Do IULs Ever Perform Close To Illustrations?

[axeman462]

the best I can tell, my IUL is performing right about the mid-point illustrated rate. It's about 6 1/2 years old
I use the S&P 500 annual Point-to-Point 100% allocation, the IUL is with NA

If y'all have any suggestions to make it perform better, I am all ears

 

[Allen Trent]

the best I can tell, my IUL is performing right about the mid-point illustrated rate. It's about 6 1/2 years old
I use the S&P 500 annual Point-to-Point 100% allocation, the IUL is with NA

If y'all have any suggestions to make it perform better, I am all ears

In the last 6-7 years, the actual S&P 500 has went from 2500 to 5000, which is an average of about 10-11% annually. Midpoint on yours is likely 3 to 3.5% rate minus costs & fees.

Without knowing caps & participation rates you have had, I would suspect you are not max funding the policy, meaning you may have too much death benefit for your funding level if you are wanting the cash to grow at maximum it can.

 

[axeman462]

In the last 6-7 years, the actual S&P 500 has went from 2500 to 5000, which is an average of about 10-11% annually. Midpoint on yours is likely 3 to 3.5% rate minus costs & fees.

Without knowing caps & participation rates you have had, I would suspect you are not max funding the policy, meaning you may have too much death benefit for your funding level if you are wanting the cash to grow at maximum it can.

I currently have the death benefit as a rising death benefit. Would making it a level DB make the CV grow faster?

 

[PrivClientSG]

I currently have the death benefit as a rising death benefit. Would making it a level DB make the CV grow faster?

Remember, the hidden enemy on IUL -- as with any UL-chassis product -- is the "unknown" increase in mortality charges. Every anniversary, you'll get the notice of what it is for the coming year. However, it will be somewhere between the "current" and the guaranteed maximum. Look at an inforce illustration now and the mortality charges for anything other than the current year are nothing more than a projection of what they will be next year, the year after, and so on. However, next year, it can be higher than that and it can be as high as the guaranteed maximum.

People will scream "that's never happened before" -- and that is not true. It may not be happening to people in their 40's or 50's, and maybe not even with people in their 60's. But there are plenty of UL contracts out there that are now getting much, much closer to the guaranteed maximum -- than anything resembling the "current" mortality charges that were illustrated originally, and in the past. You as the insured are bearing the mortality risk that is inherent in this type of product.