EIUL Update February 23, 2016Posted by shaferfinancial in Uncategorized.
Over the last year most of my clients achieved positive results. This in light of a stock market that has gone nowhere with the S&P 500 actually slightly negative. Even more important is that with stock market watchers on edge, expecting negative results, those clients and myself who have EIULs know that whatever the market does our losses are capped at 0. For those who have retirement looking at them in the mirror this has to be a very comfortable position. For those who have decades to retirement, the good night sleep or the ability to completely ignore the noise has to be worth it.
In general, EIULs have continued to become an important alternative for thinking folks who want some protection from market forces. It again was the fastest growing financial product. During the last year, Wall Street and Whole Life forces ganged up to get the SEC to change the illustrations required. This change produces illustrations that are grossly more conservative than before. Note, the SEC didn’t force mutual fund sellers or whole life sellers to become more conservative in their marketing materials. Despite this more conservative illustration regulation, EIULS continued their popularity gain. Note that with the long term lower interest rate environment, the worse possible for life insurers, EIULs continue to preform as they were designed to do. And, the insurers that sell them continue to be financial stable. We are now starting the 3rd decade since the first EIULs were introduced, and everything the critics said would happen, hasn’t. Something that can’t be said about Mutual Funds, Variable Universal Life, Whole Life, etc. Given what has happened over the last 20 years to the economy, the fact that the stock indexes are barely above where they were 20 years ago, given that the historic returns in EIULs have dramatically outstripped mutual funds, this product has fully proved itself.
I get asked all the time why this product isn’t more well known? The answer is very simply that Wall Street + the government has created a propaganda system that is all encompassing when it comes to retirement planning. But rest assured that Wall Street and the Whole Life insurers are very cognizant of the power of EIULs for retirement income. Hence, the new illustration rules.