Indexed universal life (IUL) is permanent life insurance with flexible premiums and a cash value that earns interest based on the performance of a market index, within a cap and a floor. It is one of the most useful products an independent agent can offer, and one of the easiest to oversell. This IUL sales script walks you through a compliant, needs-based call in eight steps: open, find the need, explain how IUL really works, set underwriting expectations, qualify, fund the policy, walk the illustration and close.
Use it as a framework, not a word-for-word read. Always follow your carrier's rules, your state's advertising and telemarketing rules and the illustration you actually run for the client. Before you dial, scrub your list against do-not-call registries, confirm you have consent before using an autodialer or prerecorded message, and disclose call recording where state law requires everyone's consent.
Key takeaways from this IUL sales script
Lead with the need. Protection first, cash value second. A client who only wants a short-term savings account is usually not an IUL client.
Explain the cap and the floor honestly. The floor stops index losses from being credited to the cash value, but policy charges still come out every month.
Fund it to last. An underfunded IUL can lapse. Build a premium the client can keep paying for decades.
Show both columns. Walk the guaranteed and non-guaranteed values on the illustration, not just the best case.
Step 1: Open the call with confidence
Skip "is this a good time?" Start the IUL sales script by identifying yourself and the request they made:
"Hi [Client Name], this is [First and Last Name], a licensed life insurance agent with [Your Business Name]. I'm following up on the information you requested about indexed universal life, the permanent life insurance policy that can build cash value. Does that ring a bell?"
If they ask who you work for, tell them plainly: you are an independent agent who works with several carriers, and your job on this call is to see whether IUL is a good fit before anything goes to a carrier.
Step 2: Find the need
"What got you interested in this kind of policy: the life insurance protection, or building cash value you can use later?"
Their answer tells you whether the rest of your IUL sales script should lead with protection or accumulation. Then ask:
Who depends on your income, and for how long?
What coverage do you have today, and is any of it through work?
Are you already funding a 401(k), IRA or other retirement plan?
How many years could you comfortably keep paying a premium?
If this policy would replace existing coverage, or be funded from it, complete the carrier's replacement questions and your state's replacement notice, and tell the client not to cancel the old policy until the new one is issued.
If the client needs the most coverage for the lowest cost for a set period, quote term life as well. If they need lifetime coverage and have room in the budget to fund cash value for the long run, IUL may fit.
Step 3: Make IUL make sense
Keep the explanation simple and accurate:
It is permanent life insurance. Coverage can last for life as long as the policy has enough cash value to cover its charges.
A premium charge comes off each payment and the rest goes into the cash value. The cost of insurance and policy fees are then deducted from the cash value every month.
The cash value is not invested in the stock market. Interest is credited based on an index, such as the S&P 500, using a cap and a participation rate the carrier sets and can change after issue, subject to the guaranteed minimums in the contract.
The floor, often 0%, means a down year for the index does not credit a loss. Policy charges are still deducted, so the cash value can go down in a year with no credited interest.
Cash value can be accessed through policy loans or withdrawals. Loans accrue interest and reduce the cash value and the death benefit.
"Think of it as life insurance first, with a cash value account that can grow when the index does well and is protected from index losses when it doesn't, though the monthly policy charges still come out."
Step 4: Set expectations on the application
"Life insurance is priced mainly on age, health and lifestyle, and the carrier will also confirm the coverage fits your income and finances. The carrier will review your application, your prescription history and the Medical Information Bureau (MIB) report, and usually your driving record. Depending on your age and the amount of coverage, they may approve you without an exam, or they may ask for a paramedical exam or lab work. My job is to match you with the carrier most likely to approve you at the best rate."
Step 5: Qualify on health and habits
Ask about height and weight, tobacco or nicotine use, current medications and what they treat, diagnoses and hospitalizations, driving record (including any DUIs), and any criminal history. Use the answers to choose the carrier. As an independent agent, you are not stuck with one company's underwriting.
Step 6: Build a premium that fits and lasts
"What monthly amount could you keep paying for the long term, even in a tight year?"
Then explain funding:
Paying more than the minimum premium, within IRS limits, puts more money into the cash value and makes the policy more likely to stay in force.
If the policy is overfunded past federal limits (the seven-pay test), it becomes a modified endowment contract (MEC). Loans and withdrawals from a MEC are taxed gains-first as ordinary income, plus a 10% penalty before age 59½, although the death benefit generally stays income-tax-free. Carriers design the illustration to stay under that limit when you ask them to.
Most IUL policies have surrender charges for many years, so this money should be money the client will not need in the short term.
Step 7: Walk through the illustration
Run the illustration in the carrier's software and walk it page by page with the client:
The policy summary: premium, death benefit, death benefit option and any riders, such as accelerated death benefit riders for terminal, chronic or critical illness where the carrier offers them.
The guaranteed column: what happens at the minimum guaranteed crediting and maximum policy charges. Show the client the year the policy could lapse under guaranteed values, if there is one.
The non-guaranteed column: the illustrated rate. Under NAIC Actuarial Guidelines 49-A and 49-B, the maximum illustrated rate and the illustrated loan spread are capped, but these values are still not promised.
A lower-rate scenario: rerun the illustration at a lower rate so the client sees a realistic range.
The paperwork: you and the client sign the illustration. If the policy issues differently from what was applied for, a revised illustration is signed at delivery, and you give the client the buyer's guide where the state requires it.
When your IUL sales script gets to policy loans, be clear: "Loans let you use your cash value without surrendering the policy. They charge interest, they reduce your cash value and death benefit, and if the loans get too large the policy can lapse, which can create a tax bill. Before you plan on using loans for income, talk with your tax professional."
Step 8: Close the sale
"Based on what you told me, [Client], this design gives [spouse or family] [death benefit] of protection and can build cash value you may be able to use later, depending on funding and crediting. Does it fit what you're looking for?"
"The next step is to see whether the carrier will approve you. For the application I'll need your Social Security number, your driver's license number and the bank account you want the premium drafted from. Do you have those handy? It usually takes about 15 to 20 minutes."
To finish the IUL sales script, set the first draft date on the call, explain what underwriting may ask for next, and schedule your follow-up before you hang up.
Answering three common IUL objections
"I heard IUL is a scam." "IUL is regulated life insurance from rated carriers. Problems usually come from policies that were sold with unrealistic illustrations or underfunded. That's why I'm showing you the guaranteed column and a lower-rate scenario, not just the best case."
"Why not buy term and invest the difference?" "That can be a great plan if you need coverage for a set period and you'll actually invest the difference. IUL is for people who want coverage that lasts for life plus a cash value they can use. Let me show you both side by side."
"Can I lose money?" "The floor protects you from index losses being credited. But the policy has charges every month, so in a year with no credited interest your cash value can go down, and surrender charges apply in the early years. That's why we fund it properly."
For more objection handling beyond this IUL sales script, see the BetterLifeQuotes.com objections playbook.
Which carriers in our lineup offer IUL?
Among our 14 carriers, Transamerica, AIG / Corebridge, Mutual of Omaha and Ethos offer indexed universal life through independent agents. Fidelity & Guaranty (F&G), InstaBrain, National Life Group and Symetra are on the way. Product availability varies by state, and the products on your contract are confirmed when you contract. See each carrier's profile on the Carrier List and how IUL compares with term, UL and whole life on our Life Products page.
Contracting for IUL with BetterLifeQuotes.com
BetterLifeQuotes.com is an NGA / IMO Hybrid & Distribution Partner that will beat your current commission levels and scale your current practice. Our job is to beat your current commission level, and our mission is to make sure you scale with every life insurance product: final expense, term, IUL, UL and whole life.
Every new agent starts at a 100% commission at contracting, and solo agents who meet our 6-month minimum requirement are guaranteed more than 100%.
Back office support (a guided contracting roadmap, a members portal, a carrier resource directory and help with carrier appointments, transfers and contracting questions; sales training, telesales scripts, objection handling, closing strategies, personal coaching and ongoing professional development; an agent management system with production, commission and book-of-business reporting; the CallWave inbound call platform with lead strategy and ROI guidance; and recruiting, training and retention resources for agency growth) comes with every product we contract.
You own your book of business, your renewals and your hierarchy, even upon release, and releases are granted.
Apply as a solo agent, or see contracting for new agencies, established agencies and healthcare agencies.
IUL sales script FAQ
Do I need a securities license to sell IUL?
No. Indexed universal life is a fixed insurance product regulated by state insurance departments, so a state life insurance license is required, plus any product training the carrier asks for. Variable universal life (VUL) is different: it is a registered security and requires FINRA registration (Series 6 or 7) through a broker-dealer and, in most states, a variable life line of authority in addition to a life license.
Is IUL cash value invested in the stock market?
No. The cash value is credited interest based on the performance of an index, such as the S&P 500, subject to a cap and a participation rate. The money itself is not invested in the index.
Are IUL policy loans tax-free?
Policy loans are generally not treated as taxable income while the policy stays in force and is not a modified endowment contract (MEC). If the policy lapses or is surrendered with a loan outstanding, part of the loan can become taxable. Clients should confirm their situation with a tax professional.
Can an IUL policy lapse?
Yes. If the cash value is not enough to cover the monthly policy charges, the policy can lapse. Underfunding, low credited interest and large loans all raise that risk, which is why funding and annual reviews matter.
Who gets the 100% starting commission at BetterLifeQuotes.com?
Every new agent starts at a 100% commission at contracting, and solo agents who meet our 6-month minimum requirement (at least 6 months of continuous life insurance sales, plus the rest of our minimum requirements) are guaranteed more than 100%. For agencies, our job is to beat your current commission level.
This IUL sales script is for licensed agents and is not tax, legal or investment advice. Illustrated values are not guaranteed.
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