What differentiates an Indexed UL
policy from other
types of permanent life insurance used for cash accumulation is that the growth
of the
policy's cash value is based on the performance
of an equity index (usually the S&P 500), excluding dividends, collared by a cap and a floor — rather than based on a flat crediting rate that is
established by the insurance carrier and adjusted from time to time (a product referred to as «current assumption universal life»), based on a flat dividend rate that is
established by the insurance carrier and adjusted from time to time (a product referred to as «whole life»), or based on the actual investment returns
of specific equity investments (a product referred to as «variable universal life»).