Open an in-force illustration on a well-funded policy in its third or fourth decade and the death benefit column starts climbing, even on a level death benefit design that was supposed to stay flat. Nobody bought a rider and the policy didn't change. The corridor did it.
The corridor is a requirement in the tax code. For a contract to be treated as life insurance and get life insurance tax treatment, the death benefit has to stay a certain percentage above the cash value. Section 7702 sets those percentages by age. At 40 and under, the death benefit has to be at least 250% of cash value. The required percentage steps down as the insured ages, reaching 100% at 95, where the death benefit and the cash value are finally allowed to be the same number.
So a 40-year-old with $100,000 of cash value needs at least $250,000 of death benefit. Usually that's no issue at all, because the policy was issued with far more coverage than that. The corridor sits well below the face amount and nothing happens.
Then the cash value keeps compounding. Somewhere in the fifties or sixties on a policy funded near the maximum, the cash value multiplied by the corridor percentage catches up to the face amount. From that point the death benefit has to rise to stay ahead of it. A $500,000 policy whose cash value reaches about $270,000 at age 50, where the required factor is 185%, is sitting right at the corridor limit. Every dollar of cash value after that pushes the death benefit up by $1.85.
Two things follow, and they run in opposite directions.
The good one: that extra death benefit is free in the sense that you never applied for it, never took an exam for it, and can't be turned down for it. It's a tax-code consequence of the cash value you built. A family that thought they were leaving $500,000 can end up leaving $700,000, and all of it passes to the beneficiary with no income tax.
The cost one: death benefit isn't free to the carrier, so it isn't free to you. Cost of insurance is charged on the net amount at risk, which means the death benefit minus the cash value. When the corridor forces the death benefit up, the net amount at risk goes up with it and the monthly charges rise. On an IUL, which means indexed universal life, those charges come straight out of the account value, so corridor growth in the later years shows up as a bigger deduction every month. The rising charge inside every IUL explains how that charge is built.
The corridor is also the reason you can't pour unlimited money into a small death benefit. It's one of the two tests a contract has to pass, alongside the premium limits, and guideline premium or cash value accumulation covers which test yours runs on. A policy designed for cash value is built right up against those rules on purpose, carrying the smallest death benefit the tax code will allow for the premium going in. Building one that way is what max funding means, and why max funding an IUL matters goes through why the design decides more than the product does.
I'm a licensed insurance broker and not a CPA, and the corridor percentages sit in the tax code, which means Congress can move them. Order an in-force illustration and read the death benefit column year by year. Remember that the columns past the guaranteed ones are a projection and not a promise. If it stays flat the whole way, the corridor never binds on your contract. If it turns upward somewhere in your sixties, the corridor is what turned it, and the charges in those same years are being calculated on the larger number. Ask the carrier to show you the policy charges column right next to it so you can see both sides at once.