Can I lose money in an IUL policy?

However, you can still lose overall policy value due to internal costs — such as the cost of insurance, administrative fees, and rider charges — which are deducted from your cash value regardless of market performance, and can outpace credited interest in low-growth years.

If premiums aren't sufficient to cover these internal costs over time, especially in years with low index credits, the policy could underperform expectations or even lapse, so ongoing review with an agent is important to keep the policy properly funded.