Any Feedback On The Nationwide Insurance IUL?

[scagnt83]

I view LTC as separate and distinct. I also view an LTC rider (which has a cost from date of issue) with a pool of money, different than accessing DB for LTC reasons (if a carrier offers that).

Maybe, maybe not. Depends what the life policy was purchased for.

For people who cant pass traditional LTCI UW, or even the modified version that true LTC Riders do, the DB acceleration can be a good alternative to provide protection.

Some of the accelerated riders do not require a permanent impairment. In that case, its essentially just a different set of numbers for the same effective benefit.

Neither scenario is all that different than the intent of purchasing a true Hybrid LTC.... just much better CV and DB.

 

[rousemark]

Most carriers allow the agent to reduce the illustrated Current Rate.

Most IULs right now have a max illustrated rate in the 5.5%-6% rage.

Take the illustrated rate down to 3% or 3.5% and see how it performs. Many will lapse after 20 years at that rate.

IULs are required to show Guaranteed, Mid-Point, & Current.
Current rates or "illustrated rate" are set by an algorithm developed in regulation AG49A.

They are currently working on AG49B which will further refine how multipliers affect illustrated rates.

The illustrated rate is not where the real danger lies. The real danger is a company raising the cost of insurance to the max and you can't show that on most illustrations.

 

[PrivClientSG]

Maybe, maybe not. Depends what the life policy was purchased for.

For people who cant pass traditional LTCI UW, or even the modified version that true LTC Riders do, the DB acceleration can be a good alternative to provide protection.

Some of the accelerated riders do not require a permanent impairment. In that case, its essentially just a different set of numbers for the same effective benefit.

Neither scenario is all that different than the intent of purchasing a true Hybrid LTC.... just much better CV and DB.

Agreed. I strictly meant as it relates to the life policy. Traditional LTCI is ideal, and yes, if that's not feasible the LTC riders are a good alternative, and if that's not available, the DB acceleration.

 

[Tahoe Ray]

The illustrated rate is not where the real danger lies. The real danger is a company raising the cost of insurance to the max and you can't show that on most illustrations.

All of the IUL quotes I run allow you to show max charges.

 

[Tahoe Ray]

white collar only,

They allow a ton of occupations under that rider. Electricians, plumbers, crane operators, etc. Many of these trades make great money but want a simple solution and 360 is a good option for them.

I can send you the occupation guide if you want to take a look.

 

[rousemark]

All of the IUL quotes I run allow you to show max charges.

I know he guaranteed column shows minimum interest and mac charges.. But can you show current interest rates with max charges?

 

[ATM]

Like every IUL the Nationwide product has an S&P500 PTP. If you don't like the other indexes, just use that. It is 9% cap (and has been for as long as I have been aware of the product) and has a .5% floor meaning never a 0% year. The .5% will cover some or all costs of the policy in bad years. That's good.

It's also a low cost policy. another good.

As for the Zebra and whatever other index they have, choose at your own risk, but with par rates as high as they are currently, I'd put some into them and see what happens. If you understand how they work, then you might be more comfortable.

 

[scagnt83]

If you understand how they work, then you might be more comfortable.

Understanding how they work is exactly why I am not comfortable with them.

They have been around the FIA space for a decade now. Marketed as a "game changer" for client returns. Well.... that never happened... a few did better than the S&P, most didnt. Plenty of FIA agents/clients were not happy with real world results.... and these are hybrid indexes that backtested amazing, Im talking 11%-15% returns on the backtesting.... some showed a rolling 20year low of 4% or 5%.... and somehow they never broke 5% over the actual 10 years they existed!

Its easy to take historical factors, put them into an algorithm, and it would have killed it during that given time period. Traders/Firms have been doing that for 100 years now. But they almost never match that historical performance, because the factors moving the market are constantly changing. What caused it to go up and down 20 years ago is not the same as what causes it to go up and down today... and in 5 years it will be a different set of factors... and again in another 5 years.

Trying to "pick" the winners and losers is a dangerous game in the market. Hybrid indexes are just attempting to picking the winning and losing "factors" that move the market. Just look at the change in whats moved the market over just the past 4 years... its literally changed yearly. No historical based algorithm can cover that.

 

[Sheryl J Moore]

@jtow11 - any type of universal life insurance product has a primary reason that it was priced for, whether that be for low-cost death benefit, no lapse guarantees, cash accumulation, or others. It is of paramount importance that you do not use any one IUL product as a one-size-fits-all solution for clients. Depending upon the clients' needs, there may be different products that will address these different objectives. While I agree with nearly everything that @PrivClientSG suggests, I would not judge a product by whether/not it is approved in the state of New York. That state is essentially an "island" of regulation, and so much more strict than any other state. Their regulations result in relatively-less competitive products, and many companies choose not to do business there at all, as a result. Their compensation requirements alone, make it challenging for insurance companies to offer competitive product there. It is my personal opinion, as someone who aids the NAIC, that New York caters to mutual insurers that sell par whole life, and are patently opposed to indexed life. No product is "bad." Products are merely tools. sjm

 

[Sheryl J Moore]

@jtow11 @scagnt83 has some sage words of advice. Indexed annuities have been available since February 5, 1995. Indexed life has been available since January 6, 1997. Hybrid indices first hit the scene in 2012. Most of the hybrid indexes are developed within a month of their product launching. They largely have no historical performance, but are "backcasting" returns. Often the constituents in these indexes can change, as can their allocations. What's more- I am frustrated that many of the indexes have annual fees, which are deducted from the performance of the index, and have the effect of drag on the product, but agents rarely know this. The bottom line is that hybrid indices are not BAD, but they are often not researched and misleading in their illustrations. Research the indexes just as well, if not more than, you would the product. sjm