Midland big cap reduction

Oct 15, 2017

  1. CFP83
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    CFP83 Guru

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    Just got a call on friday from my regional that midland is reducing caps on all closed iul products/books of business by 2%. The currently sold products will have a 1% reduction. This will take place around 11/15.

    I have heard from a producer on penn mutuals advisor councel that penn is preparing for another 1% reduction as well.
     
    CFP83, Oct 15, 2017
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  2. jboussea
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    jboussea Guru

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    we can expect NA to be reduced accordingly... I don't mind a cap reduction but I don't like it when there's a discrepancy between open book of business and new business.
     
    jboussea, Oct 15, 2017
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  3. AndrewRoche
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    AndrewRoche Expert

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    What is their rationalization for the rate reduction?
     
  4. Carol Perez
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    Carol Perez New Member

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    Yeah, I was also wondering the same!
     
  5. paulallred
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    paulallred Expert

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    Sounds like the options they bought didn't workout as well as expected and/or they wanted to slow their exposure down some by discouraging new business for awhile.

    There are much better IUL carriers out there and I'm a longtime fan of Midland/NA, private message me and I'll explain
     
  6. jboussea
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    jboussea Guru

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    did they actually do this ? haven't received any emails
     
    jboussea, Jan 21, 2018
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  7. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Yes, they lowered them. Most of the major IUL carriers lowered Caps over the past few years on inforce business. With interest rates so low, its hard to blame them. The Caps are highly dependent on the 10 year treasury rate.
     
    scagnt83, Jan 22, 2018
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  8. gkatzfinancial
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    gkatzfinancial New Member

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    Yes -- I just noticed as well new caps on existing business were lowered the 2%.. It's disappointing. I believe similar to @scagnt83 that it has to do with the low interest rate environment we are in.
     
  9. paulallred
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    paulallred Expert

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    That’s why I like the no spread/no cap IUL Contracts
     
  10. pfg1
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    pfg1 Guru

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    Such as...?
     
    pfg1, Jan 24, 2018
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