Principal

Principal refers to the initial amount of money invested or paid into the policy, excluding any interest, dividends, or other earnings. This is the base amount that is used to calculate the potential growth of the policy's cash value, which can be influenced by the performance of a chosen stock market index.

The principal is typically the premiums paid by the policyholder minus any fees or charges levied by the insurance company.

It is important to note that in an IUL policy, the principal is usually protected from market downturns, meaning that even if the index performs negatively, the principal amount will not decrease.