Index Universal Popularity

[pfg1]

IDK anything about that product DHK. 4% floor means its got to be lacking somewhere else I would think. ??

The other things that I think have a big factor in the popularity of this product of late... 1) commissions can be very good, especially for the sales folks with no morals - they can sell min funded, max target ... the customer has no clue.
2) we've been on a nice bull run so these policies have don't pretty darn well since the recession.

Don't get me wrong, I'm not an IUL basher at all...it definitely has its place. I just believe that people (agents & clients) need to better understand the product, and fully know the pro's and con's before putting one in place.

 

[AndrewRoche]

Agreed. Earnings are not guaranteed in this product. I do believe that we'll still see stock market volatility for quite some time, even if we don't see it growing.

If the market shrinks down to 10,000 on the Dow, principal is still protected (aside from COI). If it bounces between 10,000 and 15,000 for years... the IUL will certainly gain, while mutual funds will continue to lose.

The main downside with IUL... are the 0% years. Get enough of those and you won't have enough compounding going on to make it work better than a WL - which has consistent interest and a great track record of dividends.

One day, I'll have to check out Guardian's Indexed Whole Life. That 4% floor sure looks attractive compared to 0%.

Ya know what's interesting. No one has ever mentioned that age underwriting classification and coi are the most important factors with IUL
You need a minimum of 15 years growth. If your client is a 48 year old smoker should you sell him a policy? A fifty year old standard male?

 

[DHK]

It's not age... as much as when the client wants to begin drawing income.

If the client is 50, and is planning to retire at 70... is there anything wrong with that? No. Proper expectations must be made.

In my process, when I'm showing a preview of the work I do... I ask about health. Why? Because my services are best used by people who are in generally good health and are more concerned about outliving their money.

While you *can* sell this concept to someone who has poor health and can be 'rated' a policy, but that means far less death benefit than is ideal for a given premium. I need to know about that up front, so I work it in to ensure that I'm working with the prospects that are best qualified for the work I do.

This also applies to advanced use of whole life policies too. If your purpose is to use life insurance for accumulating cash values, underwriting is one of the most important considerations.

If someone is in very poor health, then you should be talking about a guaranteed issue or 'FE' type of a policy to meet burial expenses and that kind of thing... NOT about using life insurance as a wealth accumulation vehicle.

However, being a smoker is a lifestyle choice. I'd rather see a smoker get some coverage and then choose to quit later... than to wait to get them coverage because they smoke and their costs will be twice as much than if they didn't.

And 'standard' IS a good underwriting class. That's why they call it 'standard'. If it's better than that, GREAT! If it's worse than that, now they know something about their health. That's how Magic Johnson found out that he was HIV positive. He applied for a life insurance policy with MassMutual and the blood work indicated it.

My job is to find the best people who are a great fit for my services, help them to want a life insurance solution, and then help them to find the money to fund it. If you understand your product and can do a decent job of field underwriting, you can make great sales and do very well for your clients.

 

[AndrewRoche]

Ya know what's interesting. No one has ever mentioned that age underwriting classification and coi are the most important factors with IUL
You need a minimum of 15 years growth. If your client is a 48 year old smoker should you sell him a policy? A fifty year old standard male?

There are certain absolutes that agents should never forget. Companies design products that they can sell for a profit and companies that take advantage of their clients sooner or later fail. The companies who change the cap and participation do so for a reason. It's not a willy nilly decision. There are those times that dictate a change that benefits the company and not the policyholder. That's just the reality of the marketplace and that's why average customers should never mix their savings and investment needs with their life insurance needs. You risk your family's financial future on a product that 98% of agents can't explain. Imagine 2008 all over again. Companies need to stay afloat and make changes and that type of situation does not benefit the policyholder. Don't get me wrong. I think it's a great product for certain people and businesses. Another example is the average return. It!s an average. Why change what you can illustrate? If it's an average why have they dropped the illustrated returns by 50%? The market is great. Stocks are up so why reduce the "average". Maybe some companies are a little more concerned with profit than their clients...just saying...this is how some people think in Realville

 

[DHK]

Well, your "realville" isn't real.

Your point of view is that all UL & IUL companies are out to screw the client and you're having a problem with cognitive dissonance in trying to accept that other companies are NOT out to screw the client.

Well, I can't help you with your cognitive dissonance. But you're looking for someone to confirm your confirmation bias, I'm sure your mutual company will be happy to send you some propaganda against indexed products.

I cannot control the education and expertise of all the agents out there. My E&O is not that comprehensive. I can only control ME and MY expertise. I know what I'm doing and so do a few agents on this forum.

 

[AndrewRoche]

David,
I understand IUL and have written IUL.

I am sending you a private message showing a few case that I have done with premiums in excess of $1,000,000 as well as actuarial reports showing how age, UW classification and COI is important. AGAIN...Great product for niche market but not for everyone!

I'll just assume that you are having a bad day and that's why your a little insulting.

"Your point of view is that all UL & IUL companies are out to screw the client and you're having a problem with cognitive dissonance in trying to accept that other companies are NOT out to screw the client.

Well, I can't help you with your cognitive dissonance. But you're looking for someone to confirm your confirmation bias, I'm sure your mutual company will be happy to send you some propaganda against indexed products.

I cannot control the education and expertise of all the agents out there. My E&O is not that comprehensive. I can only control ME and MY expertise. I know what I'm doing and so do a few agents on this forum".

You seem like a nice guy. Adults can disagree with each other without psychoanalyzing each other. Let me know what you think of the material I'm sending you.

 

[DHK]

Andrew,

I'm calling you out. You're here to disparage a product and the manner in which MOST agents sell it. I get it. I was already quoted extensively on this topic. BTW, the way most agents describe dividends from mutual companies is just as bad in my opinion.
http://www.lifehealthpro.com/2015/07/22/misrepresentation-and-ignorance-a-dangerous-blend

Here's the thing: You stated an opinion in post #24 of this thread. I then stated my own opinion next regarding your opinion.

I'm actually having a great day and I've been very calm and factual on this thread.

I don't know what your angle is. I don't know if you want to change the industry, change selling tactics, try to recruit others, or whatever.

Whenever you use terms like "everyone"... that is an absolute term. NOTHING is right for 'everyone'. There is NO SUCH THING as a perfect product/strategy for everyone.

So, I would recommend dropping that phrase from the thread. Professionals understand how to determine needs and wants... and then match them to an appropriate product. They also can evaluate each product for its own merits and recommend them accordingly.

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Thanks for the clarification. Most people contact a life insurance agent for life insurance. When they are presented with a product like IUL they walk away thinking they are able to save and protect their family. Here's a case one of my agents sold. Male 47 pref. rate. Married 4 kids makes $160,000 a year in the tech field. 7 year funding for db and cv for retirement. Paid second year. Had stroke and can now only work part time in a different type of job. Can't pay the required premiums and is uninsurable. Family now has no life coverage and he sees mortality knocking on his door. That's why I asked if you sell the combination of term and IUL and this is one simple example of why Products like this should never be sold as just another type of insurance to the average consumer. Too many agents convince themselves they are doing right by the client because they have a product that is guaranteed when in reality they are selling the product for commission and no other reason.

Looks like YOU should've done a better job of training your agents if they sold this.

 

[scagnt83]

 

[DHK]

I'm still waiting for that PM he promised me... oh well.

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He probably can't yet.

 

[AndrewRoche]

I'm still waiting for that PM he promised me... oh well.

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He probably can't yet.

Wow. This is a tough crowd. I'll get it to you and if your'e an honorable man you'll dial it back a notch and understand that this is a forum. A place to discuss products and how they are sold. I didn't say anything when your posts were full of assumptions.I know that it's a discussion and I know that sometimes people deflect answering a question by making an insinuation. No big deal.
In the meantime, run a comparison of the fifty year old using your product and any other type of investment. See how long it takes to just break even.Then do the same for a forty year old at pref plus. Big difference isn't it? The coi does matter. We'll talk soon.