Indexed Universal Life Insurance (IUL) is a type of permanent life insurance policy that offers both a death benefit and a cash value component. The cash value grows tax-deferred and can be used to provide a source of retirement income through policy loans.

One of the main advantages of IUL over other types of permanent life insurance policies is its flexibility. IUL policies allow policyholders to allocate their premiums between the insurance and savings components of the policy, allowing them to adjust their coverage and savings based on their individual needs.

The cash value component of an IUL policy earns interest based on the performance of a selected stock market index, such as the S&P 500. The policyholder's account is credited with a percentage of the index's gains, subject to a cap and a floor. This means that the policyholder can benefit from market gains while being protected from market losses.

With an IUL policy, policyholders can take out policy loans against the cash value of their policy. These loans are not subject to income tax and do not have to be repaid, although interest accrues on the loan amount. This means that policyholders can use their IUL policy as a source of tax-free retirement income without having to pay back the loan.

In summary, Indexed Universal Life Insurance offers policyholders the ability to accumulate tax-deferred cash value, participate in stock market gains, and access retirement income through policy loans. These advantages make IUL an attractive option for individuals looking for flexibility and potential for growth in their life insurance and retirement planning.