IUL Guide Last reviewed: 2026-10-03 Part of Indexed universal life

IUL Fees and Charges: What You Pay and Where to Find It

Written and reviewed by Hans Goldstein, licensed insurance producer, NPN 20602398 · CA Insurance License #4273294
Last reviewed October 3, 2026 · Published October 3, 2026

Short answer: an IUL charges you six ways: a premium load on each payment, a monthly cost of insurance on the amount at risk, a per-$1,000 charge (often for the first 10 years), a flat monthly policy fee, charges on some index accounts, and a surrender charge if you leave early. Early on, loads and fixed charges dominate; late in life, cost of insurance does, because mortality rates climb steeply with age. Few carriers publish all of them, so your illustration's expense pages are where to look.

The six charges

IUL charges

Charge	How it works	When it bites
Premium load	A percentage taken from each premium	Every payment; often higher in early years
Cost of insurance (COI)	Rate per $1,000 times the net amount at risk, monthly	Grows with age; dominates after 70
Per-$1,000 (unit) charge	Monthly charge per $1,000 of face	Usually the first 10 years
Policy fee	Flat monthly fee	Always; matters most on small policies
Index account charge	Annual charge on certain high-cap or bonus accounts	Every year you use that account, up or down
Surrender charge	Deducted if you surrender or reduce face early	Often 10 to 15+ years

Published examples

Americo Instant Decision IUL: 7% premium expense charge in all years plus a $5 monthly policy fee (Americo).
Nationwide IUL Accumulator II: a high-cap account at 13.25% carries a 1% charge (3/2026, Nationwide).
Transamerica FFIUL II: a 12.25% cap S&P 500 account with a 0.72% annual index account charge, versus a no-charge 9.00% basic account (7/2025 flyer, secondary, source).

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Where your premium goes

Where your premium goes: the first 10 years

In this model a male 45 paying $10,000 a year loses about 15% of the first 10 years of premium to charges when the policy is max-funded, and about 22% when the same premium buys three times the death benefit. The surrender charge is extra: in year 1 the cash surrender value is about $4,245 of $10,000 (max-funded) and $0 (target-funded), which is why early cash value can feel like half the premium disappeared. A common rule of thumb is that roughly half of early premium goes to charges; in this model that is close for year-one surrender value, and too high for the ongoing charges in a well-funded design.

First 10 years	Premium load	Fees	Cost of insurance	To cash value
Max-funded	$10,000	$3,700	$1,240	$85,060
Target-funded	$10,000	$8,710	$3,721	$77,569

Hypothetical. Not an illustration of any specific policy. Not a quote. Model on current (non-guaranteed) charges: premium load 10% (years 1-10) then 5%, $10 a month fee, per-$1,000 charge for 10 years, current COI at 80% of 2017 CSO select rates, 6% illustrated crediting. Guaranteed maximum charges are higher. Ask your insurer for the policy's actual charge schedule.

The cost of insurance ladder

The cost of insurance ladder

Max-funded, current charges and 6% illustrated crediting Underfunded (3x the death benefit, same premium), guaranteed maximum charges and 0% crediting

Read it like a ladder. The insurance part of the policy gets more expensive every year: the guaranteed maximum rate is about $8 per $1,000 at 65, $24 at 75 and $82 at 85 (2017 CSO). Each step is small until the late 70s, then the ladder curves up sharply. In a well-funded policy the cash value grows faster than the charges, so the policy carries itself with no extra premium (green). In an underfunded policy the charges eat the cash value from the inside, and the owner must pay more or the policy lapses (red, at 79 here). Real results usually land between those lines, which is why an in-force illustration every few years matters.

Hypothetical. Not an illustration of any specific policy. Not a quote. Male 45, preferred nonsmoker. Charges per the stated model; COI is charged on the net amount at risk (death benefit minus cash value), so the dollar cost depends on both the rate and how much coverage the cash value has not yet replaced. Source for rates: Society of Actuaries, 2017 CSO table 3291.

Why cost of insurance takes over

2017 CSO mortality, male nonsmoker (the basis for guaranteed maximum COI on most new policies)

Attained age	Deaths per 1,000 a year (guaranteed maximum COI per $1,000 at risk)	Multiple of age 65
55	3.40	0.4x
60	4.74	0.6x
65	7.96	1.0x
70	13.21	1.7x
75	24.24	3.0x
80	43.68	5.5x
85	82.34	10.3x
90	157.18	19.7x
95	243.40	30.6x
100	352.09	44.2x

Source: Society of Actuaries, 2017 Loaded CSO, Nonsmoker Male ANB (table 3291). Current (non-guaranteed) charges are usually below these, but the shape is the same.

Guaranteed maximum COI rates follow mortality tables like 2017 CSO, which rise about tenfold from 65 to 85. Current charges are usually lower, but the shape is the same. That is why a policy with little cash value late in life gets expensive fast, and why Option A and strong funding help. Option B to A.

Where to find your charges

Your illustration includes expense and charge pages, and your annual statement lists monthly deductions. If they are not itemized, ask the insurer for a breakdown: premium loads, COI, unit charges, policy fees and any rider or index account charges for the past year. Read an in-force illustration.

Own an IUL, or weighing one?

Send the illustration or annual statement. Within one business day you get a written read on the Goldstein Index: funding level, charges, loan cost and lapse risk.

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

What fees does an IUL have?

Premium loads, cost of insurance, per-$1,000 charges, a monthly policy fee, charges on some index accounts, and surrender charges.

What is cost of insurance in an IUL?

The monthly charge for the insurance part of the policy: a rate per $1,000 times the net amount at risk, rising with age.

How much of my IUL premium goes to fees?

It depends on design. On small, minimum-funded policies a large share of early premium goes to charges; on a well-funded policy the share is smaller. Ask for the illustration's charges by year.

Do IUL index accounts have fees?

Some do. Nationwide's high-cap account carries a 1% charge and a Transamerica account a 0.72% annual charge, for example.

Why do IUL charges rise as I get older?

Because cost of insurance follows mortality rates, which rise steeply after 65. Cash value that reduces the amount at risk helps offset it.

Sources

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.