Oh, and the cost to reduce the bumpiness? About $440,000. That's a big cost to solve a problem that volatility is willing to fix for you for free after a few years. Another way of looking at it is the classic "efficient frontier" type of thing - calculate the standard deviation of IUL returns (obviously taking the parameters for a specific product from a specific company), find a mix of, say S&P and bonds (VTSMX and VBMFX, for example) that has the same standard deviation, and then see what the IRRs are for both strategies. -synchronicity
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