Indexed Universal Life vs S&P 500

The main difference between IUL and the S&P 500 is that IUL is a life insurance product offering a death benefit alongside its cash value component, which can grow tax-deferred based on the performance of an index like the S&P 500, but typically with caps at 11% and a 0% floor to limit downside risk. The S&P 500 is a stock market index representing the performance of 500 large companies, offering the potential for higher returns but also carrying greater market risk. While IUL can potentially participate in market gains, it generally cannot outperform the S&P 500 directly due to built-in protections and the cost of insurance.