Discussion in 'Indexed Universal Life Forum' started by BYSFG, Feb 3, 2016.
Depends on objective but I get your point.
I misspoke. I must've been thinking of a base policy only with guaranteed values. It takes a LONG time to get to 'break even'.
I just ran another one, and it only took 12 years on the guaranteed side (max PUA) and 8 years on the non-guaranteed side.
More like it for WL.
Like you said, IUL and WL probably has similar growth and IRR if you illustrate the IUL at around 5 to 6%, which is fair.
I do not sell IUL, but I do use VUL as an example. I explain to clients on how much responsibilities they want to take on managing their policies. I use cars as examples. WL is a Mercedes. You fill premium gas, and it would run with life time warranty. IUL in this case would be a sport car with shift assist - you can go pretty fast, and you may not screw up too bad even if you suck at driving. VUL would be a Formula one. You can go real fast and you can crash and burn if you really suck at it. Then I ask them what they want, peace of mind, or the thrill for the growth.
The real concern with UL/IUL/VUL is on the back end when you want to consume. That is when the heavy load of management on a policy begins.
I am not a big fan of using VUL/IUL for accumulation. It is too much of a hassle. Between 401K, Roth IRA, and Retail account can take care of the bulk of those without tinkering with IUL/VUL. If you are thinking of IUL, then retail index fund (low turn over, low cost, low tax implication) would come close if not rival the tax efficiency of IUL.
Just my two cents.
You should also compare the fees and cost of insurance on both policies. Generally WL has higher fees(not always). Also some of the IUL's have minimum guarantees built in which is a nice buffer and makes the decision easier, take a look at North American RapidBuilder, it has a 3% guarantee with a bit higher caps on index. Also you can surrender any year without penalty if you get in a financial bind. The trade off is the comp is lower than some other products and the underwriting is strict.
Securian/Minnesota has an historical index performance of 7.7 and there are several youtube videos which go into detail the IUL vs both 401k & Roth IRA. Considering the floor of the IUL being zero it is a better investment with (compared to the others) the only government regulation being the MEC.
Nicole, if I were you I'd be real careful allowing your case designers run your illustrations at the max allowable (most of the time curve-fitted) crediting rates. You're likely to end up with some upset customers in the future if things don't work out just right or if they short the funding a few years. Just because Minny creates some social media videos won't save you from a lot of headache and a possible E&O hit.
I run my IUL's at 6-6.25 max.
Of course you can do as you wish. Take it as a friendly suggestion.
Separate names with a comma.