IULs get their gains from option spreads, and the options include the dividends.I know you've said this. But you haven't supplied anything that shows that the IUL terms include dividends. Ray already showed some examples where the dividends are excluded. And here are a few others if you don't want to go back and find his post:AXA: http://www.axa-equitable.com/life-insurance/universal/athena... (bolding added)One-Year Options:U.S. Large-Cap IndexChoice S&P 500 Price Return indexS&P 500 Price Return indexU.S. Small-Cap IndexChoice Russell 2000 Price Return indexRussell 2000 Price Return indexInternational IndexChoice MSCI EAFE Price Return indexMSCI EAFE Price Return indexThree-Year Option: (not available in NY)U.S. Large-Cap IndexChoice S&P 500 Price Return indexS&P 500 Price Return indexAnd in this Allianz brochure https://www.allianzlife.com/IIG/Content/Documents/Forms_And_... all of the methods of calculating say that they "track changes in an index". Since it doesn't say if the S&P 500 index that it's tracking is the 'price return' or 'total return' index, it's not clear if it includes dividends or not. However, since the S&P 500 index that most people are familiar with and that gets quoted as the 'S&P 500 index' is the price return index, I doubt that it's the total return index that is being tracked, since it doesn't specifically say 'total return'.The S&P 500 returns quoted on this Hartford IUL page http://www.hartfordinvestor.com/cs/Satellite?c=Page&cid=... are the price return gains/losses.So, while the insurance companies may receive the dividend income from their investments, not all of them pass the dividend income along in their IUL income.AJ
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