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The Single Most Important IUL Feature You Aren’t Looking For: BLOG

August 10, 2017 by Keith Schettino

Throughout my career, I have participated in countless conversations regarding the newest and shiniest indexed universal life. With an abundance of commendable products available today, insurance carriers need to continuously develop new consumer-focused solutions. To simultaneously keep pace with consumer desire and provide the value clients expect and deserve, innovation is vital.

However, despite coming from various insurance companies, indexed universal life essentially all look and feel the same, once you determine that Product A is in line with Product B, and check the boxes on your required IUL feature checklist.

What I find most often overlooked, under emphasized, or ignored to some degree is: how does the index within that product credit earnings to the client contract?

One core benefit of an IUL, beyond providing death benefit protection, is accumulation within the contract. With accumulation comes opportunity. What is the probability that the IUL I am showing my client today will succeed? Are the index choices within my recommended IUL designed to match or exceed what the illustration shows? Is your index choice, simply stated, likely to underperform?

The product that allows me to check the boxes on my checklist credits earnings based on uncapped indexing methodology. The index engine drives the IUL. Do not overlook, under emphasize, or ignore the index engine.

As an advisor, I would stress that we should evaluate indexed universal life based on this core benefit. We all have that checklist for assessing IUL that we abide by, considering qualities like:

  • Is the carrier highly rated?
  • What are the loan provisions?
  • Are the loads, costs, and other charges competitive?
  • Does the solution offer living benefits? If so, how are they triggered?

While these are undoubtedly important features to look for when evaluating indexed universal life, the first box we should check is accumulation. All other features are secondary.



Keith Schettino has been a Life Insurance Consultant for 13 years with DMI Marketing. Every day, the goal is to provide producers with the concepts & tools demonstrating where life insurance products might solve problems for their clients. With over 22 years of experience in the Life Consultation world, Keith has built a first-class knowledge of product design, underwriting, and experience to get results for advisors and their client

Originally Posted at DMI on August 4, 2017 by Keith Schettino.

Categories: Industry Articles