy, thereby posing higher risks to insurers than women. Also, individuals who use tobacco and engage in dangerous activities might be required to pay more on their IUL policy. Insureds can choose to pay their premiums through different payment options like regular, single, and limited premium payment options. With regular premium payment, insureds would have to pay periodically or regularly, which could be monthly, quarterly, or yearly, based on their preference. Single premium payment requires that the insured makes a one-time full, upfront premium payment. Insureds that prefer to use the limited premium payment option are expected to pay the premium of their IUL policy within a specific age or period.
To save on IUL policy:
Try getting your IUL Insurance at a younger age.
Purchase your policy when you are healthy.
Shop around and compare quotes from multiple insurers.
Take advantage of available discounts.
Look for a knowledgeable life insurance agent who has access to multiple quality insurers to choose from. Such agents can also use their experience as leverage to help you with the best possible riders and options available for your needs, thereby helping you save money and get adequate coverage for your loved ones.
How much you should pay for Indexed Universal Life (IUL) Insurance in Texas differs from insurer to insurer. Also, IUL premium costs are influenced by several factors such as tobacco use, age, gender, health, lifestyle, occupation, and the coverage amount. For example, individuals who use tobacco, have severe health conditions, have an unhealthy lifestyle, and are older will purchase the IUL policy at a higher price than those buying the policy at a young age, are in good health condition, and are living a healthy lifestyle. In addition, insurance companies charge higher rates for men than women assuming both parties are healthy. For instance, insurers in Texas can have a monthly charge of between $96 to $122 for men between ages 25 to 35 years old who are in good health for a $250,000 IUL coverage. On the other hand, women of the same age and health status can be required to pay between $71 to $96 for the same IUL coverage amount.
Always discuss your needs with licensed insurance agents, who are able to assess your needs and provide you with professional advice tailored to your specific needs.
There are several factors insurers in Texas put into consideration to determine the cost of IUL insurance. Such factors include:
Age: IUL premiums typically increase with age. An older person (60 year old) might be asked to pay three times the amount a 20 year old will pay when requesting an IUL policy. Hence, it is better to get an IUL coverage at a young age to benefit from lower premiums and have sufficient time to build cash value.
Coverage amount: the cost of IUL insurance is also affected by the amount of coverage you need. For instance, if you are only seeking $50,000 in IUL coverage, you will likely pay far less than you would for a policy that provides a $2,000,000 death benefit upon your demise.
The type of coverage: IUL policies come with several options. If you go for a comprehensive policy you might likely pay more for an IUL policy.
Gender: Women tend to have a longer life expectancy than men, which affects the amount each gender pays for IUL insurance. For instance, a man of similar age and health with another woman may be required to pay more to get a policy.
Job: the kind of work you do can impact the amount you pay for IUL insurance. For instance, if you are involved in a high risk occupation like construction or war reporting that makes you face daily hazards compared to an office worker you might pay a bit more for an IUL insurance.
Tobacco use: about 7 million tobacco users die yearly from tobacco use, and over 14% of Texas adults (>3 million residents) smoke. Due to this life insurance companies charge higher premiums for tobacco users.
Lifestyle: the way you live your life can also determine the cost of your IUL policy. The risks associated with the activities you engage in can make insurers charge more in premiums. For example, you may pay more for IUL policy if you drink alcohol regularly or participate in high-risk activities.
In Texas, the average cost of IUL insurance differs by life insurance providers, even for the same policy type and coverage. However, on a general note, various factors like age, gender, lifestyle, and health influence the cost of IUL policy. Therefore, you should consider using the services of an insurance agent to get an IUL policy at a reasonable rate. Insurance agents can use their experience as leverage to help you with the best possible riders, living benefits, and options available for your needs, thereby helping you save money and get adequate coverage for your loved ones.
|Estimated Indexed Universal Life (IUL) Costs in Texas
(Male, Preferred Plus Rating, Non-Smoker)
|Total Spent in Premiums over 20 years
|Paid in by Age 49
|$50 - $60
|$600 - $700
|$12,000 - $14,000
|$290 - $340
|$3,500 - $4,000
|$70,000 - $80,000
|$540 - 600
|$6,500 - $7,000
|$130,000 - $140,000
|Paid in by Age 89
|$165 - $250
|$2,000 - $3,000
|$40,000 - $60,000
|$1,650 - $2,000
|$20,000 - $23,000
|$400,000 - $460,000
|$3,330 - $3,600
|$40,000 - $43,000
|$800,000 - $860,000
Note: The cash value account grows based on the terms of contract, policy charges, crediting rates, and the performance of the underlying index(s). Speak with a knowledgeable Texas life insurance agent who can assess your needs and provide you with multiple IUL solutions. Only a licensed agent can give you a real quote.
Make sure to pay attention to the chosen Death Benefit options (based on what you need to accomplish): Option A or Option B.
For example, the 30-year old from the policy shown above is likely to maintain the coverage well into his 80s, after paying the premium just for 20 years. If the underlying index performance remained flat (0% return - which is very unlikely), such a policy could survive on its own for around 30 years after the last payment was made. After all the cash values are exhausted, you need to replenish the cash value account - to maintain coverage.
If the underlying index goes up, so does the cash value in the account. Since the index may be volatile, the amount of growth is not guaranteed. You know that you cannot lose cash values from year to year, due to the 0% loss floor of the IUL, but you can also earn - up to a maximum cap established in the contract. Texas life insurance agents are restricted to showing you illustrations of returns of only up to 5.21%, while in reality, and statistically, an annualized growth can be much higher. For example, the annualized growth of S&P 500 (index) between 1957 and 2021 was over 10%. According to Goldman Sachs in 2020, over the past 140 years, U.S. stocks average returns of over 9%.
If you take the same 30 years old male, who has paid in to the policy for 20 years and sees a steady moderate 5.21% return year over year, the policy will not only sustain itself until the insured either dies, or turns 120 (when the death benefit is paid you), but also keeps growing the cash value, which can be later used for tax-free income during the retirement, or borrowed against. With the power of compounding, once the cash value account grows to equal the death benefit, every time it grows more, so does the death benefit - to match it.
Discuss your options with a knowledgeable life insurance agent who can correctly design and structure the policy for your needs.
The cost of IUL insurance is largely dependent on the insured's health, lifestyle, age, gender, amount of coverage, and the kind of features the IUL policy offers. Generally, insureds might pay between $1,683 to $10,315 annually for a $500,000 policy.
IUL premiums vary from one insurer to another. Typically, insurers use different factors like health status, sex, age, and tobacco use to determine the amount you will pay on your IUL coverage. For instance, healthy female non-smokers aged 25 to 35 years might spend between $852 to $1,152 yearly on premiums for a $250,000 policy. However, healthy male nonsmokers of the same age range can expect to pay between $1,152 to $1,464 per annum.
The cost of IUL insurance is largely dependent on the insurer and factors like age, gender, health, lifestyle and coverage amount.
VUL policies tend to be more expensive than IUL policies because it features active management of subaccount investments. The cost of VUL is greatly determined by various factors such as health and age. For instance, individuals between the age of 35 to 45 years might spend between $120 to $221 per month on premiums for a $250,000 policy. However, individuals between 55 to 65 years can expect to pay between $340 to $659 monthly.
NOTE: Selling and/or advising on VUL requires additional licensing (securities Series 6, 7, 65, 63 Broker-dealer, asset under management, and or variable products licenses), in addition to a life insurance license. Ensure you talk to a Texas licensed insurance agent about what VUL policy entails and the risk associated with the policies and their cash values.
The amount you pay for your IUL insurance is usually determined by the insurer based on different factors like health status, sex, age, lifestyle, and the coverage amount. Therefore, it is better to get an IUL policy at a young age and when you are in good health.
The amount insureds pay for IUL insurance per month is based on several factors like age, health, gender, lifestyle, and coverage. However, the average amount of IUL policy per month is between $71 to $122.
The average cost for an IUL policy for Individuals ages 50 to 59 varies depending on factors like health and gender. For instance, a man within that age range who is in excellent health and a non-smoker may be required to pay about $435.66 to $777.91 per month on a $250,000 policy. In contrast, a woman within the same age range and with similar health conditions and lifestyle might just pay around $376.00 to $665.00 for the same policy.
Generally, insurers in Texas do not write a $5,000.00 death benefit, as it will be expensive for them to maintain the policy.
Contact a knowledgeable Texas insurance agent to know the best amount of coverage sufficient for your IUL policy.
No. IUL insurance does not have deductibles because it is considered a personal expense.
IUL policy is mainly for people of all ages and incomes who want to protect their loved ones in the event of their death while building a tax-free income for the future. IUL Insurance policy can be very expensive at the time of purchase because of the extra fees that come with it. However, it becomes much cheaper in the long run as it has a cash value growth without market loss worry/potential loss. Additionally, your IUL policy can be costly if:
You purchased the policy at an older age
You are a male
You engage in dangerous activities
You have a severe health condition
You choose a high coverage
You have a high-risk job
It is best to purchase your IUL policy from an insurance agent to get it at a competitive price. This is because insurance agents work with multiple insurers, and they can help you compare IUL quotes and coverages from these insurers until you find one that best suits your needs and budget. Talk to a knowledgeable Texas insurance agent to get information on how to save on your IUL policy.
Some of the reasons your IUL insurance is so high could be due to:
Age: your IUL policy will be more expensive if you purchase it at an older age. This is because as you grow older, insurers consider you high-risk. For instance, if you buy an IUL policy at 35 years old, you will pay less than when you buy it at 65. It is always better to buy an IUL policy at a younger age to avoid high premium amounts.
Gender: men tend to pay more for IUL coverage than women because they have a shorter life expectancy. For instance, a man may be asked to pay between $96 to $122 on a $250,000 coverage, while a woman may just pay around $71 to $96 for the same coverage.
Health: you will pay a higher premium amount if you suffer from a severe health condition when purchasing your IUL policy.
Lifestyle and occupation: your insurers will likely charge you higher premiums if you are a tobacco user, do a job that involves severe risks like construction, or do a lot of dangerous activities like skydiving.
Coverage amount: the amount of IUL coverage you purchase can also determine how high your premium will be. For instance, a $2 million IUL policy will be more expensive than a $500,000 policy.
Riders: the type or amount of riders you add to your IUL policy can also make you end up with an expensive IUL policy.
Generally, it is better to purchase your IUL policy at a young age, when you are in good health and living a healthy life, to avoid high premium amounts.
If your IUL is too high, speak with a knowledgeable and experienced state-licensed life insurance agent, who can evaluate your needs and make sure that you are not paying for too much coverage. Speak to an agent to re-evaluate your insurance needs at least once a year.
Nothing increases or decreases your IUL policy premium after you have signed the contract. The premium amount you pay is based on your circumstances before purchasing the IUL policy:
Amount of Face Value (Death Benefit)
Minimum Guaranteed Annual Rate
Maximum Annual Interest Rate
Quotes and actual rates can only be provided by state-licensed life insurance agents.
No. The IUL insurance claim is made by the policy beneficiaries at the insured's demise. Afterwards, the IUL policy ceases to exist immediately after the death benefit is paid out.
No. IUL Insurance premiums do not change no matter what happens to you after purchasing the policy. You will continue to pay the agreed amount stated in your policy document as a premium for the rest of your life regardless of what happens to your health. The amount you pay in premium is largely determined by your current situation before purchasing the policy. Hence, if your health worsens after purchasing the policy, it will not affect your monthly premium cost.
There are two types of IUL policies available in Texas. They are:
Index Universal Life (IUL)
Variable Universal Life (VUL)
Out of these two types of IUL policies, IUL is the cheapest because the insurer does not need to actively manage the cash value account since insureds do not directly invest in the stock market.
NOTE: Selling and/or advising VUL products requires additional licensing (securities Series 6, 7, 65, 63 Broker-dealer, asset under management, and or variable products licenses), in addition to a life insurance license. Ensure you talk to a Texas licensed insurance agent meeting those requirements about what VUL policy entails and the risk associated with the policies and their cash values.
Discuss with a Texas insurance agent to clarify which type of IUL policy would best suit your current and future needs.
The cost of IUL Insurance does not go down over time. Insureds are required to pay the same premium amount depending on the mode of premium payment they choose and the circumstances surrounding their purchase of the policy. Typically, it is best to buy an IUL policy at a young age to enjoy low premium rates.
Another way to save on your IUL policy in case of any unforeseen future occurrence is to pay your premiums upfront. One can either go for the single premium payment method or the limited premium payment method. The single premium payment method allows one to make a one-time full, upfront premium payment. In contrast, the limited premium payment allows one to pay the premium of their IUL policy until a specific age, and the coverage lasts until the age of 100, without making any more payments.
Talk to a Texas insurance agent for more information regarding premiums and how you can save on your IU policy.
You only need to get an IUL policy that helps you build sufficient cash value to use while you are still alive and death benefits for your beneficiaries at your demise. You can withdraw from or borrow against your cash value while still alive. Additionally, the death benefit obtained from the IUL policy can be used to cover any needs such as funeral expenses, paying off a mortgage, tax-free retirement income, medical bills, daily needs, paying college tuition fees, etc. You can decide to get more IUL coverage if you think your future needs will increase or you want a tax-free income in the future.
Make sure to discuss your needs with a qualified and state-licensed life insurance agent who can assess your needs and provide you with multiple solutions.
Your individual and family needs determine how much Indexed Universal Life (IUL) insurance coverage you should get in Texas. Since death benefit and cash values are connected through taxation and insurance regulations, you need to clearly understand what options work best for your particular “needs strategy”. A knowledgeable and experienced life insurance agent can help you structure the policy for your needs:
Living Benefits that you could use to fund tax-free retirement, take out loans, to pay for your own premium, final medical expenses, and
Death Benefits large enough to cover the financial needs of your family after you are gone.
Speak with a Texas licensed insurance agent regarding the amount of IUL coverage that will best meet your needs.
The best way to save on Indexed Universal Life (IUL) Insurance is by purchasing it when you are younger and healthier. Buy the policy through an insurance agent who can help you compare quotes from multiple insurers. They will help you get an IUL policy that suits your needs at a competitive price and with better terms of returns. Talk with a knowledgeable independent life insurance agent in Texas for other possible ways to save on IUL insurance.
No, you cannot negotiate the price of Indexed Universal Life (IUL) insurance outside of the options that an insurer can offer. Instead, you can seek the services of an insurance agent who can help you compare IUL quotes from different insurers and go over the differences in terms of policies structured for different outcomes.
Yes, if you have some health conditions that make you uninsurable and the employer has a group plan that is a guaranteed issue, then it is worth buying your IUL policy through your employer. One has to make sure that the policy is owned by the insured and the policy beneficiaries are the insured's family and not the company. The policy should be an individual policy and portable if you leave the company.
Five ways to save on IUL insurance in Texas:
Shopping around: comparing IUL quotes from multiple insurers helps you save money on your IUL policy.
Age: getting an IUL policy at a younger age is cheaper than when you are older. Hence, it is better to get it as soon as you can.
Smoking: it takes at least a year after quitting, before life insurers will start lowering the cost of coverage for you. Five years of being smoke-free can get you the best non-smoker rating (depending on the insurer).
Riders: understand all of your options, especially as they deal with the use of Cash Value and/or Death Benefit for your Living Benefits. Pay only for the options you need.
Engage the services of a knowledgeable and experienced insurance agent, who can use their experience working with multiple insurers as leverage to help you get the best possible IUL options that suit your needs, thereby helping you save money on your IUL policy.
If you can not afford IUL Insurance, you can talk to an insurance agent in your locality. They will provide you with less expensive life insurance options where you can save money that your beneficiaries can use after your demise, but it might not come with a cash value.
The most common cash value life insurance options in Texas are the variations of: IUL, Whole Life, and Final Expense.
Insureds are required to pay regular premiums to avoid policy lapses, which would cause the policy to not pay out a death benefit when you die. One will find it difficult to keep their policy active if they do not have money. Therefore, it is better to get a policy you can afford so you can keep paying your premiums.
If the issue is due to the lack of liquidity, but there is property or other collateral in place, the prospective insured may qualify for premium financing, where no cash may be due from them. (Discuss premium financing of life insurance with a knowledgeable licensed life insurance agent).
There are different ways insureds can choose to pay their premiums depending on their access to funds, convenience, and affordability. The various payment options in IUL Insurance are:
Regular premium payment: most insureds prefer to use this premium payment mode. This requires them to pay periodically or regularly, which could be monthly, quarterly, or yearly based on the preference of the insured.
Single premium payment: this option requires that the insured makes a one-time full, upfront premium payment. The benefit that comes with this is that you will not experience nonpayment of premiums, hence your policy cannot lapse.
Limited premium payment: with this option, insureds are expected to pay the premium of their IUL policy within a specific age.
Individuals who want to pay their premiums upfront typically go for the single premium payment option or the limited premium payment option. If the insured pays in annual payments, the cost remains the same. If a monthly option is selected, IUL insurers may charge an extra fee (commonly 0 to 2 percent).
The availability of IUL discounts differs by insurers. For example, some insurers might be willing to offer the following discounts:
Safety discounts: these can be given to individuals who take preventive measures to lower risks like engaging in exercise, avoiding tobacco use, or smoking.
Bundling discounts: this can be given to insureds who buy multiple types of insurance with the same company.
Group discounts: you can get this discount if you belong to a certain association or profession. For example, military members, teachers, and government employees can qualify for this discount.
Talk to a knowledgeable Texas life insurance agent to know if your insurer offers an IUL discount and if you are eligible for it. Consulting with experienced insurance agents generally helps you save on cost because they have versed knowledge of the current market, the best IUL products that will suit your current and future needs, and their pricing. They can also guide you through bundling different coverages to achieve the most savings.