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Figured I'd bump this rather than do a new thread.
Concerning loans: I am doing a comparison between LSW & Midland IULs. I am using a 45 YO Male, non-tob, $1m level DB, at target for 22 years, then taking loans. What I've found is that Midland has a higher target (therefore, in this case, higher annual premium), a higher cap rate (14 vs. 12.5), and because of the new rules, Midland's illustrates at 7.77 vs 7.07 for LSW. For the sake of this comparison, I lowered Midland's to 7.25.
Not surprisingly, Midland comes in at a much higher cash value in 22 years, $727,000 vs. $612,000.
What does surprise me is that the loan computation shows Midland at $55,000 (rounded) to age 100, while LSW is $66,000 to age 120. That's a huge difference.
I wonder if much of the difference would have to do with how I illustrated them. I'm not sure how to dial them in so that I'm comparing apples to apples.
Any help is appreciated.
I went back and read the policies and how the loans are credited, and now I have my answer.
Right, almost. I should have phrased the question more directly, as in, why would an annual loan amount with $700,000 CV show a much lower annual amount than another with $600,000 of CV? Actually, the way I got to those figures has no bearing on the question.
I would have omitted it altogether but I thought maybe someone would use the figures to do their own illustration to see how I got what I got, and then maybe they'd be able to tell me why I got there, and what I could have done different. It was a little hard to believe that there is that much discrepancy between the two companies.
I went back and read the policies and how the loans are credited, and now I have my answer.
I'm not asking how to design a policy. I'm asking about the loan component of the illustrations.