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When it comes to IUL, simpler is better

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Let me first start off saying that I’m a broker general agent (BGA).

When we look at indexed products, we look at a variety of products. We want to have more than one company that offers IUL.

Having variety is important because companies are often making changes and we need to have a carrier that’s been in the market a long time. But even some of these carriers that are newer have also had the opportunity to see what has been designed properly and what has been designed improperly.

I do think that when it comes to IUL, simpler is better. There are a number of companies out there right now offering a whole bunch of varieties but when it comes down to it, not many customers are buying those products.

The simpler the better. I don’t’ want to give them 15 different choices because it muddies the water.

Also important is taking a look at the stability of the company offering the IUL product. Even if they’ve been doing IUL for a long time, what else is going on in their business? It’s important to ask yourself if you want to attach yourself to an indexed product line that’s having a rough time, businesswise.

What we like to see are conservative illustrations. We don’t like to see 8, 9, 10 percent illustrations for IUL. Other IMOs and BGAs do that and make them look great but I think that’s a problem that’s going to bite people in the butt down the line. Showing conservative illustrations of 5.5 to 7.5 percent is more realistic — and hopefully a bit low on the conservative side. Consumers also like longer guarantees — 20, 30, 40 years — somewhere in that area. At least the guaranteed side comforts consumers in case of a downside. Consumers like to see that.

The other thing is asking yourself if you can have an indexed policy kill two birds with one stone. Maybe a long-term care or CI rider with it. They can tap into their IUL to fund that. 


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