The Floor in an indexed life insurance policy is the minimum interest rate your policy’s cash value can earn, even if the market index performs poorly. For instance, if the floor is set at 0%, you won’t lose cash value due to a market drop, though you won’t gain in that year either.
This feature provides safety by ensuring your cash value doesn’t decrease due to negative market performance. It’s a useful protection for policyholders who want to benefit from the market’s potential upside without risking losses.