An Indexed Universal Life (IUL) insurance policy is a type of permanent life insurance that combines a death benefit with a cash value component, which grows based on the performance of a specific stock market index, like the S&P 500. Unlike traditional whole life policies, which offer a fixed interest rate on the cash value, an IUL allows the cash value to grow in line with market index returns, offering the potential for higher growth. However, the growth is typically subject to a cap, meaning the cash value won't exceed a certain percentage even if the index performs well. Additionally, the policy usually has a floor, meaning the cash value won’t decrease due to poor market performance. IULs offer flexibility in premium payments and death benefit amounts, making them a versatile option for those seeking both life insurance protection and a way to build cash value over time.