Infinite Banking Concept, Cash Flow Banking, or Bank on Yourself

[Wai Fung]

Has anybody used a IBC, CFB, or BOY policy to purchase real estate and use the returns to pay back the policy at higher interest rates than the policy charges? If so, what are the pros and cons? What are your thoughts about IBC, CFB, or BOY? Thanks.

[Albert Bui]

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

[Zachary Paschke]

Originally posted by @Albert Bui:

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

 Yes. I’ve never heard of a company that would not send a MEC warning. Carriers don’t like it when your policy becomes a MEC. I’ve written policies that MEC on purpose, but there was good reason for it.

The illustrations will also show if the policy is expected to MEC.

[Albert Bui]

Originally posted by @Zachary Paschke:

Originally posted by @Albert Bui:

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

 Yes. I’ve never heard of a company that would not send a MEC warning. Carriers don’t like it when your policy becomes a MEC. I’ve written policies that MEC on purpose, but there was good reason for it.

The illustrations will also show if the policy is expected to MEC.

 Is the reason you want to purposely "MEC," a contract to get more money into it than a DB or defined benefit plan can allow which seems to be maxed at 290k in 2021 ? 

[Thomas Rutkowski]

@Albert Bui - Its a much more complicated sale, but if an elderly client is healthy and capable of qualifying for life insurance, then a maximum over-funded MEC will provide more retirement income than the same amount of money going into an annuity. Plus it has the death benefit protection... very little, but better than nothing.

[Thomas Rutkowski]

Originally posted by @Albert Bui:

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

There are two rules that a policy needs to conform to. One is the MEC, 7-pay test. The other is that the entire contract must still meet the definition of life insurance. I usually use the Guideline Premium Test. The guideline premium is the maximum premium that you can pay for a defined death benefit and still meet the definition of life insurance. Usually people under 45 will run into the guideline premium before they run into the 7-pay limit. A MEC is still life insurance. It gets poor tax treatment, but its still life insurance. The policy should be optimized by funding it up to the first of these two that you bump into.

I'm surprised your policy has any room for more excess premium.

[Zachary Paschke]

Originally posted by @Albert Bui:

Originally posted by @Zachary Paschke:

Originally posted by @Albert Bui:

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

 Yes. I’ve never heard of a company that would not send a MEC warning. Carriers don’t like it when your policy becomes a MEC. I’ve written policies that MEC on purpose, but there was good reason for it.

The illustrations will also show if the policy is expected to MEC.

 Is the reason you want to purposely "MEC," a contract to get more money into it than a DB or defined benefit plan can allow which seems to be maxed at 290k in 2021 ? 

Yes. If you break the MEC rules all that happens is the contract becomes a Modified Endowment Contract. It loses the ability to have pre-death tax benefits, but the death benefit is still paid tax free. The times I’ve allowed the policies to MEC they were only being used for death benefit, not cash value maximization purposes. For example every Single Premium whole life policy (assuming there’s no 1035 exchange) will MEC. 

[Albert Bui]

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Originally posted by @Thomas Rutkowski:

Originally posted by @Albert Bui:

Yes Wai,

I have using IBC strategy on a max funded EIUL(equity indexed universal life) policy. The current rate of interest is 3.25% so im paying it back at a higher rate to build the policy further then rinsing and repeating forward.

How has your experience gone with your life policy or life insurance

Albert - You cannot build up the policy further by paying a higher rate. Anything beyond the interest owed is simply applied to the loan balance. Reducing the loan balance does not build cash value, since the cash value is simply the collateral for the loan. And if your policy was designed for maximum cash value, there should not be any room for "Excess Premium". That would either violate the Guideline Premium Rule or create a MEC.

By paying a "higher rate," I meant Im paying back my interest component, my principal balance component, and also additional premium too to build the cash value even further.  I thought I was near maxed too but I had the internal reps look up the policy and they said I had much more room so I've stepped up my premium contribution lately. 

I also heard the life insurance company will give you advance notice and a time frame to fix the MEC before it goes into effect, Have you encountered this testing of the MEC limits from varying companies out there?

There are two rules that a policy needs to conform to. One is the MEC, 7-pay test. The other is that the entire contract must still meet the definition of life insurance. I usually use the Guideline Premium Test. The guideline premium is the maximum premium that you can pay for a defined death benefit and still meet the definition of life insurance. Usually people under 45 will run into the guideline premium before they run into the 7-pay limit. A MEC is still life insurance. It gets poor tax treatment, but its still life insurance. The policy should be optimized by funding it up to the first of these two that you bump into.

I'm surprised your policy has any room for more excess premium.

 Its probably because I picked increasing death benefit so the policy death benefit adjusts up to create a gap in coverage that helps meet those guideline premium and 7 pay tests as opposed to a level death benefit. 

I prefer to have increasing DB while im still building the policy to prevent it from MEC'ing and perhaps when im done funding it ill switch to level DB to reduce costs and have it grow quicker.

Im considering starting new policies as well. Have you seen mutual whole policies implementing this strategy do better or worst than the EIUL policies? (apples to apples in terms of growth, cost of policy loans, etc)

[Thomas Rutkowski]

@Albert Bui

1. Any maximum over-funded policy design should utilize an increasing death benefit. But since we are solving for the lowest possible death benefit for a given premium, there is NO room for any additional premium. That room for additional excess premium must be designed into it.

2. That's exactly how a maximum over-funded policy should be managed: increasing to level death benefit. Also reduce the face amount when you stop paying premiums. Drive the COI to the absolute minimum (~0.25% of total cash value).

3. The difference between Whole Life and IUL is that the IUL takes the dividend they would have otherwise paid you, and they go out to the index options market to hedge. The goal of the hedging is to capture as much movement in the market as possible given their budget. For this reason, I expect the cash value in an IUL to outperform the cash value in a whole life. They're all investing in the same underlying assets. While the IUL may have more year to year variability, it will earn a premium over what the whole life would return.

[Albert Bui]

Originally posted by @Thomas Rutkowski:

@Albert Bui

1. Any maximum over-funded policy design should utilize an increasing death benefit. But since we are solving for the lowest possible death benefit for a given premium, there is NO room for any additional premium. That room for additional excess premium must be designed into it.

2. That's exactly how a maximum over-funded policy should be managed: increasing to level death benefit. Also reduce the face amount when you stop paying premiums. Drive the COI to the absolute minimum (~0.25% of total cash value).

3. The difference between Whole Life and IUL is that the IUL takes the dividend they would have otherwise paid you, and they go out to the index options market to hedge. The goal of the hedging is to capture as much movement in the market as possible given their budget. For this reason, I expect the cash value in an IUL to outperform the cash value in a whole life. They're all investing in the same underlying assets. While the IUL may have more year to year variability, it will earn a premium over what the whole life would return.

 Im sure policy loan costs are all over the board but right now my EIUL's variable policy loan is at 3.25% simple interest while I see some illustrations with 5-6% rates in the mutual whole policies. What are your thoughts specifically as it pertains to policy loans between EIUL's and MWHL

[David Lewis]

@Thomas Rutkowski:

3. The difference between Whole Life and IUL is that the IUL takes the dividend they would have otherwise paid you, and they go out to the index options market to hedge. The goal of the hedging is to capture as much movement in the market as possible given their budget. For this reason, I expect the cash value in an IUL to outperform the cash value in a whole life. They're all investing in the same underlying assets. While the IUL may have more year to year variability, it will earn a premium over what the whole life would return.

They are all investing in the same basic assets, like bonds. No doubt those provide the basic guarantees in terms of the crediting rates to the policy. But, dividend credits from whole life are not just an interest component like it is in a UL policy. Whole life and UL are structurally different from one another, and approach the problem of insurance from 2 completely different angles. In the IUL, the company is buying options with the interest gain, or charging internal fees for the options budget. Then, they go buy the index options with that budget.

But, why would buying index call (or put) options be a better idea that taking the dividend? 

Is there some study showing net positive gains from buying index options for decades on end? Outside of the life insurance industry, do you know of an investment firm that uses this as a long-term high-profit strategy for growing client portfolios? 

[Thomas Rutkowski]

Originally posted by @David Lewis:

They are all investing in the same basic assets, like bonds. No doubt those provide the basic guarantees in terms of the crediting rates to the policy. But, dividend credits from whole life are not just an interest component like it is in a UL policy. Whole life and UL are structurally different from one another, and approach the problem of insurance from 2 completely different angles. In the IUL, the company is buying options with the interest gain, or charging internal fees for the options budget. Then, they go buy the index options with that budget.

**For two apples to apples policies, both companies would have exactly the same risk and could expect exactly the same risk/liability. They have the same problem to solve with exactly the same resources to do it.**

But, why would buying index call (or put) options be a better idea that taking the dividend? 

**Why go to the trouble of hedging if you don't expect to earn a premium over what you would have simply credited in interest? I have analyzed the numbers and IUL DO earn a premium over the debt market rate of return as expressed by the Moody's Corporate Bond Yield. You should understand that Insurance companies have an incentive for the cash value to earn as great a return as possible as safely as possible. The faster your cash value grows in a policy, the faster the risk is driven out of the policy. The risk is the difference between the death benefit and the cash value. That is the amount for which the insurance company is on the hook.

While the interest-crediting may be variable (subject to cap and floor and performance of the underlying index), it will, on an annualized basis, earn a premium over the debt market return that a Whole Life and a Universal Life capture. **

Is there some study showing net positive gains from buying index options for decades on end? 

**Yes. Its easy to do your own analysis by looking at the Moody's Corporate Bond Yield, which is a good proxy for what the insurance company is earning. Historical market performance and Caps are available. Typically you'll find >2% premium for the cash value in an IUL.**

Outside of the life insurance industry, do you know of an investment firm that uses this as a long-term high-profit strategy for growing client portfolios? 

**I've only heard that such a thing exists. I've never confirmed.**

 For two apples to apples policies, both companies would have exactly the same risk and could expect exactly the same risk/liability. They have the same problem to solve with exactly the same resources to do it.

[David Lewis]

**For two apples to apples policies, both companies would have exactly the same risk and could expect exactly the same risk/liability. They have the same problem to solve with exactly the same resources to do it.**

______

I'm not convinced they are taking the same risks. You're equivocating between the insurer, the general investment account, and the policies they issue. The risk and liabilities aren't *just* in the general investment account. Companies that sell par whole life are run very differently than companies that sell primarily IUL, and the risks in each company (and thus for each policyholder) are very different.

________

**Why go to the trouble of hedging if you don't expect to earn a premium over what you would have simply credited in interest?

_______

Again, whole life doesn't merely credit excess interest from bonds. The dividend scale is a 3-factor model at most (probably all) mutual insurers. Aside from that, policyholders hedge in an IUL because they want to speculate (or maybe because their agent told them they would earn more money in an IUL). 

_______

I have analyzed the numbers and IUL DO earn a premium over the debt market rate of return as expressed by the Moody's Corporate Bond Yield. You should understand that Insurance companies have an incentive for the cash value to earn as great a return as possible as safely as possible. The faster your cash value grows in a policy, the faster the risk is driven out of the policy. The risk is the difference between the death benefit and the cash value. That is the amount for which the insurance company is on the hook.

________

Analyzed which numbers? You're saying index options earn a premium over bonds? Can you point to any research showing that buying index call options at the ratio that insurers do for IULs will yield the type of projected returns in these illustrations? Or that it is a profitable strategy? There are investment guys who do structured investments for a living, which is essentially the same thing as an IUL, minus the insurance policy wrapper. Do you know what the expected long-term return on these strategies are?

As for insurance company motives, the only thing they care about is the guarantees because that's all they're on the hook for. They don't really care what the call options earn because it's not being held on their books. When they account for the risk of these policies, they're not speculating about NAR reduction due to index or dividend credits 20 or 30 years from now. The safest way to reduce NAR for them is to keep collecting premium and making sure the cash flows specified in the guaranteed rate matches the liabilities they're on the hook for. The rest is a sales story. Reducing the NAR is a huge benefit to the policyholder, however. So from the policyholder's perspective, yeah they want the cost of insurance to go away as fast as possible.

_____

While the interest-crediting may be variable (subject to cap and floor and performance of the underlying index), it will, on an annualized basis, earn a premium over the debt market return that a Whole Life and a Universal Life capture. **

_____

How do you know it will earn a premium over whole life? Where are the studies to show this? The cap and par rates in IUL are dropping because the options are becoming more expensive and insurers are trying to think up ways to increase the options budget. Market pressures are also forcing insurers to take more risks, and push more risk onto policyholders (e.g. using charge-funded multipliers and higher internal charges for bonuses and proprietary indices). The performance of the underlying index doesn't exactly correlate to the profits earned on these call options that power IUL, either. Investing in call options isn't the same thing as buying an index fund, for example.

_____

**Yes. Its easy to do your own analysis by looking at the Moody's Corporate Bond Yield, which is a good proxy for what the insurance company is earning. Historical market performance and Caps are available. Typically you'll find >2% premium for the cash value in an IUL.**

_____

That's not a study. I mean an academic study or some kind (any kind) of controlled study that carefully analyzes the variables involved in this sort of approach. Historical returns are not predictive, and not a great way to analyze future returns. Look-backs are taking advantage of a bond market that used to earn 8%-10% yields. Where is that in today's bond market? The same is true of look-backs in equities. A 100-year, 50 year, and 20-year look-back produce very different results, and more data doesn't mean more accurate predictions. The economy of 1900, and the drivers of growth back then, are very (very) different from the drivers of growth today. That market existed in essentially a different world. That data is near useless for future predictions. 

If you're using historicals to suggest an equity premium going forward, I'm not convinced that's valid. 

What matters is what is happening *today* in these markets, and the risks being taken today.

_____

**I've only heard that such a thing exists. I've never confirmed.**

_____

I think this gets to the heart of my original question. It doesn't sound like you have any first-hand knowledge that these will in fact perform better than other types of life insurance. What's your confidence level on this? Could you take your conclusions in front of an ethics board or compliance officer and state these as hard facts?

[Thomas Rutkowski]

Originally posted by @David Lewis:

**For two apples to apples policies, both companies would have exactly the same risk and could expect exactly the same risk/liability. They have the same problem to solve with exactly the same resources to do it.**

______

I'm not convinced they are taking the same risks. You're equivocating between the insurer, the general investment account, and the policies they issue. The risk and liabilities aren't *just* in the general investment account. Companies that sell par whole life are run very differently than companies that sell primarily IUL, and the risks in each company (and thus for each policyholder) are very different.

________

**Why go to the trouble of hedging if you don't expect to earn a premium over what you would have simply credited in interest?

_______

Again, whole life doesn't merely credit excess interest from bonds. The dividend scale is a 3-factor model at most (probably all) mutual insurers. Aside from that, policyholders hedge in an IUL because they want to speculate (or maybe because their agent told them they would earn more money in an IUL). 

_______

I have analyzed the numbers and IUL DO earn a premium over the debt market rate of return as expressed by the Moody's Corporate Bond Yield. You should understand that Insurance companies have an incentive for the cash value to earn as great a return as possible as safely as possible. The faster your cash value grows in a policy, the faster the risk is driven out of the policy. The risk is the difference between the death benefit and the cash value. That is the amount for which the insurance company is on the hook.

________

Analyzed which numbers? You're saying index options earn a premium over bonds? Can you point to any research showing that buying index call options at the ratio that insurers do for IULs will yield the type of projected returns in these illustrations? Or that it is a profitable strategy? There are investment guys who do structured investments for a living, which is essentially the same thing as an IUL, minus the insurance policy wrapper. Do you know what the expected long-term return on these strategies are?

As for insurance company motives, the only thing they care about is the guarantees because that's all they're on the hook for. They don't really care what the call options earn because it's not being held on their books. When they account for the risk of these policies, they're not speculating about NAR reduction due to index or dividend credits 20 or 30 years from now. The safest way to reduce NAR for them is to keep collecting premium and making sure the cash flows specified in the guaranteed rate matches the liabilities they're on the hook for. The rest is a sales story. Reducing the NAR is a huge benefit to the policyholder, however. So from the policyholder's perspective, yeah they want the cost of insurance to go away as fast as possible.

_____

While the interest-crediting may be variable (subject to cap and floor and performance of the underlying index), it will, on an annualized basis, earn a premium over the debt market return that a Whole Life and a Universal Life capture. **

_____

How do you know it will earn a premium over whole life? Where are the studies to show this? The cap and par rates in IUL are dropping because the options are becoming more expensive and insurers are trying to think up ways to increase the options budget. Market pressures are also forcing insurers to take more risks, and push more risk onto policyholders (e.g. using charge-funded multipliers and higher internal charges for bonuses and proprietary indices). The performance of the underlying index doesn't exactly correlate to the profits earned on these call options that power IUL, either. Investing in call options isn't the same thing as buying an index fund, for example.

_____

**Yes. Its easy to do your own analysis by looking at the Moody's Corporate Bond Yield, which is a good proxy for what the insurance company is earning. Historical market performance and Caps are available. Typically you'll find >2% premium for the cash value in an IUL.**

_____

That's not a study. I mean an academic study or some kind (any kind) of controlled study that carefully analyzes the variables involved in this sort of approach. Historical returns are not predictive, and not a great way to analyze future returns. Look-backs are taking advantage of a bond market that used to earn 8%-10% yields. Where is that in today's bond market? The same is true of look-backs in equities. A 100-year, 50 year, and 20-year look-back produce very different results, and more data doesn't mean more accurate predictions. The economy of 1900, and the drivers of growth back then, are very (very) different from the drivers of growth today. That market existed in essentially a different world. That data is near useless for future predictions. 

If you're using historicals to suggest an equity premium going forward, I'm not convinced that's valid. 

What matters is what is happening *today* in these markets, and the risks being taken today.

_____

**I've only heard that such a thing exists. I've never confirmed.**

_____

I think this gets to the heart of my original question. It doesn't sound like you have any first-hand knowledge that these will in fact perform better than other types of life insurance. What's your confidence level on this? Could you take your conclusions in front of an ethics board or compliance officer and state these as hard facts?

Companies that sell par whole life are run very differently than companies that sell primarily IUL, and the risks in each company (and thus for each policyholder) are very different.

This is your opinion. What is this based on? Its the same companies. Name one company that sells IUL that doesn't also sell Whole Life.

Again, whole life doesn't merely credit excess interest from bonds. The dividend scale is a 3-factor model at most (probably all) mutual insurers. Aside from that, policyholders hedge in an IUL because they want to speculate (or maybe because their agent told them they would earn more money in an IUL).

I don't think you truly understand what is going on under the hood. You can't speak for all policy owners. 

As for insurance company motives, the only thing they care about is the guarantees because that's all they're on the hook for. They don't really care what the call options earn because it's not being held on their books. When they account for the risk of these policies, they're not speculating about NAR reduction due to index or dividend credits 20 or 30 years from now. The safest way to reduce NAR for them is to keep collecting premium and making sure the cash flows specified in the guaranteed rate matches the liabilities they're on the hook for. The rest is a sales story. Reducing the NAR is a huge benefit to the policyholder, however. So from the policyholder's perspective, yeah they want the cost of insurance to go away as fast as possible.

How do you know what insurance company motives are? This is merely your assumption.

If you are not convinced that the hedging will work, then you don't have to buy an IUL. Its that easy. I think it does.

[David Lewis]

This is your opinion. What is this based on? Its the same companies. Name one company that sells IUL that doesn't also sell Whole Life.

_____

It's based on my experience working with these companies, and also looking at how they manage their GIA, what their strengths are, and how they position their product line. Also, I want to stress *different*. That doesn't necessarily mean "worse", although it potentially could mean that. It's a fact that NML is not run like AIG, neither of which are run like Ohio National. For anyone who has had any experience with any of these these companies, this is blatantly obvious.

To answer your second, somewhat irrelevant, question about who sells IUL that also doesn't sell whole life, that's easy. F&G Life. Also John Hancock. Also AXA/Equitable. Symetra. Lincoln. I mean... there's lots of them. And all those are major players in the IUL space. A better question would be "what are the differences between companies that put par whole life (not just whole life) front and center in their product line versus companies that put IUL front and center?"

This isn't a matter of opinion. There are objective differences in how these companies run, just as there are objective differences in how mutuals are run versus stock companies.

___

I don't think you truly understand what is going on under the hood.

___

I think it's the opposite. You are using equity markets as the proxy for IUL. 

The reality is insurers are collecting a premium, establishing an options budget, buying index options from investment banks, and hedging those options with bonds. Then, insurance agents are selling policyholders a false promise that it works just like an equity index, but with caps and par rates, which is not really how it works. The future returns on these policies are premised on the idea that index options can (at least in the current product iterations) achieve long term net profits of between 30% and 50%, forever. The last decade was ideal for this type of story because of the amount of capital insurers had, the portfolio rates they had (they still had a bunch of old bonds goosing their portfolio), and the options costs (which were much lower than they are today).

The next iteration of IUL is going to look very different, because all the past advantages are gone. And, because of that, it will perform differently than in the past. This isn't my opinion. This is based on the fact of currently rising cost of options, and the new money rates that insurers are being forced to roll over into.

_____

How do you know what insurance company motives are? This is merely your assumption.

_____

This is not my assumption. Read any policy contract. The insurer tells you exactly what their primary concern is. It is providing the guarantees of the policy. Excess return is not guaranteed. Insurers cannot speculate on NAR reductions due to non-guaranteed returns. And, in a UL policy, they're not going to speculate. They don't have to. The risk has been pushed off onto the policyholder and to investment banks.

You still haven't answered my other questions, so I assume you don't have an answer.