Indexed Universal Life Insurance (IUL)

Discussion in 'Indexed Universal Life Forum' started by Brokers Alliance, Feb 11, 2011.

  1. Brokers Alliance
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    Brokers Alliance Well-Known Member

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    Indexed Universal Life Insurance (IUL) – I just want to give everyone selling IUL a heads up. As you know, financial advisors have been trumpeting the IUL “no down side” in a bad market, i.e. no policy losses. However, policy expenses like premium loads, admin fees and (the biggest one of all) cost of insurance are debited from the account cash values. Depending on the policy, these expenses could be at the least 2-3% or more, resulting in a loss. That’s why I like IUL policies that have floor rate guarantees to pay part or all of the annual policy expenses. Remember, the S&P went negative three straight years from 2001-2003, so it’s an issue.

    IULs are very popular. If they are designed correctly, they can generate an excellent tax free retirement income stream that will not be included in the provisional income test for social security benefit taxation. - -Steve Savant, host of the Business Insurance Zone
    contact Steve at [email protected]
     
    Last edited: Jun 29, 2012
  2. coachd
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    coachd Well-Known Member

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    This is right on. I never say to a person "you will never loose a dime in an IUL." They need to understand fees. Agents that are not talking about this may get hit hard. I think that the big ugly regs will come in and start hitting agents hard, and once again if we do not watch what we do the GovT. will want to come in and say it is under the SEC.
    Not that there will not be a fight about that, but just more ways they can make the insurance agents out to be big and bad.
     
  3. scagnt83
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    scagnt83 Well-Known Member

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    You would be a fool to sell an IUL with no positive guarantee on the indexed side.
     
  4. sell more life
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    The top IUL's for 20 year Net Cash Value accumulation and IRR (based on actual gains and expenses) were 1) North American Life, 2) Minnesota Life 3) Midland National Life 4) Allianz 5) Old Mutual (now F&G).... Surprised, well maybe not that surprised---that AVIVA was not in the top 10,,, they just have the best marketing I guess!
     
  5. Brokers Alliance
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    Brokers Alliance Well-Known Member

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    Accumulation assessment is a good starting indicator for clients seeking supplemental income through indexed universal life. The income generated proposals using arbitrage policy loans appear to be the loan provision selected by the vast majority of distribution scenarios. Based on long term performance and the "standard income boilerplate" used for comparison, the players appear to be North American, Life of the Southwest, Lincoln National, ING & Pacific Life. I'm happy to email attach all proposals for those requesting them at [email protected]

    I also concur on the remarks made on AVIVA. In the income scenarios we ran they didn't place well.

    The standard income boilerplate is female super preferred age 45, $10,000 a year option B lowest non MEC death benefit, switching to option A at age 65, or earlier if the corridor allows, generating arbitrage policy loans from age 65 to age 100. These illustration tactics minimize policy expense loads and maximize tax free income as long as the contract is kept in force for the life of the client with endowment extension provisions.

    Because most of the supplemental income scenarios are non-qualified, female spouses or other female relatives are used to keep the cost of insurance to a minimum.
     
  6. scagnt83
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    scagnt83 Well-Known Member

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    What is that based on? Is that just from a 20 year historical comparison using their software? Just curious.


    While accumulation value is always important, dont forget about how easy/expensive it is to access the money.
    Poor loan provisions could possibly make a policy w/ more $ payout less than one w/ less $...
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    Do you guys offer Penn Mutual?

    They are one of the strongest competitors I have found, especially with their 5.25% fixed rate, 2% guaranteed rate, 13% cap, & 4% loan rate.

    Income scenarios similar to your "boiler plate" that I have ran are just as strong or stronger than LFG & ING


    They actually have a 40 year historical on their software which shows it being very strong.
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    Very good point, also a good reason to just go ahead and allocate a decent percentage to the fixed account, especially since a lot of IULs take the expenses from the fixed account anyways (they will pull from the indexed side if their is nothing in the fixed)
     
    Last edited: May 16, 2011
  7. Brokers Alliance
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    Brokers Alliance Well-Known Member

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    I always use the longest historical numbers, most at 20 some at 30. I also run every carrier at 8% as well to sift out the expense loads.

    Send me the Penn proposal to [email protected]

    Thanks for all your input.
     
  8. juswannahelp
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    where can i learn more about IUL?? im getting started in the business and my manager wants me to push this and term... what else knowledge would i need just in case questions are asked?
     
  9. Brokers Alliance
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    Brokers Alliance Well-Known Member

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    On our retail radio talk show, The Quest for Financial Freedom we addressed Indexed Universal Life. I think it was a great introduction into the product and keep in mind our audience was consumers, so it's basic entry level. I have excellent carrier info and education pieces on IUL as well.

    Just write me at "[email protected]" and I'll send it all to you.
     
  10. sell more life
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    let me know of I can be of assistance. I am aware of a very powerful, yet inexpensive sales system that is focused on selling IUL, from an IMO that specializes in indexed products.. [email protected]
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    [FONT=tahoma,sans-serif]Following is from Sheryl Moore at AnnuitySpecs | The Indexed Experts[/FONT]

    The top ten indexed life carriers for the first quarter:
    1. Pacific Life Companies
    2. Aviva
    3. Minnesota Life
    4. National Life Group (NLV/LSW)
    5. AXA Equitable
    6. Penn Mutual
    7. AEGON Companies
    8. National Western Life
    9. Midland National Life
    10. Allianz Life

    Average Target Premium
    The average target premium paid was $9,030.

    Funny that the top yielding CV IUL (from North American Life) is not in the top 10,,, just goes to show that marketing, marketing, marketing, works! Especially when an IUL like Allianz (with it's horrible crediting method) is in the top 10... of course that's just my humble opine,,,,
     
    Last edited: May 19, 2011

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