2013 Life Insurance Product Update – First Quarter

by on Apr 08, 2013

Life Insurance Product UpdateSince the last installment of our quarterly Life Insurance Product Update, three new products and two new index strategies have been introduced to the market by Life Insurance Monitor firms. The new products include one new term policy, one indexed universal policy and a variable universal policy. Here is a look at the products that have been released or updated over the last quarter:

John Hancock – Protection Indexed Universal Life
John Hancock added the Protection IUL policy to its suite of indexed universal life insurance policies in early February. Key features of the new policy include competitive IUL premiums, 13% current cap, a simple annual point-to-point crediting method, three levels of guaranteed protection (No-Lapse Guarantee, 0% floor and a 2% cumulative interest rate guarantee) and three allocation options (Capped, Uncapped and Fixed Accounts). Additionally, the product offers access to John Hancock’s Long-Term Care riders.

Lincoln Financial Group – LifeElements Level Term (2013)
Lincoln Financial Group introduced the 2013 edition of the LifeElements Level Term product suite which features a level premium guaranteed period for the choice of 12, 15, 20 or 30 years and will increase annually after the period until age 95. Additionally, the policy requires a minimum face amount of $250,000 and has the option of an accelerated benefit rider, a children’s level term insurance rider and a waiver of premium rider. The new 2013 policy is similar to the 2012 model with the exception of some minor changes in policy fees, issue ages and term classes. The new policy requires a $90 payable in all years for their 10, 15, 20 and 30 year terms and also introduced a 15-year term tobacco and non-tobacco class and a 20-year term tobacco class. Previously, the 2012 policy required a $90 payable for the 10-year term, a $60 payable for the 15 and 20-year terms and a $50 payable for the 30-year term and combined the 15-year term into one class.

Nationwide – Monthly Average and Annual Point-to-Point Index Strategies
Nationwide introduced two new index strategies for crediting interest to the pre-existing Nationwide YourLife indexed universal life insurance policy – Monthly Average and Annual Point-to-Point. The new Monthly Average strategy is appropriate Appropriate for customers that are wary of market volatility and uses the S&P 500, NASDAQ and Dow Jones Industrial Average indexes. The strategy works by tracking the index performance each month and averages the 12 numbers to determine the percentage of change within the index. The strategy blends the averages of the three indexes and ranks the performances to determine the final rate credited to the life insurance policy – 50% of the best-performing index, 30% of the second best and 20% from the third best. The new Annual Point-to-Point strategy is suitable for customers that believe the market will likely experience steady growth in the near future and uses only the S&P 500 index. The strategy works by comparing the initial and ending value during a 12-month period to determine the percentage change in an index which is then credited to the life insurance policy.

Pacific Life – Pacific Select Variable Universal Life
Pacific Life added the newest addition to its variable universal life insurance suite, Pacific Select VUL, in late February. The new policy replaces the pre-existing Pacific Select Exec V and offers clients improved Life Insurance Retirement Plan performance, streamlined charge structure, 76 variable investment options, a one-year indexed option and two fixed options. Additionally, the product offers access to multiple benefit riders including the Downside Protection Rider, Short-Term No-Lapse Guarantee Rider and the Premier Living Benefits Rider.

Pacific Life Select VUL Promotional Image
Pacific Life Pacific Select VUL Online Promotional Image

First Quarter Summary
The fourth quarter of 2012 saw the introduction of only one new life insurance product by Life Insurance Monitor firms. However, ongoing market volatility has helped to fuel the release of new and innovative permanent life insurance products over the last couple of years, and we continue to see this trend as two of the three new products to hit the market so far in 2013 are permanent policies. Since the start of 2012, nine new universal life insurance policies have been unveiled by our coverage firms alone.