Consumer Price Index (CPI)

Consumer Price Index (CPI) is a measure that examines the average change over time in the prices paid by consumers for a basket of goods and services.

Within the context of Indexed Universal Life insurance, the CPI can be used as one of the indices to which the policy's cash value growth is linked. If the IUL policy offers a CPI-linked option, it means the credited interest to the policy's cash value may be tied to changes in the CPI, providing a potential hedge against inflation for the policyholder.

However, it's important to note that IUL policies might have caps, floors, and participation rates that will affect the actual credited interest rate, even if it's based on the CPI.