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Can someone explain to me how the 0% Fed Rate, or possible negative interest rates in the future, will affect max funded WL and IUL policies?
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I don't see how it would have any real effect. IULs contractually cannot be less than 0%..Can someone explain to me how the 0% Fed Rate, or possible negative interest rates in the future, will affect max funded WL and IUL policies?
To IUL:Can someone explain to me how the 0% Fed Rate, or possible negative interest rates in the future, will affect max funded WL and IUL policies?
I know how interest rates affect these products, but we're just guessing on what the carriers will actually do.Since we have never had 0% before, does anyone know for sure, or are we just working on educated guesses?
Depends on the strength of the carrier (to pay dividends) but you should expect them to underperform their illustrations as well.Ok well what about max funded WL policies??
Depends on the strength of the carrier (to pay dividends) but you should expect them to underperform their illustrations as well.
Keep in mind that these insurance companies mainly invest premiums/their general account in bonds.
Yield is rapidly decreasing (increasing bond costs) making it harder for them to allocate new assets.
This environment really isn't good for any product type (outside of shorts/hedges).