My First IUL

[pfg1]

Designed the right way...he'd probably make 500 bucks.

Right, and designed the wrong way... $2000-$2400.

I think IUL is fine for the right folks in the right situation, but it needs to be designed and explained properly. I still like whole life better personally, because of the guarantees. They both have their place.

 

[ATM]

Right, and designed the wrong way... $2000-$2400.

I think IUL is fine for the right folks in the right situation, but it needs to be designed and explained properly. I still like whole life better personally, because of the guarantees. They both have their place.

I don't believe there is only one "right way".

It depends on the facts and circumstances of the clients needs and situation. Most times it is the "right way" that we use but in others it is something else.

We might us a Min NonMEC GLP level face for a younger person who needs the coverage and has a longer time frame to accumulate. We may use an option B changing to A min nonMEC CVAT for an older person looking for max accumulation and not a great need for much more insurance.

In situation 1 the amount of money the client will accumulate based on whatever projection you want to use is simply not that much less than using the "right way". The projected income is not that much less either.

When we explain the design choices and the trade off in future cash values and projected income many times they will choose the higher initial face amount and slightly reduced cash values because their need for the coverage supersedes their need to $100 more cash value this year or $1000 in 10yrs, etc.

These are insurance products and the first hurdle the client needs to get over is a need for life insurance. These aren't investment products and I think if you sell them as such you are likely going to find yourself in trouble eventually. It is life insurance that has other benefits, not an investment product that happens to have life insurance. (and I know I'm in the minority in the IUL space on that one!)

 

[pfg1]

Basically what I was referring to was more along the lines of selling for max target vs max accumulation. Way too many folks setting up clients for potential failure by min funding the policies, vs overfunding. Obviously there are lots of design scenario's given the clients needs, etc... but imo, they need to be overfunded, preferrably max funded. My .02

 

[WinoBlues]

The wrong way - There is a group locally that is recruiting heavily in the South East Asian community. They are recruiting much like Primerica, selling the dream. Then they sell the IUL as wealth accumulation. Many of the sales are for final expenses of seniors and minimum funded. Clients are being told the death benefits are guaranteed.

 

[scagnt83]

We might us a Min NonMEC GLP level face for a younger person who needs the coverage and has a longer time frame to accumulate.

We may use an option B changing to A min nonMEC CVAT for an older person looking for max accumulation and not a great need for much more insurance.

In situation 1 the amount of money the client will accumulate based on whatever projection you want to use is simply not that much less than using the "right way". The projected income is not that much less either.

The problem with your first situation is that you are not accounting for inflation. If they need more coverage then sell term on top of the IUL or throw on a term rider. But for a 30 or 40 year old, in 30 or 40 years down the road that policy will basically be an FE policy using the Level DB.

If you sell them a minDB with opt2 switching to opt1, then they will have a nice size DB in old age PLUS they have maximized RoR on CV.



The problem with your 2nd scenario is that CVAT is the wrong testing option to use in that situation. CVAT carries a higher COI vs. GPT. Combining that with opt2 creates the highest COI possible on a UL.... not a good thing for an older client....

CVAT is best used with a Level DB.



The first scenario is not wrong, but it is not the best option by any means. The second is flat out wrong.