Best IUL with variable loan provision

[Sheryl J Moore]

In your opinion, why is the Pac Life PDX2 the top selling? Honestly asking

Is it because it best performing for client currently? Is it because it is the most aggressive in its design with multipliers to make a 6.5% average rate look more like an 8, 10 or 12%? is it because it is the more aggressive marketed by wholesalers? Or is it because it really has the lowest current projected internal costs with best caps/par rates.

thanks for answering if you do have thoughts on it

Follow the money. The targets are higher.

 

[Allen Trent]

Follow the money. The targets are higher.

So, a client (I mean an aggressive agent) illustrating the max enhanced performance rider to get the max illustrated cash value illustration would be adding the client to get charged 7.5% rider charge over & above all other charges. Does this mean the client would lose 7.5% in 0% or negative market year (over and above other policy charges)?

Should agents quit saying "upside potential with no market losses" that I hear so many say if this is how multiplier charges work?

AG49v2 is probably coming soon if this is now the norm on IUL illustrations, don't you think?

 

[Sheryl J Moore]

So, a client (I mean an aggressive agent) illustrating the max enhanced performance rider to get the max illustrated cash value illustration would be adding the client to get charged 7.5% rider charge over & above all other charges. Does this mean the client would lose 7.5% in 0% or negative market year (over and above other policy charges)?

Should agents quit saying "upside potential with no market losses" that I hear so many say if this is how multiplier charges work?

AG49v2 is probably coming soon if this is now the norm on IUL illustrations, don't you think?

If they REALLY wanted max performance on that product, they would blend it with term rider.

Regardless of bonuses/multipliers, the policyholder is always going to have a negative adjustment to their Account Value in the event of a 0% or negative market year because of policy charges. The asset-based charges for these newer features would also result in a negative adjustment.

I don't like the "upside potential with no market losses" mantra anyhow; it is deceiving. Do you think the policyholder understands that there are losses that AREN'T a result of the market? These are complex products; there is no way they can understand how these work.

Yes, I've been working on AG49 2.0 for more than a year.

 

[Allen Trent]

If they REALLY wanted max performance on that product, they would blend it with term rider.

Regardless of bonuses/multipliers, the policyholder is always going to have a negative adjustment to their Account Value in the event of a 0% or negative market year because of policy charges. The asset-based charges for these newer features would also result in a negative adjustment.

I don't like the "upside potential with no market losses" mantra anyhow; it is deceiving. Do you think the policyholder understands that there are losses that AREN'T a result of the market? These are complex products; there is no way they can understand how these work.

Yes, I've been working on AG49 2.0 for more than a year.

great info and analysis. I definitely get the normal policy charges (just like a fixed UL) can cause a CV to be less at end of policy year than prior year. But, the IUL & EIA marketplace has been built up as "safe money, no negatives from the market". While a multiplier with added charges for the multiplier type riders really isn't a loss from the market index losses, these multiplier seem to fall in this realm for me compared to other riders that add coverage or a component of insurance. These seem to me to be more about "I will take a 7.5% negative in flat or down years if you will give me 1 or 2x in the upside years. I guess that is why my personal opinion is that "upside market linked returns with no participation in losses" statements seem to be more violated with these multipliers compared to just run of the mill policy fee, COI, rider fees, etc

thanks again

 

[Sheryl J Moore]

great info and analysis. I definitely get the normal policy charges (just like a fixed UL) can cause a CV to be less at end of policy year than prior year. But, the IUL & EIA marketplace has been built up as "safe money, no negatives from the market". While a multiplier with added charges for the multiplier type riders really isn't a loss from the market index losses, these multiplier seem to fall in this realm for me compared to other riders that add coverage or a component of insurance. These seem to me to be more about "I will take a 7.5% negative in flat or down years if you will give me 1 or 2x in the upside years. I guess that is why my personal opinion is that "upside market linked returns with no participation in losses" statements seem to be more violated with these multipliers compared to just run of the mill policy fee, COI, rider fees, etc

thanks again

Yeah, I've been the top expert on indexed products for nearly 20 years, and I always tell people that "Zero is Your Hero" is disingenuous on life products. (And please don't call them "EIAs" anymore! )

The way I look at the bonuses and multipliers is that the client is absolutely always going to pay that asset based charge. Are they always going to benefit from the indexed potential they offer? Maybe, maybe not. Just another tool though; not good, nor bad- as long as you and the prospect understand how they work, and how they affect the illustration (and the rate at which the illustration's values are growing).

Glad to help!

 

[Allen Trent]

And please don't call them "EIAs" anymore! )

I honestly know this, but for whatever reason I keep using EIA whether or not I use the acronym or type the entire words

 

[Sheryl J Moore]

I honestly know this, but for whatever reason I keep using EIA whether or not I use the acronym or type the entire words

If you want me to leave you the heck alone, let's refrain from doing that in the future. I seriously started a petition against using that terminology in like 2006. ;-)

 

[Tahoe Ray]

You're killing me, smalls.

We would love to see you in this forum a little more, Sheryl.

Your expertise will certainly help dispel a lot of the b.s. that floats around here.

Hope to see you in May at SubCenters.

 

[pfg1]

Follow the money. The targets are higher.

I understand why agents chase target. Sometimes though, as we've all seen... its not in the clients best interest, but rather the agents best interest. (which is where alot of the negative stigma on PLI points to)
And I'm not talking about any particular company/product. Just in general.

You're killing me, smalls.

Great movie, and a classic line that gets used a ton around my house!

 

[Sheryl J Moore]

We would love to see you in this forum a little more, Sheryl.

Your expertise will certainly help dispel a lot of the b.s. that floats around here.

Hope to see you in May at SubCenters.

Not sure why the site is saying that I am a "New Member?" I've been a member for more than a decade. I just haven't been participating much because I forget about it! The emails I am receiving daily with top threads are really helping.

Thank you for your kind words and support, Ray. Can't wait to see you in May!