Protective Indexed Choice UL Review: For Existing Owners

First, can you still buy it?

No. Protective Indexed Choice UL was Protective Life's only indexed universal life (IUL) policy, and it is no longer sold to new buyers. Protective's riders and endorsements guide, a consumer brochure that lists the policies each rider is available on, included it in its October 2024 edition. The December 2025 edition lists Protective's term, universal life and variable universal life policies and leaves Indexed Choice UL out. Protective's consumer page on IUL describes how IUL works but names no policy. We found no public discontinuation notice, so we cannot give a date.

This review is written for people who already own the policy and want to understand what they have and how to keep its lapse protection. If you are shopping for a new policy, it tells you what this one was built for, but you will need to compare policies that are sold today.

For the company's ratings, ownership and record, see our Protective Life company review.

What it was built for

Indexed Choice UL is a death benefit policy with some market-linked upside. It is not an accumulation IUL.

Protective's product guide leads with the guarantee: the policy "will not lapse before age 90 as long as premiums are paid on time and there are no policy loans or withdrawals" (age 85 in New York). That protection covers the death benefit only, not the cash value.

Protective's own February 2025 consumer example shows the intended use. For a hypothetical 55-year-old man in the standard health class buying a $2,000,000 death benefit, it solved for the premium needed to keep lapse protection to age 90, paid to age 100: $28,404 a year. That is how you design a policy for a guaranteed death benefit, not for building cash to borrow against in retirement.

The crediting design points the same way. There is one index, the S&P 500, with a modest cap. Protective's IUL 101 consumer flyer said that because it applies "a more practical rate" and keeps "policy fees low," owners could have the potential to grow more cash value. That describes a simple, modest design. It is not a promise of growth.

How it works

Here is the money flow in plain terms, from Protective's product guide:

1. You pay a premium. Protective deducts a premium load, guaranteed never to exceed 12% of each payment. The current load may be lower.
2. The rest, the net premium, goes into your policy value. You split it between a fixed account and an index account.
3. Every month, Protective deducts a $9 administrative charge, a monthly expense charge, the cost of insurance and any rider charges, in proportion from the fixed account and each index segment.
4. At the end of each one-year segment, the index account earns a credit based on the S&P 500's change, up to the cap and never below 0%.
5. After the first policy year, you can borrow against or withdraw from the cash value, at the cost of the lapse protection.

The key point: the 0% floor protects the interest credit, not your cash value. In a year the index falls, you earn nothing, but the monthly charges still come out. Protective's own guide says so. The cash value can shrink.

This is life insurance, not an investment account. See is IUL a good investment if you are weighing it against one.

The index account and rates

How the index account credits interest

• Index: the S&P 500, not including dividends.
• Segments: each amount moved into the index account starts a 12-month segment on the 15th of the month. You can hold up to 12 segments at once.
• Participation rate: 100%, guaranteed for the life of the policy. The full index gain counts, up to the cap.
• Cap: set by Protective and subject to change, but guaranteed never to fall below 3%.
• Floor: 0%.

New premium aimed at the index account waits in the fixed account until the next 15th. After the first year, you can move up to 100% of the fixed account into the current index segment, or move a matured segment to the fixed account once a year. You cannot move money between index segments. Taking a withdrawal from a segment early reduces its credit, and a full surrender forfeits the credit on any partial segment.

Current rates: available on request

Protective does not publish current caps for Indexed Choice UL. The only public figures we found are old, so we show them here with their dates rather than as today's rates:

If you own a policy, your annual statement shows the cap on your segments. Ask Protective for the current cap in writing, along with the current fixed account rate. See IUL cap rates.

Hypothetical crediting examples

These examples are hypothetical. They use a made-up 8% cap to show the math. They are not a forecast or a current rate, and they leave out all charges.

The last column is the worst case Protective's guarantee allows for the cap. We have no evidence Protective has set the cap that low, but it is the guarantee, and it is worth knowing on a product that is no longer competing for new buyers.

Charges

Protective's product guide names the charges and gives some amounts. Ask Protective for every amount, current and guaranteed maximum, on an in-force illustration.

The premium load is the charge to weigh hardest. At up to 12% of every dollar you pay, for as long as you pay, it adds up on a policy funded for decades. For a pure death benefit design with level premiums, that matters less than the guarantee you are buying. For anyone hoping to build cash value, it is a heavy drag. See IUL fees and charges and IUL surrender charges.

Loans and withdrawals

After the first policy year, you can take loans and withdrawals. Protective's guide gives these terms:

• Loans: interest is charged in arrears, at a rate guaranteed never to exceed 8%. The current rate may be lower. Protective's consumer materials do not say what rate borrowed money earns, so ask.
• Withdrawals: a $25 fee each time. A withdrawal lowers the death benefit, subject to minimums, and may trigger surrender charges on a pro rata basis.
• Both affect the lapse protection. The age 90 guarantee assumes no loans or withdrawals. Taking either can end it.

That last point is the heart of this policy. Borrowing from it for retirement income works against the reason most people bought it. See IUL policy loans and loans vs withdrawals.

Taxes. Protective's guide notes that loans are generally not taxable, and withdrawals are taxed only to the extent they exceed your basis, what you paid in. That holds while the policy stays in force and is not a modified endowment contract (MEC). A policy that takes too much premium too fast in its first seven years becomes a MEC, and then loans and withdrawals are taxed as gain first, with a 10% extra tax before age 59 and a half, with certain exceptions. The biggest risk is a lapse or surrender with a loan outstanding: the gain becomes taxable income that year. See IUL taxes.

Riders and built-in features

Protective's October 2024 riders guide lists these for Indexed Choice UL:

• ExtendCare rider (chronic illness). Advances part of the death benefit if a licensed health care practitioner certifies you are expected to be unable to perform two activities of daily living for at least 90 days. There is a 90-day waiting period, benefits can be taken monthly or as a lump sum, and the lifetime maximum is 100% of the death benefit at the time of claim. You choose a monthly maximum at issue between $3,000 and Protective's current per diem limit, and no more than 5% of the face amount. It has a monthly charge and must be added at issue. Protective's February 2025 flyer says premiums and policy expenses are waived while benefits are paid, and permanently after three years of chronic illness. The same example shows the cost: for the same premium, lapse protection dropped from age 90 to 86. ExtendCare falls under IRC 101(g), is not long-term care insurance, and can affect Medicaid eligibility. See IUL chronic illness riders.
• Terminal illness endorsement. Included. Up to 60% of the death benefit or $1 million, whichever is less, if life expectancy is six months or less. No premium, but an administrative fee of up to $300 applies, and the death benefit drops by the amount paid plus interest.
• Overloan protection. A built-in endorsement that can keep a heavily borrowed policy from lapsing, with a death benefit of at least $10,000. The policy must have been in force at least 20 years, you must be at least 65, withdrawals must equal total premiums paid, policy debt must be at least 95% of the cash value and exceed the face amount, and the policy cannot be a MEC. Not available in New York. See overloan protection.
• Waiver of specified premium if you become disabled (applicants 18 to 55, coverage ends at 65, six-month waiting period).
• Accidental death benefit (issue ages 18 to 60, up to $250,000) and a children's term rider (up to $25,000 per child, convertible without evidence at 25).
• Income Provider option, at no cost, which lets you set how the death benefit is paid to beneficiaries.

You can also raise or lower the death benefit without buying a new policy, subject to Protective's rules.

How the illustration is built

Decisions on this policy rest on an illustration, a year-by-year projection. The guaranteed column assumes maximum charges and the guaranteed minimums. The non-guaranteed column assumes today's charges and an illustrated rate held level for decades.

The NAIC's AG 49-A limits how high that illustrated rate can be. In Protective's February 2025 example, with an 8.5% cap, the maximum illustrated rate was 5.55%. Protective's own disclosure on that flyer says the non-guaranteed elements are "not likely" to continue unchanged, and that more premium may be needed to keep the policy in force.

For owners, the useful document is an in-force illustration run at today's cap and charges. Ask for one at the current rate and one at a rate a point or two lower. Our own rule for hypotheticals is to stay at or below the AG 49-A limit and never above 6.5%. Our guide on how to read an IUL illustration walks through each column.

If you own one

• Protect the lapse guarantee. Pay on time. Avoid loans and withdrawals unless an in-force illustration shows what they do to the guarantee.
• Get your numbers in writing. Ask Protective for your current cap, fixed rate, premium load and an in-force illustration.
• Think twice before replacing it. A new policy means new surrender charges and new underwriting at your current age and health. Replacement makes sense only if the numbers clearly favor it. See our policy review.

Protective's life insurance customer service line is 1-800-866-9933.

Who it fits

• You already own it, you want a death benefit that lasts to age 90 or beyond, and you can keep paying the planned premium on time.
• You value a simple design and an A+ rated insurer more than cash value growth.
• You may want chronic illness coverage through the ExtendCare rider and bought it at issue.

Who should look elsewhere

• You are shopping today. It is no longer sold to new buyers. Compare current policies in our IUL comparison tool.
• You want to build cash value for retirement income. One index, a low cap and a load of up to 12% on every premium make it the wrong tool. See max-funded IUL.
• You plan to borrow from the policy. Loans can end the lapse protection that is its main feature.
• You mainly want the lowest-cost permanent death benefit. Guaranteed universal life may cost less for the same coverage. See IUL vs VUL vs GUL.