Games, Gimmicks and Tricks

MR. DAVID H. RAYMOND: From several sources I have gotten the opinion that interest rate games used to be almost invincible in the early years of Universal Life.

Partial sophistication now has reduced their effectiveness, so that the emphasis is turning toward cost-of-insurance games.

Almost nobody can understand those yet.

They work wonderfully, at least for the next 10 years.

1992, LIFE INSURANCE SALES ILLUSTRATIONS, Society of Actuaries

11/13/2014
IULWG

Letter - Mike Yanacheak

It is my recollection and understanding that AG 49 was created in part due to a problem with ‘gamesmanship’ in IUL illustrations.

After the introduction of indexation, this was no longer a problem except for some "tricks" (e.g., At one point, indexation was only semi-annual and not monthly, so people took policy loans one day
after the indexation day and repaid the loan prior to the next indexation day. They made a lot of money out of these transactions).

-- **Dr. Kahane, not a member of the Society, is Associate Professor and director of the insurance center at Tel Aviv University.

1982 - THE EXPERIENCE OF LIVING UNDER SUSTAINED INFLATION, Society of Actuaries, 18p