#240 | Assessing Sequence of Return Risk – Part 1
Everyone knows that variability of returns in both Variable UL and Indexed UL creates sequence of return risk, but what exactly does that mean and how does it actually translate into policy performance? As it turns out, sequence of return risk is one type of risk with many manifestations that interact differently with different types of products. As you might suspect, products with charge-funded multipliers are generally more sensitive to sequence of return risk. But the interesting part of the story is which products are impacted the most and why. And, as you might imagine, the results are pretty interesting.
This video only addresses the product mechanics, not any effect of illustrated income. A subscriber asked about what happens with illustrated income and let’s just say that the results – at least as far as I’ve seen – are pretty interesting. Stay tuned for a Part 2.