Mutual of Omaha's Annual IUL Max Illustrated Rate Updated
FROM MUTUAL OF OMAHA...
Effective February 1, 2025, the IUL maximum illustrated rates in WinFlex Web will change as noted below. Please take a moment to review the increased maximum illustrated rates.
Those strategies with the largest increase were the BofA US Agility and S&P uncapped strategies, with the BofA index increasing around 20 basis points. Those strategies have performed well recently and may be worth looking at, especially if you have clients that are looking to further diversify.
Income Advantage IUL:
S&P 500 100% Participation Rate with 10% Cap: Increasing from 6.30% to 6.33%
S&P 500 140% Participation Rate with 7% Cap: Increasing from 4.84% to 4.86%
S&P 500 Uncapped with 60% Participation Rate: Max Rate Increasing from 5.46% to 5.58%
BofA US Agility Index: Uncapped with 185% Participation Rate: Increasing from 5.51% to 5.72% — an increase of 21 bps!!
Life Protection Advantage IUL:
S&P 500 100% Participation Rate with 8.5% Cap: Increasing from 5.53% to 5.56%
S&P 500 140% Participation Rate with 6% Cap: Increasing from 4.19% to 4.21%
S&P 500 Uncapped 50% Participation Rate: Max Rate Increasing from 4.47% to 4.57%
BofA US Agility Index: Uncapped with 185% Participation Rate: Increasing from 4.83% to 5.01% — an increase of 18 bps!!
IUL Express:
S&P 500 100% Participation Rate with 9.25% Cap: Increasing from 5.92% to 5.95%
S&P 500 140% Participation Rate with 6.50% Cap: Increasing from 4.52% to 4.54%
S&P 500 Uncapped with 55% Participation Rate: Max Rate Increasing from 4.95% to 5.06%
BofA US Agility Index: Uncapped with 175% Participation Rate: Increasing from 5.16% to 5.36%– an increase of 20 bps!!
Why is the max illustrated rate changing?
The original Actuarial Guideline 49 (AG49), which was introduced in September of 2015, provided insurance companies with a standardized way to calculate the maximum illustrated rate. Part of this calculation takes into account how the index has performed over a look-back period. This period averages the annual return for all possible 25-year periods from the most recent 65 calendar years. After the close of each calendar year, we recalculate the maximum illustrated rate after incorporating the most recent year. The regulation was also updated in 2023 to look at the cost to the carrier to hedge each strategy.