2012 Par Whole Life Grid
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Projections...who cares? Look Penn, a company I like shows up on top. But as we all know, cash in the policy isn't the whole story. WPM is correct that the Blease report that shows projected income is more useful. There's a "study" you won't see NML agents quoting. But again, we're looking at what companies project at a certain age for a certain db, based on all money going towards base premium. Useless in 99% of the cases I work on.
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lachjs789
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Thanks for the info. Very useful.
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I started a new thread on the 2012 Par Whole Life 10 & 20 Year Histories today.
This one is from 2010, but here you go:
http://media.lifehealthpro.com/life...ctionDocuments/Infograph_RetirementIncome.jpg
Thanks for sharing this. Do you think that the difference in illustrated income may be a function of how the carriers' software is set-up vs actual policy performance? I ask this bc it seems that most of the projections show very little csv/db at older ages, while some (Country, Minn Life, Thrivent and even NML) have much higher policy values at A100.
I'm no expert on this stuff, but couldn't some of these policies project a higher income stream since there is substantial cash remaining?
You would think that, but assuming the providers actually ran the illustration correctly, the apparent conflict between lower income stream with high remaining cash values is a product of how and when the cash value and dividends spike.
For example, NML has a ton of CV after the last year of income, but notice how it drops at age 100. Why? The ongoing loan interest charge has to be paid from cash value. Obviously, the NML contract isn't as cost efficient taking money out due to perhaps direct recognition as well as a higher loan interest rate. Bottom line... if the income stream from the NML was higher, it would not make it to age 100, which was what the comparison called for.
While it's fair to note that all insurance companies tend to understate performance in their illustration software for safety purposes, Larry nailed it, it's not a software glitch, this is how these policies actually work. I debated making the following point in the post:
When we compare the distributions from say ONL and Penn to a company like NML we'd note that both have lower cash values and db come later years. This is driven by the mechanics of the policies a la loans and dividends. The difference in distributions per year between NML compared to Penn and ONL is close to $10k/year. If we discount this amount by 3% the lump sum equivalent would be an extra $270,000. So, where NML requires that extra money to keep the policy in force, other companies do not, and the economic benefit from the policy is quite a bit more.
When we compare the distributions from say ONL and Penn to a company like NML we'd note that both have lower cash values and db come later years. This is driven by the mechanics of the policies a la loans and dividends. The difference in distributions per year between NML compared to Penn and ONL is close to $10k/year. If we discount this amount by 3% the lump sum equivalent would be an extra $270,000. So, where NML requires that extra money to keep the policy in force, other companies do not, and the economic benefit from the policy is quite a bit more.
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