Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jul 8, 2021

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The Brief

  • Equity indexed universal life insurance is a permanent life insurance policy with a cash value that grows based on the stock market
  • Equity indexed universal life insurance rates are in the mid-range, balancing affordability with growth potential
  • While equity indexed universal life insurance can grow quickly, the cash value can also decrease if the premiums become more expensive than what you earn in interest

If you’re not sure if you should be looking to buying term life insurance or another type of policy, figure out what you want your policy to do for you.

Some life insurance policies allow you to protect your family after you pass away as well as give you the potential to grow your wealth. Equity indexed universal life insurance may be able to help you build cash value with less risk.

Enter your ZIP code into our free quote comparison tool above to compare equity indexed universal life insurance quotes today.

What is equity indexed universal life insurance?

Equity indexed universal life insurance is a permanent life insurance policy with flexible premiums and a cash value that grows based on an equity index.

Part of the premiums goes into the cash value, while the rest goes toward the cost of the policy.

There is typically a minimum premium amount that accounts for the cost of the insurance and a stable interest rate. However, if you pay more than the minimum, the cash value of the policy will grow more quickly.

Universal life insurance policies usually grow based on an interest rate determined by the life insurance company and the performance of their portfolio.

An equity indexed universal life insurance policy follows the performance of the stock market, so this could provide more growth.

The equity indexed universal life insurance company will typically set a guaranteed interest rate, so you won’t lose money if the stock market goes down. They will also set a cap, so you won’t be able to earn more than a certain rate.

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How much are equity indexed universal life insurance rates?

Let’s take a look at some average monthly rates for different types of insurance:

Average Life Insurance Monthly Rates by Policy Type and Age
Policy Type at $100K20-Year-Old Average Monthly Rates40-Year-Old Average Monthly Rates60-Year-Old Average Monthly Rates
Term (20 years)$15$23$110
Whole$70$128$302
Universal$36$63Rate not available
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Because of the potential to grow your cash value more than other policies, you should expect to pay higher rates for equity indexed universal life insurance.

Should I buy equity indexed universal life insurance?

Equity indexed universal life insurance allows you to take advantage of some of the benefits of the variable universal life insurance without the risk of losing money if the stock market drops.

While the premiums are more expensive than some types of insurance, they are lower than others. Mid-range rates balance with the benefits that the policy offers.

However, the problems with indexed universal life insurance are that the cash value can decrease if the premiums become more expensive than what you earn in interest, and the policies are often difficult to understand and set up.

Use an indexed universal life insurance calculator to see how much coverage you can afford. Enter your ZIP code into our free quote comparison tool below to find affordable equity indexed universal life insurance today.