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Hi Ray,

But as you pointed out earlier, how the *company* invests has no bearing on what the policyholder gets.
OF COURSE it does!
A. how the company invests in its general account determines how much budget they have to buy the option spreads. The higher the available budget, the higher the floor & caps they can buy.
B. how the dividends affect the option pricing determines how much the budget buys OF the option spreads. The lower the net cost of the participation spread, the higher the floor & caps they can buy.

And, really, why do you think that all the IUL brochures very explicitly say "index (excluding dividends)"?
So people understand that the portion of the crediting calculation that consists of the index price is price only. Its just specifying one of the calculation's variables, not so complicated to understand that.

The net credit includes the dividends... they can't be avoided.

Dave Donhoff
Leverage Planner
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