#117 | The Death Benefit IUL Dilemma – Part 2

Using Indexed UL for death benefit is a seductive proposition. At maximum AG49 illustrated rates, DB IUL products can have premiums 20-40% lower than Guaranteed UL products issued by the same company. But there's a fundamental problem - AG49 reflects the average of returns, not the full spectrum of returns. Overfunded IUL products can handle the variation in average returns but thin-funded DB IUL products can't. Running 500 real world return scenarios through the DIT on a generic DB IUL chassis shows that 50% lapse if the premium is solved using the maximum AG49 rate.