IUL Commission Handbook
I was so put off by the Top 10 list discussed in this newsletter that I decided to create an Indexed Universal Life (IUL) Commission Handbook. You’ll understand why after you read the newsletter. To download the IUL Commission Handbook, click on the following link: https://strategicmp.net/iul-commission-handbook
Webinar-Understanding IUL Commissions and Policy Design
If you want to know how to properly design an IUL policy that’s best for the client and learn what you should be getting paid, you’ll want to attend this webinar. To sign up, click on the following link to sign up for the webinar: https://strategicmp.net/iul-educational-webinar
Why the Top 10 IUL Sales Report is Misleading
The term “misleading” and “life insurance sales” seem to go hand in hand, and another example of this is on display with the recent release of the list of the Top 10 companies that sell IUL.
Wink, Inc. puts out a report of the Top 10 IUL companies. That report lists companies in order by measuring “Target Premium” (TP). To read the Top 10 list, click on the following link: https://insurancenewsnet.com/innarticle/iul-market-1q-top-10-shuffle
What is TP? It’s the amount of premium that is used to calculate the commission paid to insurance agents.
For example, for a 45-year old who pays a $15,000 premium into a “good” IUL where the illustration is run at the MEC minimum death benefit (increasing death benefit to start, then level at age 65), the TP would be somewhere around $5,500.
If you ran the same illustration but you ran it at “target” premium, the TP would be $15,000.
Agents are paid on TP. So, if you have a 75% contract you’d get $4,125 in the first example and $11,250 in the second.
Why is the Top 10 list based on TP misleading?
TP sold is not a good indicator for the “quality” of the policy.
Transamerica is #1 on the Top 10 list. But Transamerica, in my opinion, does NOT have a very good policy and has no business being in any Top 10 list. To learn more, read my newsletter titled Why it’s an Outrage Transamerica is #1 on the Top Selling IUL List by clicking on the following link:
Pac Life is #2 on the Top 10 list and I’ve seen promotional material from them that is essentially a dial-a-commission piece (showing agents how to increase their commissions through product design).
If you want to know why I’m not a fan of the Pac Life policy, click on the following link to read my newsletter titled: Why I Don’t Like the Pac Life IUL Policy.
If advisors had any idea of the expenses in the Pac Life IUL, they would be blown away because they are so high.
You know how many IUL policies are on the Top 10 list that I often recommend?
That might come as a shock to readers who might be using one or more of the companies on the top 10 IUL list.
My criteria for the IULs I recommend are pretty simple:
-Good illustrated rate that is not a bogus rate pumped up by non-guaranteed bonuses
-Highest borrowing amount in retirement for policy holders using “reasonable” assumptions
-Fixed lending rate on loans from the policy
-Needs to be a company I can trust
When I apply the above criteria to the companies on the Top 10 list, NONE of them make the grade for me to recommend their policies on a consistent basis to advisors.
The bottom line is that any Top 10 IUL list that puts companies in order by amount of target premium sold is a misleading list if you think that the list is a proxy for the “best” IUL policies.
Roccy DeFrancesco, JD
Strategic Marketing Partners