5-Year Constant Maturity Treasury Rate

5-Year Constant Maturity Treasury Rate refers to the yield or interest rate associated with U.S. Treasury securities that have a remaining maturity of five years. This rate can be used as a benchmark or index for some IUL policies, meaning the credited interest rate to the policy's cash value is linked to the performance of this rate.

Unlike equity-based indexes, such as the S&P 500, the 5-Year Constant Maturity Treasury Rate offers a gauge of interest rate trends and the broader bond market, which can be less volatile than equity markets.

When this rate is chosen as the index for an IUL policy, the credited interest might be calculated based on the changes in this rate, subject to any caps, floors, or participation rates stipulated in the policy.

Note: While the 5-Year Constant Maturity Treasury Rate provides an alternative to more traditional equity-based indexes, policyholders need to understand how this rate is calculated and how its movements can impact their IUL policy's performance.