Gary Bleetstein, Senior Vice President
There was quite a lot of discussion in the industry about IUL and in its early stages, how will it look, and how will it illustrate? Remember when carriers would set maximum crediting rates based on their own lookback durations and their own calculations. This alone caused the industry to realize IUL would look either great or even better than great. At this point everyone or almost everyone wanted a level playing field for illustrating IUL.
Then came the multipliers and other factors that made IUL products impossible to compare, especially when it came to accumulation and expenses. Some carriers were riding high on illustrating top rates, bonus’s and huge multipliers, some guaranteed and some not.
After a number of years of this, the industry has and plans to have this fall, a new Regulation spirit where products with very high multipliers, high cap rates and other features may need to review how they will compete when they may not be permitted to use these factors when illustrating IUL in the future. This is one way of leveling the entire playing field. Another change being reviewed dis the way a carrier illustrates loans in an IUL Going forward, loans are going to be shown at .5% higher than the stated loan interest rate which will effect product performance.
Well 2015 is behind us and now it’s time to re-evaluate the true performance of an IUL and in that case, any cash value life insurance product. Our clients and advisors expect our carriers and our distribution to give them all of the facts and let’s hope the new AG- 49-A does just that for IUL.