What do most agents want? To illustrate more borrowing in retirement.
How does this product stack up? Example: 45-year old male, pays $10,000 in premiums until age 65 and then borrows from the policy from ages 66-90. I used an increasing death benefit using a 6.92% rate of return*. How much could be borrowed from the new product vs. some other unfortunately popular products in the market?
New IUL Product $40,005 every year
Pac Life $37,552 every year*
North American $37,132 every year**
Minnesota Life’s Omega $34,469 every year
*The Pac Life illustration was run only at 6.21%. I was told that is the default rate. What’s crazy is how well it illustrates at such a low rate of return. It’s because the policy has huge expenses and a bonus structure inside a black box that Pac Life refuses to explain. This is why it’s my least favorite product in the marketplace (but agents love it even though they have no idea how it works because of the high commissions).
**NOA and Midland both just dumped caps on their older IUL policies.
1) Guaranteed bonus from day 1. The new product bonus vests from day 1.
2) The Per 1000 (AKA per unit) charges have been drastically reduced (important if a DB drop is needed).
3) Ability to switch investment options EVERY YEAR.
4) New rising interest rate investment index.