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Are you stalking me? Did you know there's an app for this forum? That's why you see me logged in and how easy it can be to post here.
So... IUL is always a ripoff? Okay, I see the light.
Look, as you said, it depends on the goal. There are many tools to help people accomplish their goals. WL is not the "be all and end all" and neither is IUL.
Anyone who is selling IUL should NOT be touting 7% annual returns every single year. That is a gross misrepresentation of what to expect of the product. IUL credits interest based on the underlying index volatility. S&P goes up, so does the amount of interest credited. S&P is flat or is negative... then 0% interest is credited.
When you compare a WL guaranteed columns to IUL guaranteed columns, you are making the assumption that the underlying index segment will remain flat, or be negative for the LIFE of the product. Highly unlikely that will happen.
However, what is illustrated and what is explained... are often two different things. That's why I created my own supplemental disclosures to accompany the policies that I sell.
I do share your concern about unrealistic expectations of IUL illustrations. I prefer illustrations where you can vary the interest being credited year to year - such as a maximum 3 years, then 0% for 2 years, and alternate that for the life of the policy.
Marvin Feldman (of your company, last I remember) said to never forget the rule 1 to 100: In 1 year, 100% of your illustrations will be wrong.
BTW, I don't have any idea what you're talking about that's going to be "illegal" on 3/1/16.
My IUL contract pays me a 90% flat on target premium. There are occasional contests and promotions, but I largely ignore them.
Let's talk about WL vs UL disclosure requirements. WL incorporates your COI within the premium structure. Because WL is a FIXED product - fixed premiums, fixed death benefit, fixed interest... it does not require a separate disclosure for costs of insurance. Why? For the same reason that a bank doesn't have to disclose costs associated with FDIC insured deposit products. It's all incorporated into the rates offered.
However, IUL is unbundled and FLEXIBLE... so it must disclose the costs to be managed. Flexible premiums, flexible interest that can be credited, flexible death benefit. Just like a mutual fund. With variable rates of return, along with the risk of loss, one must know what the costs are that affect returns. So a prospectus is given. It's the same principle behind cost of insurance disclosures.
What you're REALLY saying... is that IUL has become a favorite of non-educated agents who don't know how to properly structure a contract for the benefit of the client... and THAT is what we ALL have a problem with.
Here's the difference: You're blaming the issuing insurance company and the product design.
I'm blaming the amateur agent. Two very different things.
Misrepresentation and ignorance: A dangerous blend for ethics | LifeHealthPro
I would put an IUL by me, scagnt83, or BNTRS (and a few others on this board) against the illustrations you've seen and you'll see that WE know what we're doing. Perhaps the vast majority of agents don't... and that's why NYL and other mutual insurance companies love sticking with WL - it's an easier sale with far fewer components to review with clients on a regular basis. Plus, if and when agents leave the company or industry, it's far easier to maintain these contracts with minimal intervention by an agent. You can't do that with UL, IUL, or especially VUL. ULs generally require ongoing, periodic reviews.
If it wasn't for this board, and specifically scagnt83, I wouldn't have the IUL knowledge that I do have.
Every product has a viable market. No product is inherently good or bad. Agents can twist a product and misrepresent a strategy, but that's due to the lack of ethics and/or training on the part of the agent... not the fault of the issuing company.
So... IUL is always a ripoff? Okay, I see the light.
Look, as you said, it depends on the goal. There are many tools to help people accomplish their goals. WL is not the "be all and end all" and neither is IUL.
Anyone who is selling IUL should NOT be touting 7% annual returns every single year. That is a gross misrepresentation of what to expect of the product. IUL credits interest based on the underlying index volatility. S&P goes up, so does the amount of interest credited. S&P is flat or is negative... then 0% interest is credited.
When you compare a WL guaranteed columns to IUL guaranteed columns, you are making the assumption that the underlying index segment will remain flat, or be negative for the LIFE of the product. Highly unlikely that will happen.
However, what is illustrated and what is explained... are often two different things. That's why I created my own supplemental disclosures to accompany the policies that I sell.
I do share your concern about unrealistic expectations of IUL illustrations. I prefer illustrations where you can vary the interest being credited year to year - such as a maximum 3 years, then 0% for 2 years, and alternate that for the life of the policy.
Marvin Feldman (of your company, last I remember) said to never forget the rule 1 to 100: In 1 year, 100% of your illustrations will be wrong.
BTW, I don't have any idea what you're talking about that's going to be "illegal" on 3/1/16.
My IUL contract pays me a 90% flat on target premium. There are occasional contests and promotions, but I largely ignore them.
Let's talk about WL vs UL disclosure requirements. WL incorporates your COI within the premium structure. Because WL is a FIXED product - fixed premiums, fixed death benefit, fixed interest... it does not require a separate disclosure for costs of insurance. Why? For the same reason that a bank doesn't have to disclose costs associated with FDIC insured deposit products. It's all incorporated into the rates offered.
However, IUL is unbundled and FLEXIBLE... so it must disclose the costs to be managed. Flexible premiums, flexible interest that can be credited, flexible death benefit. Just like a mutual fund. With variable rates of return, along with the risk of loss, one must know what the costs are that affect returns. So a prospectus is given. It's the same principle behind cost of insurance disclosures.
What you're REALLY saying... is that IUL has become a favorite of non-educated agents who don't know how to properly structure a contract for the benefit of the client... and THAT is what we ALL have a problem with.
Here's the difference: You're blaming the issuing insurance company and the product design.
I'm blaming the amateur agent. Two very different things.
Misrepresentation and ignorance: A dangerous blend for ethics | LifeHealthPro
I would put an IUL by me, scagnt83, or BNTRS (and a few others on this board) against the illustrations you've seen and you'll see that WE know what we're doing. Perhaps the vast majority of agents don't... and that's why NYL and other mutual insurance companies love sticking with WL - it's an easier sale with far fewer components to review with clients on a regular basis. Plus, if and when agents leave the company or industry, it's far easier to maintain these contracts with minimal intervention by an agent. You can't do that with UL, IUL, or especially VUL. ULs generally require ongoing, periodic reviews.
If it wasn't for this board, and specifically scagnt83, I wouldn't have the IUL knowledge that I do have.
Every product has a viable market. No product is inherently good or bad. Agents can twist a product and misrepresent a strategy, but that's due to the lack of ethics and/or training on the part of the agent... not the fault of the issuing company.
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