IULs allow your savings to grow by tracking stock market indexes, but they also protect your principal with a guaranteed minimum interest rate. If the index performs well, your account is credited with a positive return up to a cap. If the index underperforms, your principal remains safe, thanks to the policy’s minimum interest rate, also known as the “floor.” This makes IULs a valuable tool for retirement planning, offering potential tax-free income and protection against market downturns.