Best index Universal For growth and accumulation.

[scagnt83]

If someone can fund now for 7 years, why not show continuing to fund & accumulate for longer.

Because it is not always being paid from earned income.

Its common for people to take low yielding savings to fund IUL or WL.

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Also, they still can. That is the flexibility of IUL. If they want to continue past 7 years, they can without issue.

Just keep paying premiums and keep the DB at Opt2 instead of switching to Opt1.

Even if they decided to stop paying premiums, they could keep the DB at Opt2 for a while to still have the option to pay the full GLP.

Even if they had switched to Opt1, they could still choose to restart premiums, just lower than the GLP.

 

[Allen Trent]

Plenty of IULs and WLs are set up as a 7pay.

Actually, because of MEC calculations & CVAT/GPT calculations, a 7pay or 10pay will perform better from a rate of return standpoint vs. a longer term payment period.

So one reason can just be to max out the performance in the policy.

Now its fairly negligible.... maybe 25bps, but with large sums it can add up over time.

However, stacking policies is not always better either because of the y1 premium load.

Definitely understand that. Just wasnt picking up that this was a case being funded from an existing asset.

 

[ejbarraza]

Best index Universal For growth and accumulation 25-30 years with 7-pay. I'm looking at Transamerica right now or Mutual of Omaha accumulation. Any suggestions?

For me it would have to be Pacific Life's Horizon Early Cash Value (HECV) product with an uncapped 5 year index option. Since June 2009 the average crediting rate has been 73%:


Securian's BGA 2 is also worth considering because it comes with a 3 year uncapped index with a 2% floor rate for life and generous persistency credits starting year 11. Even though the historical crediting rates for the BGA 2 are few, the predecessor BGA 1 product has a long history of outperformance.


If the client can qualify for PennMutual's Survivorship policy, then the Survivorship Plus Select IUL has a 1% floor rate and 10% multiplier on the 5/1 year blended index option with a 5%/60% cap rate this translates to a max crediting rate of 5.5% per year or 66% every 5 years.

 

[scagnt83]

For me it would have to be Pacific Life's Horizon Early Cash Value (HECV) product with an uncapped 5 year index option. Since June 2009 the average crediting rate has been 73%:]

That product did not exist in 2009....

Not a single IUL that actually is in existence has that kind of growth long term.

 

[ejbarraza]

That product did not exist in 2009....

Not a single IUL that actually is in existence has that kind of growth long term.

The IUL is new, but the index option has been around since 2009.

 

[PrivClientSG]

The IUL is new, but the index option has been around since 2009.

View attachment 9220

The "index" is only one ingredient in the recipe. People keep looking at the bar chart above the base-line. Remember, there is more than just the index, the performance, etc. So much more. Look at history. Look at the life-cycle of UL. Then look at the SGUL/NLGUL. All the best!

 

[scagnt83]

The IUL is new, but the index option has been around since 2009.

View attachment 9220

And renewal adjustments to in-force biz has caused policy returns be lower than that.

And its really no different than an IUL with a 13% or 14% Cap. Which was plentiful back in 2009... there were even options as high as 16% or 17%.

Totally different landscape now, both with the market and products.

 

[scagnt83]

The "index" is only one ingredient in the recipe. People keep looking at the bar chart above the base-line. Remember, there is more than just the index, the performance, etc. So much more. Look at history. Look at the life-cycle of UL. Then look at the SGUL/NLGUL. All the best!

You would cry if you saw how high Pac can raise their expenses on that policy... plus the issue of lower renewals over time.

 

[scagnt83]

Definitely understand that. Just wasnt picking up that this was a case being funded from an existing asset.

Well, he certainly didnt let us know! lol.

I usually assume its funded from an existing asset or savings when a client wants a short pay policy design.

 

[Allen Trent]

Well, he certainly didnt let us know! lol.

I usually assume its funded from an existing asset or savings when a client wants a short pay policy design.

Yeah, that is why I asked him. I couldn't tell if he was asking based on a case funded at 7 pay test levels or only funded for 7 years