Games, Gimmicks and Tricks

  • Why is this flimflammery allowed to continue?
  • Where are the laws to prevent companies from misleading people?  

--  Senator Metzenbaum

1993 -  GOV - When Will Policyholders Be Given The Truth About Life Insurance? 

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

Letter - Mike Yanacheak (IA)

2014 1113 - IULWG, NAIC

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

  • 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