Best IUL with variable loan provision

[scagnt83]

Allen is correct. A term rider adds room to TAMRA/TEFRA/DEFRA.

Also, most term riders are commissionable on universal life policies.

Also, most term riders on IUL are in the 10-20 year range. They do not last the life of the policy. Only one Ive seen that does that or comes close to it is Pac Life.

The ONLY IUL I have ever found that NEEDED a term rider was Pac Life. Its built into it basically.

All others dont need it (that I have illustrated) and its just an added expense that the extra room does not make up for. An IUL is already a term policy and there is no need for additional term on top of it. Design it right with GPT combined with Opt2/1. Its unnecessary.

And there are most certainly additional MEC issues when adding a term rider to an IUL... because it does indeed drop off with most carriers. But there are WL carriers that have term riders that drop off too.

 

[hunschuld]

Allen is correct. A term rider adds room to TAMRA/TEFRA/DEFRA.

And why would you need to add room to the corridor? Because you are over funding the policy. Why are you over funding? To grow cash? What is the best way to increase the cash growth? Reduce the policy costs. What reduces policy costs? Lowing the compensation paid on the product. So a mix of base coverage that has full target and coverage that has no target and hence no compensation costs should build cash faster and have greater cash value's than a product that is full base. . The term is there so you can put in the desired level of premium without making a MEC and it produces higher cash value since the term portion has no compensation..

Otherwise there is no point to the term base blend. Just use a full base policy to take the desired premium and not make it a MEC.

So it is exactly what I said.

Many companies allow you to mix base and term for the base policy not just Pac which did pioneer the concept . Every company that competes with Pac in the advanced markets seems to offer a product. Allianz ,Lincoln Pru and several others. The companies do not for the most part advertise the feature to agents.

Adding additional insured riders or adding term on top of a fully funded base policy is not the same. Midland N?A for example has a term rider but it is not part of the base policy.It is a separate feature meant for temporary term coverage like a 10 year term policy

Where as the Pac Life Allianz etc blends are part of the base policy and are specifically there to allow the agent to reduce comp and improve cash values.The add on top drains cash value

 

[Allen Trent]

Not in a WL situation. In WL, you may want a lower base for the forever obligated premium & more PUAR room for over funding.

UL/IUL/VUL it is not as much of an issue for the reasons you mention

 

[scagnt83]

@hunschuld . You missed the part where I said most term riders on IUL pay comp. The term premium is no different than the "base premium" from a comp standpoint.

Same with WL. Most term riders pay the same comp % as the base premium.

But again, there is no point to it unless you are selling PAC Life, and you say Allianz as well (that is newer if true). And thats just because of how they built their product. That is not a normal IUL product, so to compare it to the market overall is not an apples to apples comparison.

LFG does not have a term rider in order to max out the policy. LifeComp cases do not utilize the term rider (or if they do now it is a recent change), because it does not help the CV of the policy vs. a normal max funded IUL design.

GPT combined with Opt 2 already does what the term rider is doing for a WL. (on non PacLife IUL)

 

[IULs Rule]

F&G offers bond rate guaranteed never to exceed 5% Let me know if you'd like to get appointed with them or would like me to do an Illustration for you.

 

[Sheryl J Moore]

@Laura D - I am very sorry that I-F.com did not notify me of your comment/question. I see that our colleagues have addressed your inquiry. If you still have questions, I have a knack for breaking complex concepts down, into easy-to-understand terms. Holler at your girl. (515) ANN-UITY [email protected]

 

[Sheryl J Moore]

Whoa, whoa, whoa, whoa! Let's slow down here, @hunschuld . You are comparing apples and oranges. Midland National Life and North American Company for Life & Health (both Sammons Financial companies) offer a variable loan interest provision. Allianz Life, by contrast, offer a participating fixed rate loan interest provision. They are not the same. sjm

 

[Sheryl J Moore]

@IULs Rule - your comments are very concerning. Fidelity & Guaranty Life does NOT have a "bond rate guaranteed never to exceed 5%." Are you referring to their Barclays Trailblazer Sectors 5 Index? If so, this is merely an index that has a volatility target of 5%, and it is not "guaranteed" in the least. This is a multi-asset index that currently consists of 14 different constituents and the assets constituents can be rebalanced at will. PLEASE ensure you know what you are talking about, prior to posting in a public forum. Would I be off-base if I guessed that you are appointed under an MLM? Perhaps I can assist your upline with some training? sjm

 

[IULs Rule]

Sheryl J Moore ---The following is quoted directly from one of my many illustrations from F&G.
"Variable Loans Under the Variable Loan option, the owner may borrow any amount up to the available Surrender Value. The variable loan option allows the amount of the Account Value borrowed to continue to be eligible for interest and/or index credits in the same manner as though a loan had not been taken. The amount borrowed will be charged a loan interest rate tied to the Moody’s Corporate Bond Yield Average - Monthly Average Corporates as published by Moody’s Investors Services, Inc. The maximum rate of interest charged on a Variable Loan will be 5.00%, payable in arrears. For the purpose of this illustration, the variable loan interest rate assumed is 5.00%."

 

[IULs Rule]

Whoa, whoa, whoa, whoa! Let's slow down here, @hunschuld . You are comparing apples and oranges. Midland National Life and North American Company for Life & Health (both Sammons Financial companies) offer a variable loan interest provision. Allianz Life, by contrast, offer a participating fixed rate loan interest provision. They are not the same. sjm

Sheryl J Moore --- Quote from F&G Illustration ---

Variable Loans Under the Variable Loan option, the owner may borrow any amount up to the available Surrender Value. The variable loan option allows the amount of the Account Value borrowed to continue to be eligible for interest and/or index credits in the same manner as though a loan had not been taken. The amount borrowed will be charged a loan interest rate tied to the Moody’s Corporate Bond Yield Average - Monthly Average Corporates as published by Moody’s Investors Services, Inc. The maximum rate of interest charged on a Variable Loan will be 5.00%, payable in arrears. For the purpose of this illustration, the variable loan interest rate assumed is 5.00%.