Texas IUL

Secure Growth and Tax‑Free Retirement Through Indexed Universal Life Insurance

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About Us

Put Your Money to Work with Indexed Universal Life (IUL)

For many Texans, traditional savings vehicles like 401(k)s and mutual funds don’t feel secure enough.

Market volatility can erode wealth, and federal tax rules limit how much you can contribute toward retirement.

Indexed Universal Life insurance (IUL) offers a way to build wealth while protecting your loved ones.

It’s a type of permanent life insurance that combines a death benefit with a cash‑value account linked to a stock‑market index such as the S&P 500 or NASDAQ‑100.

Your policy’s cash value earns credited interest when the index rises, and a guaranteed floor (often 0%) protects you during market downturns.

That blend of growth potential and downside protection is why more Texans are using IUL to fund retirement, college savings and estate plans.

How IUL Works

An IUL policy offers more flexibility than whole life and more safety than variable universal life.

When you pay premiums, a portion covers the insurance cost and fees; the remainder goes into your cash‑value account.

Wealth management

You decide how much of that cash value gets credited based on a market index and how much stays in a fixed account. Key features include:

Flexible premiums and adjustable death benefits. Like other universal life policies, you can increase, decrease or even skip premium payments, provided your policy has enough cash value to cover charges.
Index‑based interest crediting. Your cash value earns interest based on the performance of selected indexes, subject to participation rates and caps. Gains are typically capped around 10–12%, while a guaranteed floor prevents losses. Your money isn’t invested directly in the stock market; instead, the insurer credits interest based on index movements.
Guaranteed minimum interest rate. Even when markets decline, your policy’s cash value doesn’t drop below the guaranteed floor, though policy charges still apply.
Tax‑advantaged access. Cash value grows tax‑deferred and can be accessed through loans that are generally tax‑free if structured correctly. Loans reduce your death benefit if not repaid.
Unlimited contributions. Unlike 401(k)s and IRAs, IULs have no federal contribution limits. You choose how much to invest, subject only to IRS rules that prevent your policy from becoming a MEC.

Why Texans Choose IUL

Texans have diverse financial goals—from protecting oil‑field wealth and family farms to funding college tuition or business ventures.

IUL policies can help meet those goals by offering:

Tax‑free death benefit. The death benefit passes to your beneficiaries income‑tax free under federal rules. It can cover final expenses, replace your income or leave a legacy for future generations.
Growth potential with downside protection. Cash value participation in index gains provides upside potential while a 0% floor shields you from market losses.
Flexible funding. You can adjust premium payments to align with fluctuating income. During profitable years, overfunding your policy accelerates cash growth; during lean years, minimum funding keeps the policy in force.
Living benefits. Many carriers offer riders that let you access part of your death benefit for chronic illness or long‑term care expenses.
Estate planning and business uses. IUL can fund buy‑sell agreements, equalize inheritances or create a tax‑efficient legacy. Texas law generally exempts life insurance from creditors, adding asset‑protection benefits.

Max Funded IUL – Supercharge Your Cash Value

For clients who want to maximize tax‑free retirement income, a max‑funded IUL is a powerful strategy.

This design funds the policy up to the IRS‑approved limit without crossing the MEC line.

Key aspects include:

Paying high premiums early. You contribute significantly more than the minimum premium, filling the policy’s cash‑value bucket quickly. This accelerates growth and minimizes insurance costs.
Minimum death benefit. A max‑funded design starts with a smaller death benefit to reduce internal costs; as the cash value grows, the death benefit increases.
Participation rates, caps and floors. Your cash value gains a percentage of index returns (participation rate) up to a cap, with a floor ensuring no loss. Some carriers offer uncapped strategies that trade lower participation for unlimited upside.
Avoiding MEC status. Staying below the 7‑pay test limit is crucial to keep loans and withdrawals tax‑free. Your agent uses specialized software to structure premiums so you can push as much money into the policy as possible without losing tax advantages.
Access to cash value. Once the cash value is substantial, you can take loans or withdrawals for retirement income, business opportunities or emergencies. Properly structured, these loans don’t trigger taxes and don’t require repayment during your lifetime.

Max‑funded IULs aren’t for everyone.

They require consistent funding and a long‑term commitment. You should also have other retirement savings in place.

However, for high earners who have maxed out other tax‑advantaged accounts and want an additional growth and income vehicle, max funding can deliver significant advantages.

Our Benifits

How Much Does IUL Cost
in Texas?

The cost of an IUL policy varies based on age, health, coverage amount and chosen index strategy.

According to a 2025 market analysis, the average annual cost for a $500,000 IUL policy in Texas is about $2,853, or roughly $238 per month.

Younger applicants pay less—25‑year‑olds might see premiums around $210–$360 per month—while older clients (65) may pay $1,050–$1,760 per month.

Getting quotes from several carriers helps you find the right blend of cost and features.

Working with a Texas‑licensed agent ensures you compare policies with similar caps, participation rates and riders.

Choosing the Right IUL:
A Step by Step Guide

Define your goals. Decide whether your priority is retirement income, estate planning, business continuation or family protection. Goals influence how much you fund the policy and which riders you choose.
Compare index strategies. Review each insurer’s caps, participation rates and floors. A higher cap isn’t always better if the participation rate is low. Ask for historical performance illustrations and choose conservative assumptions (6–7% returns).
Understand costs and fees. Examine monthly charges, cost of insurance and surrender charge schedules. Lower initial premiums may hide higher long‑term expenses.
Verify financial strength. Stick with carriers rated A‑ or higher by AM Best and check NAIC complaint indexes.
Work with a licensed Texas agent. Agents help design illustrations that avoid MEC status, navigate the 7‑pay test and align the policy with your goals. They can also compare quotes from multiple insurers and explain differences in cap rates, participation rates and riders.
Review and adjust. IUL is not a “set it and forget it” product. Review your policy annually to adjust index allocations, premium payments and death benefit to reflect your changing life circumstances.

Get Started with IUL in Texas

At TexasIUL, we specialize in helping Texans harness the power of Indexed Universal Life insurance.

Whether you’re a young professional seeking an alternative to volatile markets, an entrepreneur protecting your business, or a family looking to create generational wealth, we design policies tailored to your needs.

Ready to explore your options?

Contact our team for a free consultation.

We’ll provide personalized illustrations, explain how max funding works, and help you compare the top IUL carriers in Texas.

Let’s build a strategy that delivers tax‑free retirement income, lifetime protection and peace of mind.