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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 75339  
Subject: Re: IUL credits *include* Dividends Date: 9/24/2013 12:10 AM
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I am most definitely NOT stating or implying that "IULs rip off the client by withholding dividends".
I never said *you* did... but while you're busy having an aneurysm, there are actually others participating on this community, and more than one *HAVE* made such a claim.

Its not *all* about you, buddy.

I AM stating that, by the ordinary definition of the words "includes dividends", that an IUL contract is credited by changes in the NUMERICAL VALUE OF THE INDEX, on a point-to-point basis, subject to the floors and caps (and participation rate) as per the contract terms.
And while you keep repeating opinions, I have provided factual proof to my statement;
IUL credits include dividends (when the index used has dividends.)

Everyone has the right to conjur up their own opinions, and yours are incredibly popular.

My facts are right.

I want to repeat, once more: I am not casting aspersions on IULs in general or specifically, in fact I am not making any statements, positive or negative, about the product or about any issuer of the product.
Sure, and I recognizethat. Prior to getting this earworm in your head about dividends, you've been quite balanced.

I am simply stating the following:
A) Saying that the pricing of an insurance product is determined in part by the costs to an insurer, and one aspect of that cost is impacted by dividend yields on indices, is NOT the same as saying that the amounts credited to an IUL contract "include dividends".

Fine... saying 'A' is not the same as saying 'B.'

IULs that credit on indexes with dividends, pay credits that include dividends.

B) The amounts credited to the account are calculated by reference to the point-to-point changes in the numerical indices chosen and those values do not include dividends paid by the underlying companies. Period. That is the specific language of the contract.
Wrong, as proven and explained by someone who actually executes the IUL trades. There is no IUL contract stating that dividends are excluded from the determination of the caps, and there *IS* an actuary on record stating that exactly as true.

C) The fact that dividend yields often have an impact on the pricing and terms of an IUL policy is interesting and good to know, but the company is not legally obligated in any way to make any changes to the policy if dividend rates change.
Nobody's ever said otherwise. Competition in the markets is the best enforcer.

I hope I've made myself clear. I understand what you're saying and have made my disagreements with your definition of "includes dividends" apparent.
You have made your opinion clear... oddly, even after a non-anonymous actuary of arguably the largest IUL provider on the planet has explained how you are wrong.

But again, everyone has the right to be wrong, too.

The bottom line is the bottom line, and if a no-dividend strategy wins more than a with-dividend strategy, it speaks for itself.
On this issue we agree.

Great... let's let go of silly points that we agree are irrelevant anyway.

I have always respected you, and have no bone to pick with you. Peace brother!
Dave Donhoff
Leverage Planner
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