If a life insurance carrier earns a 4% return on their general account but illustrates a 6% crediting rate in their Indexed Universal Life (IUL) index allocations, they are effectively projecting a 50% annual profit on their options purchasing.

This is obviously a fantasy and does not represent how the indexing features of the policy actually work.

To make matters worse, many people have been convinced to use “premium financing” — to borrow money — to buy an IUL on the basis of this tremendous arbitrage return.

I’m happy to evaluate situations where people purchased policies relying on misrepresentations as to how the policy works. Litigation might be appropriate.