I understand very well how IULs work, thank you very much.Unfortunately, you don't, quite obviously.You have no idea how amusing that statement is.And again, the amounts credited to the account reflect the changes in the INDEX, only, (yes, subject to caps and floors), and DO NOT include dividends.How did you think the floor & caps were determined?Dave, I'm going to be blunt. It doesn't matter if the insurance company buys index options, holds shares of Vanguard's S&P fund, or has magical unicorn horns that return 30% per year automatically.By the normal use of the English language, the way it is actually used by people and investors, when we say "Dividends are included in returns", we mean that when people are getting returns tied to an index, that would be the numerical value of the index PLUS THE DIVIDENDS. It does NOT mean "well, you only get the change in the index, but because the insurance company gets dividends on things they are invested in they can set a higher cap than they might otherwise".I'm going to state this, again. THE AMOUNTS THAT ARE CREDITED TO POLICYHOLDERS IN AN IUL ARE TIED TO CHANGES IN THE UNDERLYING INDEX (subject to floors and caps and participation rate) AND DO NOT INCLUDE DIVIDENDS PAID BY THE COMPANIES WHICH COMPRISE THE INDEX. The fact that the insurance company decides to set caps based on an expectation they have for returns on the assets they (the insurance company) holds does NOT mean "dividends are included in the returns" by the normal usage of the English language. If you are stating that they are included you are factually incorrect and directly contradicted by the language of the (at least three) companies that have been cited in this and other threads. When Ray's spreadsheet includes S&P 500 returns for an IUL that reflect only changes in the index and do not include dividends, his spreadsheet is CORRECT in that regard.Again, the manner in which the insurer chooses to invest its own assets to fund its obligation to policyholders is interesting but is a SEPARATE issue from the terms of the contract. At this point in the discussion, it appears that you are deliberately confusing the two in an attempt to obfuscate.-synchronicity
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