Expert: IUL illustrations nearing a crossroads as engineered indices grow
November 27, 2024 by John Hilton
Indexed universal life is a good product that is not being marketed and packaged correctly, said a leading industry analyst during day two of NAILBA 43.
When properly marketed, IUL is a good “low-risk, low-return” financial product, said Bobby Samuelson, editor of the Life Product Review.
Unfortunately, the proliferation of engineered indices has given rise to wildly inflated illustrated returns.
Click HERE to read the full story via INN
Wink’s Moore on the Market: I adore my friend Bobby Samuelson, but I am not sure I entirely agree with him on this piece.
I absolutely would not classify indexed life as a “low-risk, low return product.”
Absolutely not.
This is a product that has relatively high charges, the opportunity to earn 0%, and the possibility of losses in cash value when the market does not perform. Don’t even get me started on loan rates…
If anything, I would say indexed life insurance is a moderate-risk, moderate return product.
In addition, I am clueless where the “there are now 207 indices by 51 insurers” could have come from?
Indexed life has 56 indices being offered by 47 insurers.
If you expand that to the entire indexed insurance market, there are 214 indices being offered by 85 insurers.
So, something isn’t jiving.
I do agree with his point on this, however:
“IUL is not going anywhere. We’re now grappling with a product that is fundamentally good, fundamentally serves clients, but we have to do it differently as an industry in order to make it sustainable for the long run.”
Thanks for the heads up, John Hilton with InsuranceNewsNet.
