Can You Keep All the AG49-A Changes Straight?

It’s been happening for a while now. Carriers have been designing products to get around the original AG49 illustration regulations introduced in 2015. Competitors developed all kinds of complex features just to allow their IUL products to illustrate better on paper. You’ve probably heard it referred to as ‘the illustration wars’.

The problem is: clients didn’t understand what they were buying and there’s a good chance many of these policies won’t live up to their illustrated performance. And, these complex features also came with increased charges.

So, if these products aren’t client-friendly, why are they still being sold? Simple. Because they looked good on paper, which made them easier for agents to sell.

Now, here we are in 2020, and the revisions to the AG49 regulation (known as AG49-A) have been finalized. AG49-A’s goal was to stop ‘the illustration wars’, to bring consistency to IUL crediting methods and to reduce confusion for potential buyers. The most significant AG49-A impact is that companies who used bonuses, multipliers, high cap accounts and other gimmicks (just to make their products perform better on a hypothetical illustration) will no longer be able to illustrate higher performance than products without these options.

What does the AF49-A regulation change on United of Omaha’s IUL products?
Nothing. It means we are going to have absolutely no product changes. That’s because in the end, the regulators agreed with our long-standing IUL philosophy and our commitment to developing simple, client-friendly IUL products. The only minor change you will notice on our IUL illustrations as a result of AG49-A is: Effective November 19, 2020, our allowable illustrated Indexed Loan Spread will be reduced from 1.00% to 0.50%. That’s it! Nothing is changing on our product’s competitive loan provisions, it’s only the illustrated indexed loan spread that is changing.

We are proud to continue offering products your clients can understand, and that can help them achieve their financial goals.

What does the AF49-A regulation change on our competitors’ IUL products?
It’s hard to tell. We know there are carriers who are going to be looking for new ways to get around the AG49-A regulation (we know proprietary indexes will be a part of the ‘new game’, but we’re certain we’ll see even more attempts at actuarial creativity).

Choosing a product based how the carrier can manipulate their illustration to perform better might be appealing, but it could be detrimental to our industry in the long run. We challenge you to do what is best for your clients, and to do what is best for our industry. We need to get back to selling IULs based on what they were designed to do – provide customers with a high-quality financial product that provides upside potential and downside protection, without unnecessary complexity and higher costs.
For more information on our low-cost, client-friendly Income Advantage IUL, Life Protection Advantage IUL and IUL Express products, go to

Can You Keep All the AG49-A Changes Straight?