New York Eyes IUL Product

[DHK]

New York eyes IUL product | LifeHealthPro

If this is the reason why they are "eyeing" IUL... then they are truly clueless:

The New York Department of Financial Services (NYDFS) effort appears to be an attempt to ensure the industry does not suffer the aftermath of the “vanishing premium” issue, which shook the industry in the 1990s, and dealt with use of illustrations indicating that dividends would ultimately cover the total cost of insurance policies sold during the period.

IUL should be a minimum death benefit & maximum funded product to maximize its cash value accumulation potential. It's not about "vanishing premium" or a "dividend offset" strategy that could have been used with whole life.


I'm guessing that these 4 companies feel threatened by IUL in some way:

The discussion on the call surrounded two separate proposals for an actuarial guideline for IUL illustrations, a proposal put forth by the American Council of Life Insurers (ACLI) and a proposal put forth by four member companies of the ACLI: MetLife, New York Life, Northwestern Mutual and OneAmerica.

 

[pfg1]

I read that earlier today. Will be interesting to see the follow up...

I'm sure that many folks sell IUL with the client in mind... using a more conservative approach, and max funding. But there are certainly many people are selling IUL as the holy grail, but not designing the policy to actually have a chance to come close.

 

[scagnt83]

Basically it is scare mongering by the big mutuals who do not currently have a plan to introduce IUL to their product line up. They are loosing more and more market share each year due to it.

I dont know about the other two. But NYL and MWM (NYL especially) preach heavily against IUL. I remember them saying that it was the worst insurance product an agent could ever sell. So when they finally introduce one, it will be very hard to backtrack from previous comments and training that they have given to the captive sales force. One year you claim its the devil, next year you claim you have this great new product that is no longer the devil just because you now offer it... of course Im sure it will be new and improved when they introduce it... lol.

Once they realize that throwing power and money at it will do not good, they will add it into their product lineups. Give it 5 years.

 

[rousemark]

Basically it is scare mongering by the big mutuals who do not currently have a plan to introduce IUL to their product line up. They are loosing more and more market share each year due to it.

I dont know about the other two. But NYL and MWM (NYL especially) preach heavily against IUL. I remember them saying that it was the worst insurance product an agent could ever sell. So when they finally introduce one, it will be very hard to backtrack from previous comments and training that they have given to the captive sales force. One year you claim its the devil, next year you claim you have this great new product that is no longer the devil just because you now offer it... of course Im sure it will be new and improved when they introduce it... lol.

Once they realize that throwing power and money at it will do not good, they will add it into their product lineups. Give it 5 years.

Have seen it happen time and time again by companies who claim they will never enter a certain market or sell a certain product... Suddenly they have it and are pushing it as the greatest thing since sliced bread.. They never mention their earlier opposition and if you try to remind them of it, they suddenly become deaf and the memory become very clouded.

 

[pfg1]

Basically it is scare mongering by the big mutuals who do not currently have a plan to introduce IUL to their product line up. They are loosing more and more market share each year due to it.

I would agree that this is probably the main push behind it. However, even though IUL has a lot of market share and is very popular, we all know there are plenty of agents that don't design them with the clients best interest at heart.

Unfortunately there are folks that are ramrodding poorly designed policies on everyone they see, touting them as the greatest thing that there ever was. But rather than build it so it has a chance to work well, they design it with their own wallet in mind. No different than in the mortgage business with the shmucks selling option arms by lying to clients and telling them their actual interest rate was 1%. That loan could be a good tool for the right folks, but was certainly not something everyone needed....and if they didn't understand it fully and use it properly, they likely lost their home.

I think IUL can be a great tool if designed and used properly, with at least annual interaction from the agent. Too many folks (especially the mlm ins companies) giving it a very bad name, selling min funded w max commission, forcing every square peg into a round hole.