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|Subject: Re: 7702 Private Plans (indexed universal life)||Date: 3/31/2013 12:22 PM|
|Author: Dwdonhoff||Number: 71598 of 80182|
How does an IUL compare to other low-risk strategies, such as a ladder of FDIC insured CDs, or bonds?
I would expect insured CDs and unhedged bonds to underperform the hedged structure used inside an IUL... but if you can find historical data, maybe Ray can add a column (or ful worksheet) to consider the question.
I get that you are discussing structuring a contract with as "thin" a death benefit as possible, but you still have increasing mortality expenses per $1,000 of death benefit as the individual ages and (as discussed at length on this thread) variability in the crediting rate on the cash value.
I know the thread is long & scrolly... but the solution to your dilema is there;
As the mortality charges increase per dollar of death benefit, the required amount of death benefit decreases faster.
I'd be leery of making a blanket statement that the mortality costs are always going to be decreasing, but that may be due to overexposure to a compliance department. :-)
Not sure what you mean here.
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