Mr. Birdsall asked if the agent compensation structure for IUL products provide greater incentives for agents than is provided by the compensation structure of traditional universal life (UL) products.
Bobby Samuelson (MetLife) said that a compensation study he had previously conducted found that, on average, IUL policies have a target premium 80% higher than the average target premium for UL products.
(p6-155) - Bobby Samuelson (MetLife) said the companies that are not in support of the ACLI proposal are not opposed to the IUL product but are opposed to the current illustration practices.
He clarified that the IUL product is strictly a general account product that uses general account returns to hedge the index risk within the product.
He said one of dissenting companies’ concerns is that IUL illustrated rates tend to be double the rates used to illustrate traditional universal life products.
He said the dissenting companies are also concerned about indexed loans, which can lead to significant leveraging within the policy.