How to compare IUL illustrations from different carriers
Updated 2026-11-10. For licensed agents; not legal or tax advice.
A client asks why one carrier's illustration shows $1.4 million of cash value at age 85 and another shows $900,000 for the same premium. Before you answer, check whether the two illustrations were built on the same inputs. Most of the gap between two IUL illustrations usually comes from different assumptions, not from one policy being better.
1. Make the inputs match first
Line up these inputs before you look at any values. If one of them differs, either ask for a new illustration or tell the client plainly that the two are not like-for-like.
- Insured: issue age, gender and underwriting class (for example, Preferred Non-Tobacco).
- Face amount and death benefit option: a level death benefit (Option A) and an increasing one (Option B) produce very different cash values.
- Premium pattern: the annual amount and how many years it is paid. Add up the total planned premium for each illustration.
- Illustrated rate: the crediting rate each carrier used for the non-guaranteed column (see the next section).
- Income design: when distributions start, how long they last, and whether they come from withdrawals or policy loans.
2. Don't treat the illustrated rate as a forecast
Each carrier sets its own maximum illustrated rate under Actuarial Guideline 49-A, the actuarial rule that limits how IUL illustrations are built. The maximum depends on that carrier's index options, caps and participation rates, so a 6.2% illustrated rate at one company and 5.8% at another are not two predictions of the same thing. If you want to see how sensitive each design is, ask each carrier for a second illustration at the same lower rate and compare those as well.
3. Look at the guaranteed column before the non-guaranteed one
The guaranteed column assumes the maximum charges allowed by the contract and the guaranteed minimum crediting rate. The useful question is: if nothing goes better than guaranteed, how long does the coverage last with the planned premium? Compare that age across carriers before you compare non-guaranteed values.
4. Compare cash surrender value, not account value
In the early years an IUL usually carries a surrender charge. The accumulation (account) value ignores it; the cash surrender value is what the client would actually receive. Compare the cash surrender value at a few fixed points, for example policy years 10 and 20 and ages 65 and 85.
5. Read the income section with the loan terms
Illustrated income usually comes from policy loans. Check whether each illustration uses a fixed loan, an indexed or variable loan, and what loan charge and credited rate it assumes. Under AG 49-A the illustrated credited rate on a loan can exceed the loan charge by at most 0.5 percentage points, but the loan type still changes how the policy behaves when actual returns fall short of the illustration.
6. Keep the full illustrations with any comparison
A side-by-side summary is not an illustration. Under the NAIC Life Insurance Illustrations Model Regulation, which most states have adopted, a supplemental presentation has to be accompanied by the carrier's basic illustration, and it has to refer the reader there for guaranteed elements. Many carriers and IMOs also require approval before agents use comparison material with clients. Check your contracts.
How to decide which numbers to show the client
If the inputs match, show the guaranteed lapse age, cash surrender value at a few checkpoints and the income design side by side, together with each illustrated rate. If the inputs don't match and you can't get new illustrations, say which inputs differ before you show any number. This is the order Illustration Compare follows: it lists any differing inputs at the top of the report and draws guaranteed and non-guaranteed lines with the same weight.