UL Illustration Software Premium Algorithm

[Pancur]

Hi,

I asked this question to my FMO but their rep as almost always has no clue so I hope and I'm actually positive that most of you know the answer to my question.

I run ING Illustration for GDBUL II Product (Solve for Premium) and it came up with Annual Premium of $573.

The illustration also shows Lifetime Guarantee Annual Premium (min. premium to maintain death benefit for the insured's lifetime) is $398.

In other words the insured could pay the $398 minimum premium to maintain guaranteed death benefit for his/her lifetime assuming no loans or partial withdrawals are made.

My question is how the illustration software came up with the $573 premium which is 44% more then the minimum.

Do illustration softwares use some kind of fixed algorithm to calculate premiums which are always higher then the minimum premium required?

Thank you in advance for your help.

 

[Larry Tew]

When you solve for premium, you have to give the program a target value at a specific time - that is what the premium "solves" for. Your solve was based on what you asked it to solve for.

 

[dgoldenz]

You can always compare the value of the illustration with what Compulife shows to see if it's correct. If they match up, you should be good to go.

 

[Pancur]

When you solve for premium, you have to give the program a target value at a specific time - that is what the premium "solves" for. Your solve was based on what you asked it to solve for.

If by target value you mean premium then I didn't give it but I did give time to 121.
Compulife quote shows the minimum premium 398.
Since I didn't specify premium the illustration must use some default to to solve it for. The question is how the default is calculated.

 

[WinoBlues]

If by target value you mean premium then I didn't give it but I did give time to 121.
Compulife quote shows the minimum premium 398.
Since I didn't specify premium the illustration must use some default to to solve it for. The question is how the default is calculated.

Check the defaults in the solve. It may be set to target as opposed to minimum. Or set to have a specified cash value at a certain age. My first guess is it being set to target.

 

[scagnt83]

If by target value you mean premium then I didn't give it but I did give time to 121.
Compulife quote shows the minimum premium 398.
Since I didn't specify premium the illustration must use some default to to solve it for. The question is how the default is calculated.

Are you comparing a Compulife quote to the ING illustration system quote?

If so, always go with the recently updated company provided software over any third party software.

If in doubt, call an internal life wholesaler/sales rep and have them run it for you. But the third party software will be wrong before the company software.

 

[dgoldenz]

Are you comparing a Compulife quote to the ING illustration system quote?

If so, always go with the recently updated company provided software over any third party software.

If in doubt, call an internal life wholesaler/sales rep and have them run it for you. But the third party software will be wrong before the company software.

Yes, but if the two numbers match up, it should be accurate. There shouldn't be a 50% difference.

 

[WinoBlues]

Bet the higher amount is the comissionable Target. Nice if it is. Rolling Target.

Yes, but if the two numbers match up, it should be accurate. There shouldn't be a 50% difference.