Whether I Need LT Rider with a IUL

[jdumond]

I cant even get on board with guaranteed multipliers. The way IUL's are headed is making whole life more and more attractive.

Let's not get too crazy here.....

 

[pfg1]

I agree about the multipliers. Just more confusion and moving parts for the client. IUL is complicated enough.

Multipliers sound great on the surface... but puts the risk on the client instead of the carrier.

Carriers feel they have to compete against "product innovations" by other carriers. But they would do well to take a hard look at the quality of business they are writing and quality of the policy design all these new agents are selling...

I agree. I'd much rather have something simple like a 1% floor than a bunch of gimmicky "what if's"

 

[bluesky3000]

Uh thats gonna be a tough decision, would have to based it on your needs

 

[Allen Trent]

SLOWLY warming up to the idea of using IUL for retirement income as opposed to a Deferred Income Annuity, am still educating myself ..

I think the DIA & IUL are somewhat on the opposite end of the spectrum from each other.

The DIA is entirely about guarantees and a monthly check that will come like clockwork. On the positive, there is only 1 main risk the client took & that is irrevocably trading a lump sum of cash. The carrier bears the risk that people don't live longer than they priced for & the risk they can earn the interest returns they priced for.

With a IUL, the consumer is absorbing many of the risks to get a hypothetical non-guaranteed income under the assumption of a half dozen items. Risk of the carrier changing cost of insurance, risk of carrier changing cap & participation rates. There is also no guarantee of the current efficient options market will always be available at a reasonable cost that the carrier can have the money from their general fund to buy cost effectively. But designing with minimum face & max funding can minimize these risks somewhat.

However, to give a consumer an IUL income projection as if it is identical to a DIA might be a bit disingenuous. IUL can be great for supplemental retirement, but not sure going through a costly insurance chassis is ideal for monthly guranteed income the client will for certain need. DIA/SPIA or a EIA/VA with lifetime income rider might be better suited.

Saw an aggressive agent once propose a client take a Ford pension buyout to buy an IUL. Basically trade a old outdated guaranteed high pension check based on old mortality tables & old interest rates for an IUL complicated & costly plan that only showed checks for 15-20yrs in best case. I think the agent was clueless & had no idea the client would also get hammered on income taxes to take a retirennt account buyout in lump sum rather than monthly pension or IRA rollover