Index cap rate: this is the cap on the upside of the performance. Builder IUL® Gen. 8 Effective for Index Periods that start on/after April 16, 2018. What you should know about the cap rate changes 1. cash value accumulation in an IUL insurance policy. Caused by Option Costs . This chart is a bit different in that does not show the cap history but instead shows the average amount actually credited to their IUL’s to 32,967 policies from March 2006 to Dec. 2016, as a %. If a policy had a participation cap of 50%, only 10% would be credited to the policy. When you need death benefit protection, the right life insurance policy may also help protect against market downturns. gross gain is 6.59%. This chart also shows the avg. The maximum allowable illustrated rate for each index is the lesser of the 25-year historical average or 6.86%. Past performance is not a prediction of future results. As long as the Cap is above 11%-12% then worry about the Loan rate, not the Caps. 0.75% Guaranteed minimum interest rate 13.75% Current cap HISTORICAL INDEX LOOK-BACK PERIODS The look-back periods are for illustrative purposes only. fixed rate gain is 4.37%. Different time periods and different indexes will produce higher or lower averages, and actual credited rates will vary from year to year. AG 49 look back averages the annualized rates from 25 year rolling periods for the past 65 years of the S&P 500 index returns. On the flip side, there’s a minimum, often 0%. The avg. In PA, the current growth cap is 12% with a 1% guaranteed minimum rate. Another chart shows what the average gross gain was since 1945 (including 0% gain years) for each cap rate from 4.5% to NO Cap. IUL Design. The rate is set by the insurance company and can be anywhere from 25% to more than 100%. If the cap was 14% every year, the avg. Index Crediting Method Par Rate Cap Rate Spread Rate*Rate Max Illustrated S&P 500® PtP 100% 12.00% None 6.96% S&P 500® Mthly PtP 3.15% None 5.26% S&P 500® PtP W/Spread 100% None 4.25% 6.96% annual gross gain would have been 7.73% (with no adjustments for other factors such as bonus, etc. At the end of the index period, those values are added together to find the interest crediting rate. The avg. AG 49 is the federal regulation that was fully implemented on March 1, 2016 that mandated a uniform methodology based on the historical performance for interest rates that are shown on IUL illustrations. Therefore, you will find a direct relationship between prevailing bond yields and IUL caps. and has the potential to be credited with Excess Index Interest up to the current cap. Although IUL crediting rates are based on well-known published index funds (for example the S&P 500 Index), in most cases the IUL crediting rates vary dramatically from the actual equity returns of the underlying index fund. An IUL policy is only as good as its design. 2020 Life Insurance Recommendations As described in the text of the flowchart above, the historical average “compound” return on the S&P 500 Index with a 1 percent floor and a 13 percent cap is 7.5 percent. ). © If a policy had a cap rate of 12%, only 12% would be credited to the policy. However, if you need any assistance at all please email me I’m always here and happy to assist you. Simply put, if the index gains more than the cap rate, then you only get the increase of the cap rate. from an independent agent and broker, 22 years of experience, Highest Cap Rates:  S & P 500 Index  One-Year Point-to-Point, Uncapped    Prudential,  S&P 500® Uncapped Indexed Account,  4.00% Index Spread,  “PruLife® Index Advantage UL”, Uncapped  – 90% participation rate: Minnesota Life,  S&P 500 Low Volatility “Eclipse Accumulator IUL”, Uncapped –  50% participation rate:   United of Omaha  “Income Advantage”, Uncapped –  55% participation rate:   United of Omaha  “Life Protection Advantage”, 13.75%    Transamerica  “Transamerica Financial Foundation IUL”, 11.00%    United of  Omaha  “Income Advantage”, 11.00%    Symetra  “Symetra Accumulator IUL”, 11.00%    Accordia  “Lifetime Provider”  “Lifetime Foundation”, 10.50%    American National   “Signature Indexed Universal Life”, 10.00%   American General   “Max Accumulator+ II”    (all states, except NY), 10.00%    John Hancock “Accumulation Index UL 18”, 10.00%    Prudential  “PruLife® Index Advantage UL”, 10.00%     United of Omaha  “Life Protection Advantage”, “IUL Express”, 9.50%   American National  “Signature Performance Indexed Universal Life”, 9.50%    Principal “Indexed Universal Life Flex II”, “Indexed Universal Life Accumulation II”, 9.00%    Penn Mutual  “Accumulation Builder Select IUL”, 9.00%   Minnesota Life  “Eclipse Accumulator Indexed Universal Life”, 8.50%    Lincoln  “Lincoln WealthPreserve® 2 IUL “, “Lincoln WealthAccumulate®2 IUL”, 8.50%   Pacific Life “Pacific Discovery Xelerator IUL”  “Pacific Indexed Accumulator 6”, 8.50%    Nationwide  “Nationwide YourLife® IUL Accumulator”, “Nationwide YourLife® IUL Protector”, 8.50%   Minnesota Life  ” “Eclipse Protector II IUL”, 8.50%   American National  “”Signature Plus Indexed Universal Life”, 8.50%    Protective  “Protective Indexed Choice UL”, 8.25%   Minnesota Life  “Value Protection IUL, 7.75%   American General  “Value+ Protector II IUL” (all states, except NY), 7.50%   Nationwide  “Nationwide Indexed UL Accumulator II” ,  “Nationwide Indexed UL Protector II”, 7.50%   Pacific Life “Pacific Discovery Protector IUL”, 25.00%  Nationwide, 1-Yr High-Cap Multi-Index ” “Nationwide Indexed UL Accumulator II” ,  “Nationwide Indexed UL Protector II”, 15.00%  Transamerica  Global Index Account “Transamerica Financial Foundation IUL”, 14.00%   John Hancock,  High Capped Index Account “”Accumulation Index UL 18”, Please contact me for a free confidential quote, Sean Drummeyemail: spdrummey@gmail.comphone: (910) 328-0447, last update: 12/10/2020   Cap rates are current and accurate to the best of my knowledge; cap rates are subject to change, increase or decrease; cap rates are non-guaranteed elements of Index UL products; incomplete compilation of all available carriers and IUL products, American General: revised 12/10/20Lincoln: revised 11/16/20Nationwide: revised 10/20/20Principal: checked and revised 8/5/20Penn Mutual: revised 8/5/20Pacific Life: revised 7/22/20Minnesota Life & Securian: revised 6/11/20Transamerica: checked 3/3/20Prudential: checked 3/3/20Protective: checked 3/3/20United of Omaha: revised 3/3/20AXA: revised 1/16/20American National: revised 12/2/19Protective Life: revised 10/30/19Symetra: revised 9/17/19John Hancock: revised 4/15/19United of Omaha: revised 4/2/19, Just found out today 3/4/2019 that American National has an 11% Cap rate for its Signature Indexed Universal Life product , FYI Transamerica IUL Cap Rate is 15% on there Global IUL 100% participation as well. 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