Index UL Tied to S&P500

[tospears]

Guys, I'm 7 and 66. I just sell the VUL.
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Also...I don't work for a mutual.

 

[scagnt83]

Guys, I'm 7 and 66. I just sell the VUL.
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Also...I don't work for a mutual.

So? Thats fine to just sell VUL and not IUL if your not comfortable with IUL; but to say that the name of the product is misleading is asinine.... a major part of the performance of the product is dictated by the index, of course it does not directly participate in the index (this is very clearly stated in all illustrations and applications), but returns in the indexed allocation are affected by the index... not sure what else to name it or to call the product....


And to say that no major company carries this product is just plain wrong. Do you not do much LI? Or do you just work with limited carriers?



Comparing IUL to VUL is not apples to apples either. They both have different fits for different situations.

Many IUL clients do not have the risk tolerance or the need for a VUL.

With so many easy ways to invest in equities these days, most people are already too overexposed to the market as it is.
This is why having no market risk and locking in some guarantees is very attractive to many people, and fits nicely into many peoples financial portfolio.


Having your 7 is great, but it does not mean that you have to run every client through your grid....
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And you say that you just sell VUL; is this in lieu of IUL, or is that just a blanket statement?

 

[tospears]

Listen, I am very familiar with the IUL. Trust me, nothing is being forced down anyone's throat here. The Variable has guaranteed DB and market growth potential. We could. Argue this all day. I meet the clients who have underfunded, exploding UL with some frequency and the promises of gains and huge cash values are a joke. Pushing the IUL now is the same as selling UL in the 80's or early 90's when interest rates were 8 or 9%.

 

[DHK]

The more times you have to say "if", the less you are talking about insurance.

You say that your "Variable has a guaranteed death benefit"... what is the cost of insurance as it accumulates between ages 70 and 90? Do you ever see the costs of insurance increase PAST the illustrated cash values? How "guaranteed" is that death benefit?

What happens to those insurance costs when the market goes down and the costs are charged against a lower asset base? Oh, that's called reverse-dollar-cost-averaging. I bet your illustrations don't show anything like that.

The one thing I can GUARANTEE for my clients... is market volatility. The market will continue to go up and down. By how much? Who knows. I think the market is going to be a "yo-yo" for quite some time - especially since politics is directing the economy more than anything else.

Wouldn't it be nice to get the upside without the downside? If you didn't get the downside, do you know how much you "beat the market"? You beat the market by 100%! If the market is down 12% and you're still at 0%, YOU WIN!

I certainly hope you have some kind of NLG riders on your VUL policies. I think VUL is best for niche situations - like executive deferred compensation plans and other situations like that.

VUL is nothing more than Buy Annually Renewable Term and Invest the Difference in a very expensive portfolio of mutual funds.

At least IUL has principal protections on the "invest the difference" portion that has index-linked interest.

 

[VolAgent]

Listen, I am very familiar with the IUL. Trust me, nothing is being forced down anyone's throat here. The Variable has guaranteed DB and market growth potential. We could. Argue this all day. I meet the clients who have underfunded, exploding UL with some frequency and the promises of gains and huge cash values are a joke. Pushing the IUL now is the same as selling UL in the 80's or early 90's when interest rates were 8 or 9%.

So why not sell him what he wishes he bought way back when, a whole life policy? Or at least a no-lapse UL, sell him something that is contractually guaranteed. Instead, you are going to sell him another "trust me" product. You might as well send his lawyer your contact and list of assets now.

And no, I'm not against VUL. It can be a good product. But you are taking someone who got burned by one "trust me" product and trying to up the ante by putting him in an even risker product. Put him in a whole life or no-lapse UL so he can sleep at night.

 

[Brokers Alliance]

We subscribe to a service that monitors the policy provisions of IULs, including "caps" and so called "uncapped" rates related to the S&P 500. Feel free to call Steve or Eric for any information on IUL policy provisions at Brokers Alliance at 1 800 290 7226.

 

[tospears]

i'm a fan of the no lapse ul in the case of older consumer (option a mostly). The guaranteed db on our VUL works just like the "no lapse" feature of the ul. the cost of insurance comes from the fixed account. these are great questions btw.
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I enjoy this forum. "guys like us" have few occasions to voice our opinions and have people really give a damn.