After you read this newsletter you might want to sign up for the IUL educational webinar. We will be going over what makes a “good IUL” and we’ll be breaking down the commission structure of various policies.
To sign up for the webinar on recording, click on the following link (it will be recorded, so sign up even if you can’t make it live): https://strategicmp.net/iul-educational-webinar
IUL Commission Handbook
I also just created a Handbook that all agents will want to read. If you want to know how to design policies properly for clients and get paid the maximum amount, click on the following to download the IUL Commission Handbook: https://strategicmp.net/iul-commission-handbook/
Why it’s an Outrage Transamerica is #1 on the Top Selling IUL List
Did you see the Top Ten IUL (Indexed Universal Life) list?
To read it, go to https://insurancenewsnet.com/innarticle/iul-market-1q-top-10-shuffle
Transamerica is #1 one the list, and when I saw this I couldn’t believe it.
Let me first qualify the list. Companies are ranked by “target” premium sold. Target premium is what agents are paid on. For example, the target on a client who pays a $15,000 annual premium might be $5,500. The agent is paid a commission as a percentage (50%, 70%, 90%, 110%) of target premium.
Why am I outraged that Transamerica is at the top of the list?—because I don’t think the Transamerica policy is very good. It would NOT be in my top ten best policies available. I’ll illustrate this in an example below.
If the Transamerica policy isn’t very good, why is it #1 on this list?—my suspicion is because it is the primary policy sold by agents who are part of WFG (World Financial Group). If you couldn’t guess, I’m not a big fan of WFG (and their agents pushing the Transamerica policy to the top doesn’t help).
What is WFG? Essentially it’s a huge marketing organization. Anyone who’s been in the industry for some time will know all about WFG and their business model. If you are really curious about WFG, just type in WFG and scam in Google, or you might add in the names A.L. Williams and S. Hubert Humphrey into your search. What you find will be a real eye opener.
Average annual Transamerica IUL premium is $2,643!
If you know anything about selling life insurance, you’ll know that having $2,643 as the “average” premium is insanely low. Assuming the policy is not run at target, the average target premium would be about $881.
How many policies would Transamerica need to sell to be #1 in target premium? They did an astounding 18,981 policies 2017 YTD.
You know how many policies the company I think has the best IUL policy did? 1,103 with an average target premium of $27,000.
Source: 1Q 2017 LIMRA’s U.S. Retail Individual Life Insurance Sales by Channel with All Splits
Let’s look at an example
45-year old male in good health who will pay a premium of $15,000 a year until age 65 and then borrow from the policy from ages 60-90. I used an increasing death benefit which was switched to level when appropriate to lower costs. I used the “default” crediting rate for each policy for this example.
How much could be borrowed each year from ages 66-90?
Transamerica IUL (#1 policy) $31,535
My favorite IUL policy $54,427
Total over the borrowing phase?
My favorite IUL $1,360,675
To download the Transamerica illustration for review, click on the following link:
Can someone tell me why any client would choose to use Transamerica over my favorite IUL (or any number of other “better” IULs)?
This is exactly why I wrote my book Bad Advisors How to Identify Them: How to Avoid Them. If you would like to download a copy of this book for FREE in an e-format, click on the following link: