Free tool · Growth
What would a cap and a floor have done in real market years?
Replay S&P 500 history from 1980 to 2025 with your own cap, participation rate, floor and yearly charge. See which years the cap cut short, which years the floor protected, and what charges take.
2006 to 2025, after charges
$320,219
From 2006 to 2025, the S&P 500's price grew 8.9% a year. With a 10% cap, 100% participation and a 0% floor, the account would have been credited 7.1% a year before charges, and 6% a year after a 1% yearly charge.
- Years cut by the cap
- 13
- Years credited at the floor
- 5
- Worst year, 2008
- −38.5% → 0%
See every year
| Year | S&P 500 price | Credited | Value after charges |
|---|---|---|---|
| 2006 | +13.6% | 10% (cap) | $108,900 |
| 2007 | +3.5% | 3.53% | $111,617 |
| 2008 | −38.5% | 0% (floor) | $110,501 |
| 2009 | +23.4% | 10% (cap) | $120,335 |
| 2010 | +12.8% | 10% (cap) | $131,045 |
| 2011 | 0.0% | 0% (floor) | $129,734 |
| 2012 | +13.4% | 10% (cap) | $141,281 |
| 2013 | +29.6% | 10% (cap) | $153,855 |
| 2014 | +11.4% | 10% (cap) | $167,548 |
| 2015 | −0.7% | 0% (floor) | $165,872 |
| 2016 | +9.5% | 9.54% | $179,880 |
| 2017 | +19.4% | 10% (cap) | $195,889 |
| 2018 | −6.2% | 0% (floor) | $193,930 |
| 2019 | +28.9% | 10% (cap) | $211,190 |
| 2020 | +16.3% | 10% (cap) | $229,986 |
| 2021 | +26.9% | 10% (cap) | $250,455 |
| 2022 | −19.4% | 0% (floor) | $247,950 |
| 2023 | +24.2% | 10% (cap) | $270,018 |
| 2024 | +23.3% | 10% (cap) | $294,049 |
| 2025 | +16.4% | 10% (cap) | $320,219 |
The math, in the open
How this is calculated
No black box. Every formula the tool uses is written out here, so you can check it yourself.
For each calendar year in the window, the tool takes the S&P 500’s price change (dividends excluded) and works out what would be credited:
- In a year the index rises, the gain times the participation rate, but never more than the cap. With “No cap” ticked there is no cap, and the spread is taken off the gain instead.
- In a year the index falls, or the spread leaves less than the floor, the floor, often 0%.
After each year’s credit, a yearly charge comes out as a share of the value. It stands in for everything a real policy deducts. Real charges are not a flat percentage: the cost of insurance rises with age, charges are often heaviest in the first years, and they depend on your health rating and death benefit.
The tool starts from one amount and adds no premiums, so the crediting is all you see. It is a way to understand the trade between a cap, a spread and a floor, not a forecast. Past index performance does not predict future results, and an insurer’s caps and rates can change.
Data: S&P 500 calendar-year price change, 1980 to 2025, from S&P Dow Jones Indices.
What is a cap in indexed universal life?
The cap is the most interest that can be credited in one crediting period, usually a year. If the index rises 18% and the cap is 10%, the policy is credited 10%. Insurers can change caps on existing policies within limits stated in the contract.
What does the floor protect?
The floor is the least that can be credited, often 0%, and on some policies a little more, such as 0.75%. A year when the index falls is credited at the floor instead of a loss. It does not stop policy charges: the cost of insurance and other charges still come out, so the cash value can fall in a year credited at the floor.
What is an uncapped strategy?
An index strategy with no cap on the interest credited. In exchange it usually credits a smaller share of the gain (a lower participation rate) or takes a spread off the gain first. Tick “No cap” in the tool to see how one would have behaved, and try different spreads and participation rates.
Why does the tool use the price index without dividends?
Index crediting in an IUL follows the index’s price change. Dividends are not included, so comparing an IUL with an index fund that reinvests dividends would need the fund’s total return instead.
Is this an IUL illustration?
No. An illustration is a document the insurer produces for a specific policy, age, health rating and premium, following regulatory rules. This tool only shows how crediting terms behave across real market years, with one simple charge standing in for all policy costs.
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