We all know IULs are a ripoff

[phoenixlord]

Where do they get the money to buy the options? From the returns on their general funds. If they have a 100k CV & have to guarantee 100k is still in it 12 months from now & they are making 5% on their bond/treasury/mortgage portfolio, they need to leave 95k in to get back to 100k I'm 12 months. If their returns on their portfolio drop to 4% due to treasuries & other interest rates dropping, they need to leave 96k to get back to 100k. That means they only have 4k to buy options compared to the year before. Even if options are selling for the same price as the prior year, they can't buy as high of a par or cap rate due to the return on their general account funds.

I don't buy this argument. During the last 5 years, economy was booming and Fed didn't lower interest rates. Also, they don't buy 1 year bonds but multi year bonds and also multi year ladder options(LEAPS). Look, we can speculate about their financial engineering all we want. The point is why tie your client's hands in this for a projected paltry 6%? There are better products with more guarantees. After all, we are selling insurance, not investments and insurance means to be able to count on it when needed the most. Am I wrong?

 

[Allen Trent]

Now this hurts me even more. If they delay gratification and sacrifice buying cars, houses and want to invest, then I would never put them in an IUL. Because here they get nothing, atleast let them enjoy their cars, houses. IULs are for people who have nice cars, houses and have money left over after funding 401k, ira, WL first.

Even though I don't own or sell IUL or even like it that much, you realize that they have guaranteed components too

I don't buy this argument. During the last 5 years, economy was booming and Fed didn't lower interest rates. Also, they don't buy 1 year bonds but multi year bonds and also multi year ladder options(LEAPS). Look, we can speculate about their financial engineering all we want. The point is why tie your client's hands in this for a projected paltry 6%? There are better products with more guarantees. After all, we are selling insurance, not investments and insurance means to be able to count on it when needed the most. Am I wrong?

You are wrong about where insurance carriers are permitted to invest their funds. They cannot hold much in terms of equity positions & hold much more in debt instruments. While the economy & equities may have been booming, the vast majority of their expiring bond & mortgage holdings were expiring with much higher rates than they could invest in new replacement assets.

You are also incorrect on VIX specifics.

Again I don't disagree with some of your premises, but I don't understand why you care so much to go out of your way to argue about it, especially with someone that has told you I don't own or sell IUL myself

 

[phoenixlord]

Now you're just blatantly making things up.

2017 was the only year where the VIX was in single digits.

The point I was making was VIX was not 50 like in March 2020. I am only one person and I can't keep up with all of you hammering me. You can sell whatever you want. As for me, I made up my mind I won't sell it to average Joes but to only people who are accredited investors and after explaining them all this and if they still crave for it. Just wanted to know how many feel like me. I didn't expect many but not even one? Cheerio! Ta Ta!

 

[phoenixlord]

Again I don't disagree with some of your premises, but I don't understand why you care so much to go out of your way to argue about it, especially with someone that has told you I don't own or sell IUL myself

Yes but you are popular here and you and others like you sound as if you are positive about IULs. That will lead many agents in that path.

 

[Allen Trent]

Yes but you are popular here and you and others like you sound as if you are positive about IULs. That will lead many agents in that path.

Is that what this is about? You think we are the cool kid club & won't invite you to the party? I am not at all positive about IUL if you see the history & I am definitely vocal about not believing any permanent life should be sold as a replacement of qualified plans & NQ equities, they should be supplemental to those plans & after massive amount of term in place. But while I am not positive toward IUL, I am definitely not hell bent like you are that an IUL is worse than wasteful consumption spending

 

[Allen Trent]

The point I was making was VIX was not 50 like in March 2020. I am only one person and I can't keep up with all of you hammering me. You can sell whatever you want. As for me, I made up my mind I won't sell it to average Joes but to only people who are accredited investors and after explaining them all this and if they still crave for it. Just wanted to know how many feel like me. I didn't expect many but not even one? Cheerio! Ta Ta!

You have a reading comprehension problem if you can't see from the 9 pages of this thread that many on the thread may even write less IUL than you.

 

[phoenixlord]

Is that what this is about? You think we are the cool kid club & won't invite you to the party? I am not at all positive about IUL if you see the history & I am definitely vocal about not believing any permanent life should be sold as a replacement of qualified plans & NQ equities, they should be supplemental to those plans & after massive amount of term in place. But while I am not positive toward IUL, I am definitely not hell bent like you are that an IUL is worse than wasteful consumption spending

High school's been over since almost 25 years Being nerdy doesn't bother me now.
You realize that WL, even without dividends doesn't lapse as long as it's designed with a small base premium(and you pay atleast that) and max PUA? You can't say the same with IUL and to make matters worse, telling the clients that premiums are flexible results in many missed premiums and makes matters even worse. It's like a perfect storm, everything is wrong about IULs.

 

[Allen Trent]

High school's been over since almost 25 years Being nerdy doesn't bother me now.
You realize that WL, even without dividends doesn't lapse as long as it's designed with a small base premium(and you pay atleast that) and max PUA? You can't say the same with IUL and to make matters worse, telling the clients that premiums are flexible results in many missed premiums and makes matters even worse. It's like a perfect storm, everything is wrong about IULs.

Yup, I realize that about WL as I own 10 WL contracts between myself, my wife & 4 kids and I own 0 IUL policies nor have I sold an IUL. But it appears you don't realize that an IUL can also be guaranteed to not lapse for less required premium. I personally like that WL endows with CV equaling the face amount & a no lapse IUL won't be guaranteed to do that. But, some clients may like paying less to get the same face amount guaranteed & not having to pay more like I do so that the CV = face at age 100

 

[Tahoe Ray]

As for me, I made up my mind I won't sell it to average Joes but to only people who are accredited investors and after explaining them all this and if they still crave for it. Just wanted to know how many feel like me. I didn't expect many but not even one?

I can't speak for everyone on this thread but for the majority of the people responding to you, that is EXACTLY the type of client that we offer IUL to.

Who wants to deal with all of the monitoring, reviews, and policy management that comes with IUL for an "average joe" client.

They should just be putting their money into a Roth.

 

[phoenixlord]

You have a reading comprehension problem if you can't see from the 9 pages of this thread that many on the thread may even write less IUL than you.

That maybe so but they are not openly saying that IULs are the worst products since 80s ULs and VULs. If enough agents say and push back, maybe insurance companies will make changes in their contract wording.