The current market leaders could run into some challengers.
By Cyril Tuohy
Pruco Life Insurance and Genworth Financial have announced new universal life (UL) insurance products which include no-lapse guarantees and choices among crediting options.
Pruco, a subsidiary of Prudential Financial, said its new PruLife Founders Plus UL, offers a death benefit with a no-lapse guarantee, a choice between two interest crediting options for the cash value portion, and a benefit rider that advances 100 percent of the death benefit to pay for a chronic or terminal illness.
No-lapse guarantees mean that the policy remains in-force even if the cash value portion drops to zero.
“The combination of features available in this product can give consumers access to benefit to address chronic illness costs, estate planning and business succession activities,” said Mark Hug, executive vice president of product and marketing with Prudential Individual Life Insurance.
Founders Plus UL has two account options to help the cash portion grow, Pruco said. A fixed account offers a guaranteed minimum interest rate. A “plus account” offers basic interest in addition to interest tied to the performance of the Standard & Poor’s 500 index.
With people living longer, the extended no-lapse guarantee is designed as a living benefit for people in their late 80s or older, Prudential said.
Genworth said it has launched its second index universal life product, this one branded as Foundation Builder Index UL.
Foundation Builder Index UL, too, offers a no-lapse guarantee, and for up to 30 years. Policyholders can choose among up to five index interest-crediting strategies linked to a percentage change in the Standard & Poor’s 500 index, the company said.
Even with a decline in the index, policyholders will not lose money “solely on the percentage change in the S&P 500 Index,” Genworth said in a news release.
“With low-interest rates jeopardizing the performance expected from traditional fixed life insurance products, index UL insurance meets the needs of consumers who are seeing solid alternatives with limited risk,” said Anthony Vossenberg, Genworth’s senior vice president of distribution.
For policyholders willing to pay more, Foundation Builder offers a long-term care benefit rider, the company also said.
The latest product developments from Prudential and Genworth are part of the industry’s efforts at making their products more flexible and attractive, adding options for policyholders while they are still alive, beyond the death benefit.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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