An Indexed Universal Life (IUL) insurance policy is a type of permanent life insurance that offers both a death benefit and a cash value component. The cash value grows based on the performance of a stock market index, such as the S&P 500, but with a cap on gains and a floor to protect against market losses. This means policyholders can benefit from market upswings while having some protection during downturns. IULs provide flexible premium payments and the ability to adjust the death benefit, making them a versatile financial planning tool for individuals seeking both insurance coverage and investment potential.