My First IUL

[lgreen]

Sold my first IUL today at $200 a month. Done got the fever now. Have been focusing mainly on FE, always thought there was more money in that for some reason. Selling IUL's it is very easy to see the potential to make a lot of money if you can keep good prospects.

 

[Tahoe Ray]

Sold my first IUL today at $200 a month. Done got the fever now. Have been focusing mainly on FE, always thought there was more money in that for some reason. Selling IUL's it is very easy to see the potential to make a lot of money if you can keep good prospects.

What was the target premium?

 

[lgreen]

what was the target premium?

$200.................................

 

[Tahoe Ray]

$200.................................

I only ask because most of the targets on the cases that we run are closer to 25% of the paid premium.

Was the IUL for cash accum and DB? If you need more DB, you might want to look at a combination of term and max funded IUL.

Also, were you using the carriers default assumptions? These products can illustrate very well but can also fall apart on the guaranteed/max charge side. Solving for DB (not saying that you did this) using the target and carrier assumptions can be tricky.

I only mention these issues because you said that you specialize in FE. If you're already aware of all of these points, please disregard this post.

 

[lgreen]

I only ask because most of the targets on the cases that we run are closer to 25% of the paid premium.

Was the IUL for cash accum and DB? If you need more DB, you might want to look at a combination of term and max funded IUL.

Also, were you using the carriers default assumptions? These products can illustrate very well but can also fall apart on the guaranteed/max charge side. Solving for DB (not saying that you did this) using the target and carrier assumptions can be tricky.

I only mention these issues because you said that you specialize in FE. If you're already aware of all of these points, please disregard this post.

No I appreciate all info. IUL was for the payout starting at age 65. Wrote term to make up difference in needed life protection. Illustrated rate was 8.34% Genworth IUL. The IUL was based more on what she could budget every month.

 

[Tahoe Ray]

No I appreciate all info. IUL was for the payout starting at age 65. Wrote term to make up difference in needed life protection. Illustrated rate was 8.34% Genworth IUL. The IUL was based more on what she could budget every month.

You might want to limit your illustrations to 6-7%. I know that all of the carriers have these great backtested numbers but it helps to adjust to more pessimistic figures. Once you get comfortable writing IUL, you can start using some formulas to adjust each carrier's rate based on caps/crediting strategies.

For the product design, if you're trying to max cash value/distributions, you will want to run a max non-MEC premium using a GPT (guideline premium test) premium. You will also want to use an option 2 DB switching to level upon distribution. This will allow you to stuff as much cash into the policy as possible without creating a modified endowment contract and it will max out your distributions.

Also, be careful on how you run the loans...

Lastly, IUL can be a great or a terrible idea depending on the client. I'm not a huge proponent of these products but that is largely due to my business model (I favor whole life) but there are several posters on this forum that are big fans...hopefully you'll catch a few of their posts as they are more adept at highlighting some fine points that I'm sure I missed.

Anyway, good luck and nice case! You also might want to look at some single premium IUL if you think that this can be a market for you. Feel free to PM me with any additional questions that you'd rather not post here.

 

[scagnt83]

$200.................................

Did you put in a DB and solve for the Target Premium? If so that is a very dangerous way to sell IUL.

IUL premium should always be above Target Premium!!

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You might want to limit your illustrations to 6-7%. I know that all of the carriers have these great backtested numbers but it helps to adjust to more pessimistic figures. Once you get comfortable writing IUL, you can start using some formulas to adjust each carrier's rate based on caps/crediting strategies.

For the product design, if you're trying to max cash value/distributions, you will want to run a max non-MEC premium using a GPT (guideline premium test) premium. You will also want to use an option 2 DB switching to level upon distribution. This will allow you to stuff as much cash into the policy as possible without creating a modified endowment contract and it will max out your distributions.

This is exactly how to sell and design an IUL policy. I see that I taught Ray well


If you are using IUL for accumulation purposes, you always start with the premium, then solve for the Minimum DB. If not then you can get yourself (and more importantly your client into big trouble down the road).

I also would never set client expectations above the 7% mark. And I never set funding expectations above the 6% mark (meaning that if the premium does not sustain the policy at 6% then it needs more premium).

Pretty much the only UL that should be sold at Target is a GUL. (which is a totally different animal)

UL Target is a benchmark for what you are paid on. Not for what a policy should be funded at.

 

[axeman462]

well, since nobody else is going say it, Congratulations!

 

[NinjaNic]

yikes on the 8.34%...we look at all IUL products and back test them ourselves using a rolling monte carlo comparison back to 1950. This product would have done 6.59%, 80% of the time, 5.95% 90% of the time. So do run 8.34%, I would estimate that in the 20-30% range...

IUL should min/non-mec always in my opinion. if you are going for db, this isn't what you want to sell.

 

[houcoogster]

Good Job!

Approx... how much time did you invest to write this case? How many trips?