Premium Tax

Premium Tax refers to a state-imposed tax on insurance premiums, including those paid for Indexed Universal Life (IUL) policies.

This tax is typically a percentage of the premium amount and can vary from state to state. Insurance companies usually factor in the cost of the premium tax when determining the pricing of IUL policies. The tax may indirectly impact the policyholder's cash value accumulation and overall policy performance, as it is a part of the overall cost of maintaining the insurance policy.