Fixed Indexed Universal Life
January 2, 2013 
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Fixed indexed universal life has been on an incredible hot streak in terms of growth in sales over the past 5 years. With the increasing inevitability that taxes will have to be increased to pay for our debt issues to the incredible income and death benefit features that these retirement products have, it should come to no surprise that FIUL products are doing well.
We recently came across a great blog on the subject from one of our sister sites that we had to share. The article came from Annuity Think Tank and the title was “FIUL Power Phrases for Your Certain 2013 Sales Success“. Check out the full article below.
Fixed Indexed Universal Life (FIUL) has been one of the fastest growing products in 2012 and shows no signs of letting up in 2013 as savers and investors increasingly look at Life Insurance as a separate asset class in a zero rate world and where tax rates are cratering at their last gasp of all -time lows as well.
Here are some power phrases to get prospects pumped and primed to think about seeing fixed indexed life as an alternative to an overbought bond market and most of all a solution to wealth transfer or basic protection to ensure the lives and legacies of loved ones. This is where the discussion should start.
At retirement would you rather have a lifetime income stream that you can control that may be tax free or an uncertain income stream that you can’t control and is fully taxable?
If you could control potential 25% losses for the next 25 years (the median tax rate for a middle class American at age 60 for 25 years-source IRS) how much of your safe funds could you use to avert this large loss of your family’s legacy?
In the future do you think with the looming fiscal cliff that taxes will go up or down? If up, would you rather pay taxes now, later or never in protecting your loved ones and if funded properly provide a lifetime tax advantaged income for life.
If you could buy a AA rated insured tax free bond which are hard to find these days that pays 4% tax free interest which is even harder to find (price would vary by age and a municipal bond is a security product whereas a FIUL is a Life product) and pay 60 cents on the dollar and get back one dollar tax free rather than having to pay capital gains taxes like the bond, how many of these bonds would you buy $100,000 or $200,000.
Unless, rates change, like VUL and its predecessor UL, millions of these FIUL policies will suffer a similar fate and implode. Do not leave the funding of this great alternative to luck. Many FIUL advisers cross-sell both FIUL and FIA. The acronym F-I-A is a great way to remember how to offer Fixed Indexed Universal Life or its cousin, VUL and UL properly to ensure maximum performance.
Fund it right –Not at target-relying on those 8% net illustrations based on pie-in the sky market performance is like the luck of getting a paper cut opening a get well card. Don’t get into an illustration battle.
Illustrate it right- Most FIUL illustrations carry the 1990’s historical numbers which was the second greatest bull market in history and since it occurred at the beginning of illustration provides a positive sequence of returns and unrealistic outcome. Use Monte Carlo or back testing software to demonstrate random returns which are more realistic. I see the results of a 30 year bull market for bonds being used showing a drop in rates from 14% Treasuries to 1.70%. Witnessing another bond market rally like the last 30 years is about a likely as surviving a cordless bungee jump fall.
Allocate it right-Even though an FIUL is just a wrap around an FIA and crediting methods are designed to produce similar returns, the difference between the NASDAQ and S&P 500 over the years can be in the tens of thousands of dollars in cash value and income over time. Use blended indices including hard assets like Gold to provide optimal return with less risk.
Life Insurance illustrations are like marriage, you learn to pay-either attention or dearly. Through paying attention to these power phrases and suitability points, FIUL can be a potent and powerful tool for lifetime legacies of lifetime income and protection.
