Chargeback for IUL Underperforming (Accordia)

Discussion in 'Indexed Universal Life Forum' started by Champion692G, May 2, 2017.

  1. VolAgent
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    VolAgent Well-Known Member

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    Interesting idea.

    I can't see how it would work though. One, why would you do it that way? Two, if it did, then poor performance should cause the target premium to rise, not fall. So if anything, it should generate a higher commission. I can't see how poor performance would lead to a lower target premium as if anything the policy now needs more money, not less.

    Again, an interesting idea. I simply don't see how it would generate a chargeback in a situation like this. Of course, why in the world would a company chargeback commission because an IUL under-performed?
     
  2. DHK
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    DHK Well-Known Member

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    What's odd about this whole thing is that the policy under-performed TO THE ILLUSTRATION - implying that it is the AGENT'S FAULT rather than the underlying index performance.
     
  3. VolAgent
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    VolAgent Well-Known Member

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    Please clarify. Are you saying you feel that the company is trying to blame the agent, versus acknowledging the index didn't perform as expected? Or are you saying that the agent set the interest rate too high in the illustration and is to blame?

    An illustration isn't worth the paper it is printed on. Something will always be different: premium amounts and timing, company expenses, index performance, interest rates, etc. Way too much for anyone to control, if actual performance is in the same ballpark as the illustration, you did great.

    Now, I have seen some where the policy actually outperformed the illustration, and that is awesome. Each year it does that increases the likelihood it will outperform as a whole.
     
  4. DHK
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    DHK Well-Known Member

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    This is in the first post:

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    Then I asked if the difference was actually credited to the policies and the OP said yes.

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    So yeah, Global Atlantic (Accordia), according to this thread, (through the default illustration rate - per the OP) is blaming the agent for "over-promising" what their policies would do and charged back the difference from the agent to credit to the policies.
     
  5. VolAgent
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    VolAgent Well-Known Member

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    I would love to see the contract language that would allow it.

    Regardless, that is extremely shady behavior, if the OP's account is true. If he used the default illustration rate, it is not his fault the policy under-performed.
     
  6. DHK
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    DHK Well-Known Member

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    That's a generally standard practice and rate for commission advances.

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    He posted some screenshots of a basic contract agreement, but nothing about the compensation arrangements or when an incident of charge back can occur.

    I'd love to see that language too... then we'll blackball them on the forum, if it is true. It would certainly turn me off to doing any business with any company that is not a US company. (They are based in Bermuda. https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=182600212)
     
  7. jboussea
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    jboussea Well-Known Member

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    let's provide you with high illustration rate so you can and get a lot of policies with us over the other guys.. and then when your policy underperforms .. we'll blame you for using our high rates ..
     
  8. scagnt83
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    scagnt83 Well-Known Member

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    None of this makes sense.

    The market is up a good bit over the past 5 years. Most IULs ive sold are currently OVER their illustrated values. I dont have a single policy thats under what was illustrated.

    Even at rosy illustration levels, it seems to me that most policies over the past 5 or even 8 years, would be at strong levels. Unless they just stuck it all in the fixed account.... or if it was all in a Monthly Point to Point allocation... but a traditional Annual Point to Point allocation has killed it over the past 8 years.


    I would bet its because of a large Loan or Withdrawal. Just a guess though. But underperformance due to index returns seems improbable.
     
  9. Norwayguy
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    Norwayguy Well-Known Member

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    What I took from this is they are paying you renewals if this was because the policy didn't perform causing them to take back commissions what's changed that they are paying renewals now?
     
  10. jboussea
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    jboussea Well-Known Member

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    Exactly .. I was thinking about that.. . Most IUL's should be above the 7 and 8% illustration rate.. they' haven't been around for that long .. unless the agent was not using the S&P point to point ..
     

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