Spread Rate, also known as Asset Fee or Margin, refers to the percentage difference between the return on the index linked to the policy and the interest credited to the policy's cash value. Insurance companies use the spread rate as a means to cover their costs and ensure profitability.
Spread Rate, also known as Asset Fee or Margin, refers to the percentage difference between the return on the index linked to the policy and the interest credited to the policy's cash value. Insurance companies use the spread rate as a means to cover their costs and ensure profitability.
For instance, if an IUL policy has a spread rate of 2% and the linked index experiences a 10% growth, the policyholder's cash value would be credited with an 8% return (10% - 2%). This spread rate is one of the factors that can affect the overall growth of the cash value within an IUL policy. It is important for policyholders to understand how the spread rate is applied, as it can impact the potential accumulation of savings within the policy.
Spread Rate, also known as Asset Fee or Margin, refers to the percentage difference between the return on the index linked to the policy and the interest credited to the policy's cash value. Insurance companies use the spread rate as a means to cover their costs and ensure profitability.
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