A More Balanced Approach to Comparing Policy Illustrations, OPINION
January 31, 2018 by Tom Doruska, FSA, MAAA, is Senior Vice President, Life Products, at Global Atlantic, and Chair of the ACLI IUL task force.
Factoring in non-guaranteed elements adds objectivity
Life insurance illustrations are designed to provide clients some perspective on how their policy may perform over time, based on unchanging assumptions. However, assumptions are inherently variable. Let’s take a look at indexed universal life insurance policies and some of the factors involved, including how you might level the playing field.
THE ART OF THE ILLUSTRATION
Since interest crediting is a selling point and a concept most clients understand, it’s commonly used as a way to compare carriers and as a differentiator on illustrations. We run illustrations using assumptions based on the current environment. However, assessments of the environment and appropriate assumptions are open to interpretation.
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