Avg percentage of target on IUL

Jan 13, 2018

  1. pfg1
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    pfg1 Guru

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    When you guys are designing IUL's... what typically is your target %?
    I don't do alot of IUL, I do much more WL. But when I do, I design max funded the comp portion is always quite low. I want my clients to have a good chance of succeeding, and have the ability to build the most cash they can with the dollars they spend.

    I just ran one with $18k annual prem, target is less than 30%.
    That is how I like to run them, for the best interest of my client. I absolutely hate when I come across one that a client has with target at 100% of the premium. Or worse, they are paying min payment "because the agent said they could and it would still work". I have a client that has one like that, he is still paying min payment even though I told him it wont last if he doesn't bump up the premium. Funny, he got mad about it when I told him... but still hasn't done anything about it (4yrs later).
     
  2. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    That is about right. It varies based on the carrier.

    Total IUL comp is not going to be any higher than a fully overfunded WL.

    Instead of 50%-60% on 50% of Premium, plus 4% on excess.
    You get 80%-100% on 30% of Premium, plus 4% on excess.

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    I have seen way too many existing IULs that were run at Target or even worse, at Minimum Premium. Ive seen people who have lost hundreds of thousands in potential gains due to it.

    Obviously I blame the agent, but I also blame the carriers. How some of those policies pass compliance review is beyond me. Look for some bigtime class-actions in the future. This time they cant claim ignorance and they cant blame interest rates.

    ---

    And Ive seen people not do a thing just like you. Often they just dont trust anyone or anything after something like that. Or... they want to be made whole again... or even more than that.

    I once showed a prospect (who contacted me about an existing policy) how moving to a properly designed product and just continuing existing premiums in that product, would give them around $1,000,000 more than their current policy by year 20. They would have recouped their previous premiums within 3-6 years.

    I showed them other options too. Nothing was good enough. They wanted to be made whole on their previous premiums. They signed the illustration.... ain't gonna happen without legal action. Ive seen a few like that where they were just too jaded to make a decision. Some of them even asked for last-minute increases to the DB and the agent just went along with it and didnt explain the ramifications. Very costly mistakes.

    Carriers will regret not having more oversight on IUL designs.
     
  3. pfg1
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    Thanks SC. I guess me and you are the only ones who look at how we design our cases.
    Or the vast majority sell at target.

    Ok, ok... just kidding. ;)

    But surprised nobody else has chimed in. I wonder if many agents just use the illustration provided by the company? I wonder how many "company provided" illustrations actually run max funded? My guess is many that are run, don't.

    I personally like to run my own so I can design the way I want, vs what they give me.
     
  4. jboussea
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    jboussea Guru

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    Thirty is where pretty much NA, Allianz and Penn. I've actually never written an Allianz policy but I run the quotes and that comes up.. Granted I've never actually done the calculation but that seems about right.

    As far as what other agents do .. I must say for all the bad mouthing IMO's get .. I never had an IMO tell me to run an IUL at target. I think bad IUL's out there are more of a case of icompetence and also some people try to "get the sale" when it's not there.

    ..that's just my speculation .
     
  5. pfg1
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    pfg1 Guru

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    Agree, incompetence can have alot to to with it. I don't think its necessarily the IMO's doing that either....its agents. I've run into a few of the MLM IUL companies that have seem to make a habit of running up the commission, and down the payment. When unscrupulous folks realize they can make alot of $ on a small premium due, unfortunately it happens.
     

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