EIULs have become very popular and everyone seems to be pitching them before anything else these days. What are people's opinions of EIULs compared to traditional ULs and VULs? It seems like the EIULs just seem too good to be true. I realize you do not need to have your securities license to sell these products, but I would greatly appreciate opinions of agents that are licensed to sell variable products on the EIULs. Thank you very much!
EIULs- Need an Experienced Rep's Opinion
- Thread starter rikwells
- Start date
There are two ways to use universal life insurance. One is a wealth accumulation (most notably for income generation purposes) and the other is for death benefit (cash is less important, we're worried about permanent death benefit, and the cash is there to ensure that death benefit remains in force).
Traditionally, VUL and IUL (what you are referring to as EIUL, which is a word some states have decided is a no no) have been questionable death benefit focused products. This is due to the variability (lack of predictability) of the cash account.
Now, this being said, that last statement is much more true for VUL than IUL due to VUL's ability to see a declining account balance.
As cash accumulation vehicles, they've both been great choices. Death benefit should be depressed to the lowest allowable level under DEFRA and/or TAMRA (you have to go with the higher of the two so as not to violate either one).
Concerning the popularity of IUL. This is a function of the sizzle. Insurance products have for years contained certain bonuses or immediate gratification-ish features that have helped sales. Insurance agents have proven themselves to love sizzle.
So, with bonus products mostly gone, IUL becomes the next best bet. The problem, sometimes, is a wide degree of over-promised performance. IUL is not designed to mimic the stock market. It's designed to yield a few percentage points above current assumption (plain vanilla) universal life insurance.
There's not security license required, because there is no investment in a FINRA regulated product on the behalf of the policy owner. An agent who suggests that IUL is a way to invest in the market without the risk of principal, is doing a really bad thing.
It's a lot safer than a variable product. And is a step between current assumption and variable universal life insurance. It's not the answer to all the worlds problems, and it won't cure cancer (that's what whole life is for
). It has performed remarkably well over the last decade, and will most likely continue to do so. It is a strong contender for retirement income planning scenarios.- Thread starter
- #3
- 10,318
He learned everything he knows from me... so your welcome!
Yup, everything. Even the whole life is better than any other product bit. I especially learned that part from scagnt.
- 10,318
Yup, everything. Even the whole life is better than any other product bit. I especially learned that part from scagnt.
Yep. BNTRS wasnt convinced that WL was a cure all. But then I told him about this Brandon guy who found that buying an overfunded WL policy could cure cancer. Now BNTRS is a true believer.
lachjs789
Expert
You guys should go on the road and become the first insurance comedy duo to make it in Vegas.
- 10,318
lachjs789
Expert
BaBa Booey to you. You would probably be more entertaining than half the bubble heads he has on his show. Can you juggle or ride a Unicycle?
