Last Verified: May 2026
Current IUL Cap Rates 2026: Five Carriers, Verified, with Five-Year Decline Trajectory
IUL cap rates across the industry have fallen from 12-13% in 2019 to 8-9% on most products in 2026. AG 49-B (effective May 2023) further tightened illustration assumptions. This page shows the year-by-year trajectory across five named carriers. No consumer comparison page publishes this data. We do.
5-Year Cap Rate Decline: 2019-2026
Sources: Witt Actuarial Services "A Critical Review of Indexed Universal Life", lifepro inforce cap-rate history PDF, carrier rate sheets. Approximate figures; individual product caps vary. Industry average for S&P 500 point-to-point strategy. Verified May 2026.
2026 IUL cap rates by carrier
Every cell has a primary-source citation. Rates marked "verify" could not be confirmed from carrier-published pages at time of build; verify directly with the carrier before relying on them. Last verified May 2026.
| Carrier / Product | S&P 500 Cap | Participation | Floor | Source / Verified |
|---|---|---|---|---|
Allianz Life Accumulator Life Accumulator (S&P 500 point-to-point) | 8.00% | up to 190% (participation strategy) | 0.25% | Carrier page2026-05-01 |
Lincoln National WealthAccumulate IUL / Life Elements IUL | 8.50-12.25% (varies by product and index) | N/A (cap structure) | 0% | Carrier page2026-05-01 |
Nationwide IUL Accumulator II | 8.50% | N/A (cap structure) | 0% | Carrier page2026-05-01 |
Pacific Life Pacific Indexed Performer LT | Verify at carrier | Varies by product | 0% | Carrier pageQuarterly refresh neededVerify before relying |
Securian / F&G Pathsetter IUL / Pacific Discovery Xelerator | Verify at carrier | Varies by product | 0% | Carrier pageQuarterly refresh neededVerify before relying |
What AG 49-B means for your illustration
2015
AG 49 adopted
NAIC introduces AG 49 to limit IUL illustration excesses; illustration assumptions constrained for the first time.
Dec 2020
AG 49-A effective
Loan arbitrage assumptions tightened; non-guaranteed bonus index assumptions restricted.
May 2023
AG 49-B effective
Proprietary index cap assumptions and volatility-controlled index strategies restricted. Lowest illustration ceiling yet.
What this means if your agent showed you an illustration
If your illustration was prepared before May 2023, the projected returns were calculated under less restrictive assumptions. If your illustration shows a 7% projected return, that figure is the AG 49-B regulatory ceiling, not a forecast of likely performance. Inforce illustrations from older policies may show higher projected growth than current regulations would permit a new illustration to show for the same product.
Cap rate FAQ
What is an IUL cap rate?+
An IUL cap rate is the maximum percentage of index growth credited to your policy account in a given period. For example, a 10% S&P 500 cap means your account is credited up to 10% even if the S&P 500 gains 20%. A 0% floor means you receive 0% (not negative) in a year when the S&P 500 falls. Cap rates are not guaranteed and carriers adjust them periodically, typically annually or quarterly.
Why have IUL cap rates been falling?+
Cap rates are funded by the carrier purchasing options on the underlying index. As interest rates fell from 2019 to 2021, carriers had less fixed-income yield to spend on options, so they reduced caps. Even as interest rates rose in 2022-2023, carriers had locked in lower-rate hedges and caps did not recover proportionately. AG 49-B (May 2023) also restricted the illustration assumptions carriers can use, independently of actual cap rates.
What did AG 49-B change for IUL illustrations?+
Actuarial Guideline 49-B, effective May 1 2023, restricted IUL illustration assumptions including proprietary index cap assumptions and volatility-controlled index strategies. Before AG 49-B, some carriers used proprietary indices with historically higher cap rates to project better illustrations; AG 49-B constrains these assumptions. Consumer implication: if your illustration was prepared before May 2023, the projected returns may be higher than current regulations permit agents to illustrate.
What is a participation rate vs a cap rate?+
A cap rate sets a ceiling on how much index growth is credited. A participation rate sets a percentage of index growth credited without a ceiling. Example: a 150% participation rate credits 150% of index growth. Both structures have been falling as carrier economics tighten. Some carriers have shifted from cap-rate to participation-rate products as their headline strategy; both approaches have seen declining credited amounts over the 2019-2026 period.
Can carriers reduce IUL cap rates after I buy the policy?+
Yes. IUL cap rates are non-guaranteed product features that carriers can change at their discretion, typically with notice. There is usually a minimum guaranteed cap (often 1-3%) specified in the policy, below which the carrier cannot reduce the cap. The minimum guaranteed cap is typically much lower than the illustrated cap. This is a fundamental structural difference from whole life dividend rates, which are also non-guaranteed but have a more stable historical pattern among mutual carriers.