Indexed universal life was usually sold on a projection. The illustration showed an account value climbing at an assumed index crediting rate, premiums stopping at some future point, and the policy carrying itself for life. Years later, many Midland National IUL owners open an annual statement that looks nothing like that projection and cannot work out why. The short answer is that the illustrated rate was an assumption, not a promise, and several levers inside the contract, the cap, the participation rate, the spread, and the cost of insurance, are set by the carrier and can move.
This page is about reading your actual policy rather than the sales illustration, and about what your realistic options are if the numbers no longer work. Pine Lake Life Solutions is not affiliated with, endorsed by, or connected to Midland National Life Insurance Company or Sammons Financial Group. Pine Lake does not purchase policies. What is offered is a free, no-obligation policy review that compares keeping the policy, reducing it, surrendering it, and testing the secondary market side by side.
In This Article
- Illustrated Rate vs. Actual Credited Rate
- Caps and Participation Rates Are Not Locked In
- How to Read Your Annual Statement Against the Original Illustration
- Who Services Midland National IUL Policies Today
- Your Options When an IUL Stops Working
- Closing a Transaction: The Ownership Change
- Frequently Asked Questions
Illustrated Rate vs. Actual Credited Rate
Start with the gap, because it explains almost everything else. An IUL illustration projects growth using an assumed rate derived from a hypothetical index history. The actual crediting your policy receives is determined each segment period by the index movement over that period, then filtered through the crediting method and the carrier’s current parameters.
Even in a year when the index rises meaningfully, your credited rate can be far lower than the illustrated rate. A cap limits the maximum credited in a period regardless of how far the index moved. A participation rate credits only a stated percentage of the index gain. A spread or asset charge subtracts a fixed amount from the index return before crediting. And in a period when the index is flat or negative, the floor generally protects you from a negative credit, but zero credit still means the monthly deductions come straight out of the account value.
String several low-credit years together and the account value never reaches the level the illustration assumed. Because the illustration also assumed those higher balances would carry future charges, the shortfall compounds. This is the mechanism behind the letter telling you additional premium is required on a policy that was supposed to be self-supporting.
Caps and Participation Rates Are Not Locked In
Most IUL contracts guarantee a minimum cap and a minimum participation rate, and those guaranteed minimums are usually far below the rates in effect when the policy was issued. The current cap and current participation rate are declared by the carrier and can be lowered, subject only to the contractual minimum.
The practical result is that an IUL issued during a period of higher caps can quietly become a much weaker product over time without anything about the contract being breached. Nothing improper has occurred; the flexibility was always in the policy language. But an owner comparing today’s statement to a fifteen-year-old illustration is comparing two different sets of assumptions.
Ask Midland National for the current cap, current participation rate, and any spread for each index account, together with the guaranteed minimums for each, plus the guaranteed maximum cost of insurance rates. Those numbers define the worst case the contract permits, and that is what a settlement buyer will model.
How to Read Your Annual Statement Against the Original Illustration
Put the two documents next to each other and work through four lines. First, find the account value on the statement and locate the projected account value for the same policy year on the illustration. The difference is your cumulative shortfall. Second, add up the actual premiums you have paid and compare them to the premiums the illustration assumed; owners often find they paid exactly as planned, which rules out underfunding as the cause. Third, find the total monthly deductions taken during the year, which is the cost of insurance plus policy and rider charges. Fourth, find the interest or index credit applied for the year.
If deductions exceeded credits, the policy lost ground that year regardless of what the index did. Repeat that for three or four years and you will see the trajectory clearly.
Then request a current in-force illustration run at current charges and current credited rates with no additional premium, and a second one at guaranteed charges and guaranteed minimum crediting. The first shows the likely path; the second shows the contractual floor. The year the account value reaches zero in each is the number that should drive your decision.
| Contract lever | Who sets it | Effect on your account value |
|---|---|---|
| Index cap | Carrier, subject to a contractual minimum | Limits credit in a strong index year |
| Participation rate | Carrier, subject to a contractual minimum | Credits only a stated share of the index gain |
| Spread or asset charge | Carrier | Subtracted before crediting |
| Floor | Contract | Protects against negative credit, but zero credit still leaves deductions unpaid |
| Cost of insurance | Carrier, up to a guaranteed maximum | Rises with attained age and net amount at risk |
Who Services Midland National IUL Policies Today
Owners frequently ask whether an indexed policy has been sold to another company or moved to a runoff administrator, since that has happened across much of the industry. With Midland National it has not.
The company was incorporated on August 30, 1906 as The Dakota Mutual Life Insurance Company under South Dakota law and adopted the Midland National name in 1925. Reserve Life Insurance Company, controlled by Charles Sammons, acquired majority ownership in 1958, and an employee stock ownership plan was established in 1978. Effective July 1, 1999 the company redomesticated from South Dakota to Iowa and is regulated by the Iowa Insurance Division under NAIC company code 66044.
Midland National is not in runoff and continues to issue new individual life insurance and annuities as a member company of Sammons Financial Group in 2026. AM Best affirmed a Financial Strength Rating of A+ (Superior) and Long-Term Issuer Credit Rating of aa- on August 13, 2025 with a stable outlook. S&P affirmed A+ (Strong) on May 15, 2025 and Fitch assigned A+ stable on June 17, 2025. Ratings are opinions about claims-paying ability only and can change.
Your Options When an IUL Stops Working
There are five realistic paths. You can increase premium to the level the current in-force illustration requires, which is often a large jump. You can reduce the face amount, which lowers the net amount at risk and therefore the cost of insurance deductions. You can reallocate among index accounts or into the fixed account, which changes the crediting profile but not the charges. You can surrender for cash value, remembering that surrender charges may still apply and that a loan reduces the net. Or you can explore a life settlement, in which a licensed buyer purchases the policy for a lump sum and assumes all future premiums.
Indexed universal life is a common candidate in the secondary market for the same reason traditional universal life is: the alternative is often a lapse that returns nothing. Buyers weigh the insured’s life expectancy against the projected cost of keeping the policy in force, so a contract with high guaranteed charges is worth less. Eligibility and value are never guaranteed and many submissions receive no offer.
A free policy review puts the surrender figure, the reduced-face premium, and any offers on one page. Pine Lake does not purchase policies and does not give legal, tax, or investment advice.
Closing a Transaction: The Ownership Change
If you decide to sell, the transaction finishes at the carrier. Midland National must record the change of ownership, and where applicable an absolute assignment, on its own books, and escrowed funds are typically released only after that recording is confirmed in writing.
Request the current forms from Midland National rather than from a third-party document site, since superseded versions are routinely rejected. If a trust owns the policy, or the policy is moving to or from a trust, Midland National also requires a Certification of Trust Agreement upon a change of ownership of an existing policy to or from a trust, and upon a change of trustee.
Midland National’s life insurance policyholder line is 800-923-3223, or 712-847-1334 internationally, Monday through Thursday 7:30 a.m. to 5:00 p.m. and Friday 7:30 a.m. to 12:30 p.m. Central time. Correspondence goes to One Sammons Plaza, Sioux Falls, SD 57193. Confirm these details with the carrier.
Frequently Asked Questions
Why is my IUL account value so much lower than the original illustration showed?
The illustrated rate was an assumption, not a guarantee. Actual crediting is filtered through the current cap, participation rate, and any spread, and in flat or negative index years the credit can be zero while monthly deductions continue. Over several years the shortfall compounds, which is why a policy sold as self-supporting can later require additional premium.
Can Midland National lower my cap or participation rate?
Current caps and participation rates are declared by the carrier and can be adjusted, subject to the guaranteed minimums stated in your contract. Those guaranteed minimums are typically far below the rates in effect at issue. Ask the carrier for the current and guaranteed minimum figures for each index account in your policy so you can see the range.
Which document should I request before deciding anything?
A current in-force illustration, run twice. Once at current charges and current credited rates with no additional premium, and once at guaranteed maximum charges and guaranteed minimum crediting. The year the account value reaches zero in each scenario is the single most useful number for deciding whether to fund, reduce, surrender, or sell.
Do life settlement buyers purchase indexed universal life policies?
Indexed universal life is regularly evaluated in the secondary market, because for many owners the alternative is a lapse that returns nothing. Buyers model the insured’s life expectancy against the projected cost of carrying the policy, so contracts with high guaranteed charges are worth less to them. No offer, eligibility, or value can be guaranteed in advance.
Does Pine Lake buy policies or charge for a review?
No to both. Pine Lake Life Solutions does not purchase policies and is not affiliated with or endorsed by Midland National. The policy review is free and carries no obligation. Nothing on this page is legal, tax, or investment advice, and any transaction should be discussed with your own qualified advisors.
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Related Reading
- Sell My Midland National Universal Life Policy
- Sell My Midland National Guaranteed Universal Policy
- Sell My Midland National Whole Life Policy
- How To Read In Force Illustration
- How Long Policy Survive Without Premiums
- Evaluating Life Settlement Offer
- Life Settlement Vs 1035 Exchange
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.