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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81602  
Subject: Info gleaned from the posted IUL example Date: 9/20/2013 8:53 PM
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Presented without editorial comment.

Pouring over the Allianz IUL example, trying to tease out some numbers:

There is a 10% load.
The "premium charge" is flat 5% of every deposit.
The "policy fee" is flat $7.50/mo = $90/yr

Deposit is $1800/yr = $150/mo
Deposit = 1800, fixed fee = $180.
180/1800 = 10%
All this is constant and is therefore a Load.

The load in the first 7 years is about 59%,
The load for the next 3 years is about 43%.
The load thereafter is 10%..

Life insurance premium is also added, but that is a purchase so doesn't count as a load. It is an Expense. It varies in line with the cash value.
This expense ratio is approx 22 bps.

This cost is for a 26 years old at the start. Insurance is very cheap at 26. The cost for an older person would be more, so the expense ratio would probably be higher for someone who started at 35 or 40.

Other Allianz literature mentions that you can get a higher cap for an additional 1% load, but this example doesn't say if it has this or not. The example does not say what the floor & cap are, nor what the index is.

The example computes out to a constant annual return of 8.8%, with no variation -- no year at 0% (floor) and no years at 12% (cap).
The example declares that the IRR is approx 8%
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