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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76238  
Subject: Re: IUL credits *include* Dividends Date: 9/24/2013 12:56 AM
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Hi Synchro,

If "IUL credits include dividends", as you keep insisting they do...
Then why doesn't Allianz, or any other IUL issuer, state in their marketing or informational brochures which are distributed to the public, that "IUL credits include dividends"?

Easy to answer; You are no dummy in this realm... you state you are not a financial advisor, but you are certainly not unsophisticated. You've understood how & why dividends affect IUL credits relatively quickly after I'd begun explaining, but took doggedly to arguing about the "commonly understood" meanings (rather than actual reality.)

Have you noticed how blindly confused *some* other folks around here get about this?

One part of the IUL credit calculation is the specific price print of the index. Simple folks get confused about whether this includes, or excludes, dividends... so the IUL companies state "not including dividends."

The other 2 parts of the IUL credit calculation (the floor & ceiling) include dividends... but frankly, very few people in the investing public understand options at all, and its not necesary to understand them to use an IUL anyway... so there is no real upside to being that candid about the guts of the product.

Words and phrases have certain meanings. If your rather...unusual interpretation of the actuary's comments was one that was accepted, then it would be no problem to say that to the public in marketing the products.
Andy had no problem explicitly explaining that dividends are included. The only 'problem' with highlighting it as a brochure issue is that its far above the financial sophistication level of most people who would read it.

Its true, but unnecessary for the use of the product... and completely irrelevant to the bottom line of the product.

Cheers,
Dave Donhoff
Leverage Planner
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