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Reply to Tax Free Retirement WL W/riders Vs IUL?     
Old 02-13-2015, 08:09 AM   #11
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
As mentioned, both have their place. For me, I just favor WL because I know there will be no surprises. It will do what you tell your clients it will...and with no risk. Its been around for ever and always has. That is not to imply that IUL won't....there is just no guarantee that it will perform as most are illustrated. IUL is a relatively new product in the big scheme of things, to it doesn't have the long standing track record to look at (yet). Hopefully it will down the road.

I run my IUL illustrations at 5.95%. (yeah, that's lower than most) That way I'm not showing pie in the sky, but something that is actually (and according to studies) much more likely to happen. If it does better, great. If it does worse, it probably won't be alot worse.

Most carriers and many practitioners will automatically default to the max allowed in the illustration system. This varies but often its over 8%. So you end up showing an illustration where the numbers are huge. Could it do that, certainly possible. Will it? We don't know. I personally lean on the more conservative side. I feel like this is why IUL is so popular. You can illustrate this amazing super sexy result down the road that is very attractive to clients...which often leads to bigger cases, which equals higher commissions. When you compare an IUL at 8+% to a WL, of course the WL doesn't look as good. When you compare at a lower rate, they aren't so different.

When I offer (or sell) and IUL, I let them know that there is no guarantee it will do what we are outlining (but a good chance it will), and if they are comfortable with that... great. I also let them know that to have the best chance of having success long term, all we can control is the design of the policy and making sure they max fund it. If its done that way, there is a good chance it will be a nice policy down the road.

You mentioned commissions.... I agree, do the right thing for the client and commissions will take care of themselves. If you sell at target or below... imo, you are setting your clients up for failure down the road. If they just need permanent covg for the least cost, go GUL.
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Old 02-13-2015, 09:18 AM   #12
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by pfg1 View Post
When you compare at a lower rate, they aren't so different.
For Accumulation during Premium paying year that is true if the WL has the same or similar credited rate as the IUL.

But once premiums stop that no longer is the case.

Also, the IUL allows for much higher distributions based on the same amount of CV. This is because you can use GPT testing with a Level DB.

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Originally Posted by DHK View Post
I was finally able to get something close by choosing "Minimum" death benefit and option B for a stated premium. I had about 50% available cash surrender values in year 2.

Thanks for your help.
No problem. Email or call me if you ever want more detailed help with running them.

But you need to use a better product imo.

Download some NA software or Midland software. It is by far the top IUL on the market.

The ECV product is stellar. I love the waiver of surrender rider.
Did you see that illustration I posted with it? How can you beat 100% access to 100% of premiums in year 1???

Your Anico illustration (which looks correct by the way assuming you used GPT), does not even come close to it.

Plus NA/Midland has a much better comdex (93) than Anico...


I know of a guy using the Midland ECV with the waiver of surrender charge rider, to dump in lump sums or do 2 pays. He MECs it and treats it like a surrender charge free annuity with a tax free DB.
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Old 02-13-2015, 09:38 AM   #13
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by scagnt83 View Post


The ECV product is stellar. I love the waiver of surrender rider.
Did you see that illustration I posted with it? How can you beat 100% access to 100% of premiums in year 1???


I know of a guy using the Midland ECV with the waiver of surrender charge rider, to dump in lump sums or do 2 pays. He MECs it and treats it like a surrender charge free annuity with a tax free DB.
What product is this SC? I don't know it... and where can I see the illustration you are referring to?


Originally Posted by scagnt83 View Post
Plus NA/Midland has a much better comdex (93) than Anico...
N/A & Midland are 90 now, I just looked at the comdex report yesterday. Anico is 78. Honestly, I'm not sure how much this really matters. Heck, one of the biggest a rated annuity carriers is alot lower than those.
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Old 02-13-2015, 10:27 AM   #14
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by pfg1 View Post
What product is this SC? I don't know it... and where can I see the illustration you are referring to?




N/A & Midland are 90 now, I just looked at the comdex report yesterday. Anico is 78. Honestly, I'm not sure how much this really matters. Heck, one of the biggest a rated annuity carriers is alot lower than those.

North American/Midland National "Rapid Builder".

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Here is a screen shot of the illustration using a $100k dump in.

______________________________________


________________________________________



________________________________________

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Old 02-13-2015, 10:47 AM   #15
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
My only concern for Midland and NA IUL policies is for their lack of Disability waiver of premium (policy charges) &/or stipulated premium in California. I hope they get something done about this, but it's been a few months.

As far as I've seen, only ANICO offers a full disability waiver of stipulated premium in California.

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Oh, and the waiver of surrender rider does LOOK good... but then the risk of a chargeback is on the producer to keep the policy in the books for at least 3 years. Not sure if I want to have such a risk for that long.
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Old 02-13-2015, 10:56 AM   #16
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by DHK View Post
My only concern for Midland and NA IUL policies is for their lack of Disability waiver of premium (policy charges) &/or stipulated premium in California. I hope they get something done about this, but it's been a few months.

As far as I've seen, only ANICO offers a full disability waiver of stipulated premium in California.

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Oh, and the waiver of surrender rider does LOOK good... but then the risk of a chargeback is on the producer to keep the policy in the books for at least 3 years. Not sure if I want to have such a risk for that long.

I feel that you are short sighted on the disability issue. If it is a persons only retirement savings then sure. But for the average IUL prospect the disability rider is often fairly meaningless. Like I said before, most companies limit the "specified premium waiver" to a multiple of the Target.

Will Anico let you do $20k/y on the Specified Premium Waiver???


And NA does not even offer the specified waiver for that very reason. It is largely useless in most real cases. NA does offer waiver of expenses which I do add sometimes.


And if you are worried about an IUL not staying on the books for over 3 years I find that very strange. An overfunded product such as that should have a long term outlook. The waiver is great, but if they do not have a 5y min time frame with the lump sum concept then they should not be a prospect.


Go on Anico's system and try to do a Waiver of Specified Premium for $20k or $50k and see if it lets you. I dont know the answer to this... but my money is that it will limit you to around target or slightly over at most.
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Old 02-13-2015, 11:11 AM   #17
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Thanks SC.... you are always a good resource on IUL info. You've helped me alot with my learning curve.

DHK, yeah.... its good for the right clients. Definitely a little risk there with the chargeback deal.
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Old 02-13-2015, 12:00 PM   #18
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
I put in a $50,000 annual premium for a $2 million dollar increasing death benefit, and this is how the Disability Waiver of Stipulated Premium shows up in the illustration:

The Waiver of Stipulated Premium provides that stipulated monthly premium of $4,166.66 will be waived if you become totally disabled. This amount may not keep the policy active to the maturity date. (Disability must be continuous for at least six months and begin before age 60.) (Form PWSTP)
Of course, $4,166.66 x 12 = $49,999.92

And yeah, I agree that it's important if this is their ONLY retirement savings.
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Old 02-14-2015, 01:30 PM   #19
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by DHK View Post
I put in a $50,000 annual premium for a $2 million dollar increasing death benefit, and this is how the Disability Waiver of Stipulated Premium shows up in the illustration:



Of course, $4,166.66 x 12 = $49,999.92

And yeah, I agree that it's important if this is their ONLY retirement savings.
Thats interesting. Certainly a unique feature. I found a rider spec sheet for anico and it did say it would cover up to the guideline premium. So its correct.

I still am not a fan of the product though. Most of my IUL sales are not for someones primary retirement savings. Its usually supplemental, and often there are assets enough to keep it going even if they were disabled.

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Originally Posted by pfg1 View Post
N/A & Midland are 90 now, I just looked at the comdex report yesterday. Anico is 78. Honestly, I'm not sure how much this really matters. Heck, one of the biggest a rated annuity carriers is alot lower than those.

Good to know.

I think it matters a hell of a lot more for Life than it does Annuities.

I know your talking about American Equity most likely. And I have sold AE annuities before.

But to me there are key differences.

Life insurance is a life long contract. An annuity is usually just a 10 year contract.
With life you are betting on the next 30-60 years.

Now I know that a whole lot of those AE contracts were sold with a lifetime income rider. But that is a guarantee.... a guarantee that is covered by SGA funds if things go to hell...

If the IUL company goes under then those caps/spreads/PRs/etc. are all dropping to their minimums... that contract is no longer profitable.

With the IA Income Rider they are contractually obligated to pay the Rider values.

That is why I will sell a lower rated IA but not a lower rated IUL. I wish Voya had better ratings because I love their IUL product. But there is no reason to use it with better rated products out there.
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Old 02-18-2015, 11:44 AM   #20
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Tax Free Retirement WL W/riders Vs IUL? Re: Tax Free Retirement WL W/riders Vs IUL?
Originally Posted by scagnt83 View Post


Good to know.

I think it matters a hell of a lot more for Life than it does Annuities.

I know your talking about American Equity most likely. And I have sold AE annuities before.

But to me there are key differences.

Life insurance is a life long contract. An annuity is usually just a 10 year contract.
With life you are betting on the next 30-60 years.

Now I know that a whole lot of those AE contracts were sold with a lifetime income rider. But that is a guarantee.... a guarantee that is covered by SGA funds if things go to hell...

If the IUL company goes under then those caps/spreads/PRs/etc. are all dropping to their minimums... that contract is no longer profitable.

With the IA Income Rider they are contractually obligated to pay the Rider values.

That is why I will sell a lower rated IA but not a lower rated IUL. I wish Voya had better ratings because I love their IUL product. But there is no reason to use it with better rated products out there.
I agree, its more important on life than annuity. From what I've heard AmEq will never be ranked real high because they don't sell life insurance as well. Who knows.

Back to the Waiver of Premium for Disability... on NA, is that available on the builder product? I'm relatively new to their software, fumbling my way through.
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