Commenting on a more balanced approach to comparing political illustrations by John Grilli
Al -Alala in non -compressed elements add objectivity
Life insurance illustrations are designed to provide customers with some perspective on how to perform their policy over time, based on unchanging assumptions. However, the assumptions are changing by nature. Let’s take a look at the indexed and indexed life insurance and some of the factors it involves, including how to settle the stadium.
The art of illustration
Since interest in the benefits is a point of sale and concept that most customers understand, it is commonly used as a means of comparing transportation companies and chaos in illustrations. We run the illustrations using assumptions based on the current environment. However, environmental assessments and appropriate assumptions are open to interpretation.
In fact, no one knows what the future hides. Credit rates are not guaranteed and will vary unexpectedly in the long run. But caring for the benefits is not the only non -guaranteed element in politics. Politics and drawings can vary. In fact, many transport companies have recently taken the lifting of non -guaranteed fees on power blocks. You not only know the time when the current fees will be applied or the number of times you will change. What we know is the fees today and the maximum fees that policy allows.
As a result of these factors, illustrations must be contained in different scenarios to help draw the image. Each clarification shows the performance of politics on the basis:
- Assumptions of interest rates and current fees
- An alternative scenario for the fixed account at the level that is credited with the current fees
- Values ​​of the middle point between fees and current and guaranteed credits
- Ensure the minimum credit and the maximum fees
Customers need you – their agent – to help explain everything and compare their options. With interest and unlocked downs, how can you make sure that you compare apples to apples?
A more balanced approach
A comparison of the values ​​of cash surrender over time with the values ​​of the current account can be a tool to help settle the field of play and provide a more objective comparison of the products, given the nature of the non -compressor elements. To devise a scale and formula:
- Suppose that the value of cash surrender equals the value of the current professor’s book account that earns a degree of 100.
- If the value of surrender is half the value of the account, it earns a degree of 50, etc.
- Using an average weighted in both 10 and 20 years, available in illustrations, adding scores for guaranteed, alternative and medium scenarios.
- Combine the cumulative results of the two periods to obtain a total comparison degree.
Take a look at the associated table to see how different products appear in the market today, starting with The Atlantic International Life elite. The higher the result, the less cash surrender will be vulnerable to changes in unaccredited assumptions.
The next time IUL is presented to a customer, try this small experience for a more balanced approach to comparing policies. For more information, please visit www.globalatanticlife.com.
Tom Doroska, FSA, Maaa, is the first vice president of life products, at Global Atlantic, and the head of the Acli IUL work band.
