How Much Does an IUL Cost? It Depends on Funding
Written and reviewed by Hans Goldstein, licensed insurance producer, NPN 20602398 · CA Insurance License #4273294Last reviewed · Published October 3, 2026
Two ways to price the same policy: target vs max-funded
Every IUL has a range of premiums it will accept for a given death benefit. At the low end is roughly the target or minimum premium: enough to keep the policy going on current assumptions, with thin cash value. At the high end is the max-funded premium: as much as tax law allows before the policy becomes a modified endowment contract (MEC) under IRC §7702A. The more you put in relative to the death benefit, the more cash value it can build.
Hans explains this with vehicles (the car, SUV and semi-truck):
- Semi with an empty tank: a big death benefit on the minimum premium. Cheapest per month, but the cost of insurance on a large death benefit eats the little cash there is, and these are the policies that can lapse in your 70s or 80s.
- SUV loaded right: the smallest death benefit that legally holds the premium you plan to pay. Higher premium per dollar of coverage, lowest charge drag per dollar of cash.
- Sedan overloaded: too much premium for the death benefit. It becomes a MEC, and loans and withdrawals are taxed gain-first, with a 10% penalty before 59½.
An honest presentation of anything non-guaranteed uses words like "up to", "could" or "illustrated at". If you hear "will" about cash value, index credits, loan income or a living-benefit payout ("this policy will pay you 80%", "you will have $1 million at 65"), treat it as a red flag. Only the guaranteed column and the contract's stated guarantees are promises; ask the person to show you where the word "guaranteed" appears.
No policy performs exactly as illustrated. Real results usually land somewhere between the guaranteed column and the illustrated (current) column: some years credit less than assumed, charges can move within their limits, and premiums are rarely paid exactly on schedule. That is why the midpoint column, halfway between the two, is the most useful planning number, and why Hans shows guaranteed, midpoint and current side by side.
AI voices. Education, not tax or legal advice. Hans is paid a commission if you buy a policy through him. Comment FUNDED on the video for the checklist.
What you actually pay for inside an IUL
The premium goes in; these charges come out. They are listed in the policy and the illustration, and the maximums are guaranteed while current charges can change within those limits.
The charges inside an IUL
| Charge | In plain words | Why it matters |
|---|---|---|
| Premium load | A percentage taken off each premium before it reaches cash value | Often higher in the early years; part of why cash value starts below what you paid |
| Cost of insurance (COI) | The monthly price of the death benefit, charged on the amount at risk (death benefit minus cash value) | Rises every year with age; the bigger the death benefit vs cash value, the bigger this charge |
| Policy fee and per-unit charge | A flat monthly admin fee plus a charge per $1,000 of face, often for the first 10 years | Fixed costs that weigh most on small policies |
| Rider charges | Monthly charges for optional riders you choose | Charged riders (for example some chronic illness riders) cost money every month |
| Surrender charge | Not a monthly charge: what you lose if you cancel in the early years, often 10 to 15 years | Why an IUL is a long-term commitment |
Exact charge schedules are in each insurer's policy form and illustration. For the shape of the cost of insurance by age, see the 2017 CSO table on the problems-when-older page.
- Ask: what is the guaranteed minimum cap and the guaranteed minimum participation rate in the contract for each index account? Not today's cap, the floor the cap can never go below.
- Why it matters: today's cap is not guaranteed. The insurer can lower caps on your policy over time, all the way down to that contractual minimum. Guaranteed minimum caps we have seen published run from 0.25% to 4% (insurer documents, 2024 to 2026), and several insurers don't publish theirs at all. That is a very different worst case.
- Many agents cannot answer this question on the spot. If yours can't, ask them to find it in the policy form or the illustration's guaranteed assumptions before you sign.
Where the insurer publishes it, the Goldstein Scorecard shows the guaranteed minimum cap; otherwise it says "not publicly disclosed". Caps, participation rates, loan rates, charges and dividends are not guaranteed and can change.
What would an IUL cost you, funded right?
Send your email and Hans will send a minimum-funded vs max-funded comparison for your age within one business day.
We’ll email it to you. Hans Goldstein · NPN 20602398.
Rather talk it through? Or book 15 minutes on Hans’s calendar.
Real numbers: what 179 IUL buyers actually pay
Hans publishes his own in-force book (Life insurance cost by age, 179 in-force IUL policies, verified 9/15/2026). These are placed policies, mostly smaller, protection-focused designs, so they show what people bought and were approved for, not a rate card.
Hans's in-force IUL book, 179 policies, as of 9/15/2026
| Age at issue | Median cost per $1,000 of death benefit, per month |
|---|---|
| 20 to 29 | $0.41 |
| 30 to 39 | $0.53 |
| 40 to 49 | $1.00 |
| 50 to 59 | $1.77 |
| 60 to 69 | $2.62 |
Source: hansgoldstein.com, 179 in-force policies. Median premium $79.41 a month; median death benefit $75,000. Underwriting classes are not standardized across the sample. Ballpark, not a quote.
A cash-focused design at $500,000
$500,000 of permanent coverage, nonsmoker in good health
| Age | IUL (estimated annual premium) | Whole life (estimated annual premium) |
|---|---|---|
| 20 | $2,584 | $2,548 |
| 30 | $3,612 | $3,662 |
| 40 | $5,942 | $5,525 |
| 50 | $10,132 | $8,750 |
| 60 | $18,309 | $14,517 |
Source: Ethos, last updated 7/15/2026. Estimated rates; carrier, sex, class and funding design not stated. Ballpark, not a quote. This shows that a cash-focused IUL can cost as much as whole life; a minimum-funded IUL at the same face costs much less and builds much less.
Your exact number
IUL monthly premium, minimum-funded and max-funded, at your exact age and health class: published surveys do not cover every age, class and face amount, so instead of empty cells or guesses, Hans runs real quotes from several insurers for you.
Get your exact number in 15 minutes on a 1:1 call with Hans. He runs real quotes from several insurers for your age, health and state.
For IUL, ask for two numbers at the same death benefit: the minimum premium and the max-funded premium. That gap is the whole decision.
A rule of thumb, not a quote. Paramed vs no-exam: the full trade-off.
The cost nobody quotes: what happens if it is underfunded
The cheapest monthly premium is not the cheapest policy if it lapses at 80. The cost of insurance keeps rising with age; if cash value is thin, the charges can outrun it. Ask for an illustration that shows the guaranteed column next to the midpoint and current columns, and look at the age the guaranteed column runs out. As with any policy that qualifies as life insurance, the death benefit is generally income-tax-free to your beneficiaries under IRC §101(a). Also, policy loans and withdrawals up to your basis are generally not taxed if the policy is not a modified endowment contract (IRC §7702A) and stays in force; a lapse or surrender with a loan outstanding can create taxable income.
Get your exact number in 15 minutes on a 1:1 call with Hans. He runs real quotes from several insurers for your age, health and state.
Get your exact number in 15 minutes
Hans shows the minimum and the max-funded premium for the same death benefit, side by side, from several insurers, with the guaranteed column.
Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer
Frequently asked questions
Sources
- Hans Goldstein: life insurance cost by age, 179 in-force IUL policies (9/15/2026)
- Ethos: IUL vs whole life (estimated annual premiums, $500,000, last updated 7/15/2026)
- 26 U.S.C. §7702A (modified endowment contracts), Cornell LII
- 26 U.S.C. §101 (death benefits, accelerated benefits), Cornell LII
- Society of Actuaries, 2017 Loaded CSO, Nonsmoker Male ANB (table 3291)
Hans Goldstein, CA Insurance License #4273294 · NPN 20602398 · Goldstein & Co. LLC dba Goldstein Insurance Services, CA License #6016830
Contact: hans@hansgoldstein.com · 213-414-2808
General education, not tax or legal advice. Tax treatment depends on your facts and on current law, which can change. Talk to your CPA or estate attorney. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Guarantees apply only to the contractual terms of the policy. Caps, participation rates, loan rates, charges and dividends are not guaranteed and can change. Hans is paid a commission by the insurer if you buy a policy through him. For life insurance, ask and he will tell you what he earns on your specific policy. Product and company names are trademarks of their owners. Goldstein Insurance Services is an independent agency, not affiliated with or endorsed by any insurer named here. Life insurance requires underwriting; not everyone qualifies. This page describes products in general terms; read the policy and the insurer's disclosures before you buy.