Indexed Universal Life Insurance connects its cash value account to which of the following?

Indexed Universal Life Insurance (IUL) is a type of permanent life insurance that allows policyholders to accumulate cash value that is linked to a specific market index, such as the S&P 500. The cash value growth in an IUL is typically credited based on the performance of this index, providing the policyholder with the potential for higher returns than traditional whole life policies which have a fixed interest rate.

The connection to a market index means that the policy can potentially benefit from the upward movements of the index, while often also including caps to limit the maximum return and floors to protect against losses, ensuring that the cash value does not decrease below a certain threshold regardless of market performance. This strategic linking to market indices differentiates IUL from other types of insurance products that are more directly tied to fixed interest rates or other metrics unrelated to market performance.