Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
By Robert Dixon
A new insurance policy unveiled by Minnesota Life includes a unique Income Protection Agreement (IPA) that lets the policyholder decide when and how death benefits will be paid.
In a conventional life insurance scenario, beneficiaries named in the policy receive the full death benefit. How the benefit is paid is determined by the beneficiary.
Minnesota Life has introduced a new indexed universal life product, dubbed Omega Builder IUL. It includes an IPA with “a feature that allows policy owners to arrange for the death benefit to be paid as an irrevocable settlement option in a combination of installment payments and lump sum payouts,” the company said in a Feb. 20 release.
The IPA enables the policy owner to make choices about how the death benefit is distributed. It could, for example, be used to establish a steady stream of income with payments made at regular intervals to the beneficiary. “The policy owner has an opportunity to generate more cash value while he or she is alive,” Ben Roth, national sales vice president for Minnesota Life, said in the release.
“We all have heard stories about people falling into large sums of money, only to see it go up in smoke,” said Jason Konopik, chief financial officer of AMZ Financial, in the release. “The reality is that a predictable stream of income, rather than a lump sum, helps beneficiaries maintain a consistent lifestyle,” he noted.
The IPA, which must be selected when the policy is issued, allows the policy owner to create an income stream for beneficiaries that will grow at a fixed rate. Stretching the payment of a portion of the death benefit in installments over a period of years may lower the cost of insurance, so the cash value could grow faster, according to the release.
The Omega Builder IUL is distributed exclusively by AMZ. It has been approved for sale, or is pending approval, in all of the contiguous 48 states except New York.
Securian Financial Group and its affiliates provide insurance, investments and retirement plans. Securian is the holding company for Minnesota Life Insurance and Securian Life Insurance Co., a New York-admitted insurer.
AMZ Financial Insurance Services is a product development firm and a wholesaler and distributor of life insurance, annuities, long-term care insurance and Medicare supplement plans provided by more than 100 insurance companies. The company is based in El Dorado Hills, Calif.
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