EQUITY
Cost Expands as Asset Value Grows
Annual Cost Rate
3.00%
Current Account Value
$1,000,000
Current Annual Cost
$30,000
Cumulative Cost
$30,000
The Inverted Cost of Ownership
The equity account carries a continuing asset-based fee and modeled annual tax drag. The IUL uses the illustration-derived cost curve and automatically scales with the starting comparison amount.
INDEX UL / IUL
Annual Cost Follows the Illustration-Derived Curve
Internal Cost % of Account Value
17.03%
Illustrated Account Value
$202,164
Current Annual Cost
$34,433
Cumulative Cost
$34,433
Equity Cost Rate
3.00%
IUL Internal Cost %
17.03%
Equity Annual Cost
$30,000
IUL Annual Cost
$34,433
Equity Total Cost Through Year 1
$30,000
IUL Total Cost Through Year 1
$34,433
In the early policy years, IUL acquisition and insurance charges are high relative to the still-small account value. Move the slider forward to see the internal cost percentage fall as the policy matures.
IUL annual costs and account values are based on the 30-year illustration expense data used for this presentation model and are proportionally scaled to the selected starting comparison amount. Internal Cost % = Annual Policy Charges ÷ Account Value. The equity side assumes gross return less the selected management fee and modeled annual tax drag. This is a conceptual educational presentation, not a carrier illustration, guarantee, or tax advice.