By Cyril Tuohy
Allianz Life said it has moved further into the survivorship market with the announcement of a fixed index universal life insurance policy that provides death benefits for two lives on one policy.
The product, branded as Allianz Life Pro+ Survivor, is designed for consumers looking for affordable, flexible premium options and comes with chronic illness or terminal illness riders, the company said.
Jason Wellmann, senior vice president of life insurance sales for Allianz Life, said consumers want “affordable, customizable life insurance,” to help them accumulate assets and pass on the death benefit to help children with estate taxes or death expenses.
Survivorship policies are popular with retired couples who do not rely on each other for income. Buying a survivorship policy softens the estate-tax burden.
Insuring two people on one policy helps business owners with business continuation planning, Allianz said in a statement.
Since death benefits of a survivorship contract are not paid until the second of the two insured people dies, premiums are lower because the life expectancy for the policy is based on a longer time span.
The past few months have seen a rise in survivorship product activity among large insurance companies looking to expand into the niche.
In August, Lincoln Financial announced Lincoln Wealth Preserve, the company’s first survivorship indexed universal life policy.
In June, American International Group Inc. launched Elite Survivor Index II, a survivorship indexed universal life policy with three interest crediting options.
Last year, John Hancock introduced Protection Survivorship Indexed Universal Life, which is linked to the Standard & Poor's 500 index.
Developing new products to help policyholders shelter their wealth has taken on more urgency of late for the life insurance industry with Congress looking to lessen tax advantages from which life insurers benefit.
Despite second-quarter annualized premiums for universal life products dropping by 8 percent compared with the year-ago period, life insurers also see a long-term opportunity in developing products to protect asset transfer from taxes.
Over the next 20 years, baby boomers will benefit from the transfer of trillions of dollars’ worth of wealth from their parents. Boomers will, in turn, look to pass on some or much of their inherited and accumulated wealth to their children.
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@example.com.
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