Why guaranteed lifetime withdrawal benefit election rates continue to rise.
By Cyril Tuohy
Securian Financial Group has introduced a new variable universal life (VUL) policy with subaccounts that allow policyholders to invest in stocks. The policy also offers to pay death benefits in installments, and provides a guaranteed lifetime benefit.
The new product, which is branded as Premier VUL, is the first variable life product introduced by the company in six years, according to Securian, a distributor of the Minnesota Life Insurance Co. It was developed with the feedback of advisors.
“Our advisors asked us for a product that appeals to a broader range of clients and we gave it to them,” Bob Ehren, senior vice president of life product manufacturing with the Securian Financial Group, said in a statement.
Premier VUL “adjusts to clients’ needs,” the company said. The subaccounts allow some policyholders to invest in stocks in search of higher returns. Other clients with a different focus – a shorter time horizon, for instance -- can invest in indexed products.
The income protection rider pays all or a portion of the death benefits in installments for up to 30 years instead of as a lump sum. A separate income protection agreement provides a guaranteed lifetime benefit, the company also said.
VUL is a form of cash-value life insurance that offers a death benefit and an investment feature. Because the cash value is invested in stocks or bonds and has risk, it is variable and sold as a security.
In a separate announcement, Securian also announced the launch of a simplified issue whole life (WL) policy in conjunction with Upromise, a website run by Sallie Mae, the loan originating and serving agency.
The WL policy is designed for children and adults. Upromise will market the product online, the company said. A simplified issue means applicants will answer few underwriting questions when they purchase coverage minimums of up to $10,000 for children and $25,000 for adults.
“Planning for the unexpected loss of a breadwinner is a factor that all families need to consider,” Bill Gould, second vice president of Securian Financial Group, said in a news release.
He also said that Securian’s partnership with Upromise will make available “an important protection” to households earning annual income of between $35,000 and $124,000, the income range of more than half of America’s households.
Many of those households either have no life insurance or don’t buy enough of it, according to surveys. Members of Upromise who buy the whole life coverage can also use it to help pay for college expenses or apply it to student loans, Securian said.
In a whole life policy, some of the premium goes toward the death benefit and some toward savings.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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