Term Life vs IUL 2027 Comparison Calculator

Compare term life insurance vs Indexed Universal Life (IUL) 2027 — see cost difference, cash value buildup, when IUL beats buy-term-invest-difference.

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Term Life Mechanics

Pay annual premium for fixed term (10/20/30 years). If you die during term → beneficiaries get death benefit. If you outlive term → no payout, premiums gone. Cheap for cost ($200-800/yr typical age 30-50).

IUL Mechanics

Permanent life insurance with cash value tied to S&P 500 (capped 8-12% upside, 0% floor). Premiums 5-15x higher than term but cash value grows tax-deferred and can be borrowed. Complex fees.

Buy-Term-Invest-Difference Strategy

Buy cheap term life. Take the premium savings (vs IUL) and invest in low-cost index funds in Roth IRA / 401k. Usually beats IUL because of fees, caps, and surrender charges in IUL.

When IUL Makes Sense

High earners ($300k+/yr) who maxed 401k/Roth/HSA need additional tax-deferred vehicle. Estate planning with permanent need for death benefit. Business owners with split-dollar arrangements.

Source: naic.org IUL Suitability Guidance 2026, iii.org consumer guides. Last updated: May 2026.