Eying Growth, Insurers Reshape Indexed Life

First quarter sales of indexed universal life rose 12 percent to $486 million compared to the year-ago period and life insurers are wasting no time tweaking their IUL line-ups to take advantage of a fast-selling segment.

Rising interest rates help insurers boost the generosity of the benefits available with life insurance contracts and industry analysts expect more companies to join the IUL market.

IUL policies are structured either for accumulation or for protection. Recent developments in accumulation-focused IULs have come from insurers Ameritas, Lincoln and John Hancock.

Other changes to protection-focused products have come courtesy of Pacific Life and AXA.

Living benefit riders usually come as contract options and at extra cost.

Growth IUL from Ameritas

Growth IUL is new this year and will eventually succeed Excel Plus IUL, which will be phased out by December 2019 to conform with new mortality tables, said Kelly Halverson, Ameritas vice president and actuary – individual product development.

Growth IUL’s significant features include:

• A 10-year lookback guarantee of 4 percent. Credited interest will equal at least 4 percent compounded annually over the first 10 years for account values allocated to the index strategies.
• A lifetime income rider.
• An accelerated death benefit rider for chronic, critical or terminal illness with 18 qualifying triggers.
• An index credit boost of 10 percent of the index credit starting in year six.

Growth IUL joins the company’s Excel IUL and Excel Plus IUL product lineup.

Wealth Accumulate IUL from Lincoln Financial

WealthAccumulate IUL joins the company’s protection-focused WealthPreserve IUL and offers protections not often found in IUL contracts.

WealthAccumulate IUL comes with:

• An executive rider and a “Surrender Value Enhancement Endorsement,” features designed to help business owners protect employees and reposition assets to buy life insurance.
• An accelerated death benefit to help pay for chronic or terminal illness.
• Premium allocations across three index accounts.

Accumulation IUL from John Hancock

The company updated the design of its Accumulation IUL contract to deliver stronger protection against market downturns and more value, the company said.

Tweaks to Accumulation IUL include:

• A critical illness rider for financial protection in case of a heart attack, cancer or stroke.
• A rider that accelerates the death benefit to help pay for long-term care expenses.
• Through Hancock’s Vitality program, policyholders who select Accumulation IUL with Vitality can earn rewards for healthy living like walking, eating well and getting regular check-ups.
• Premium allocations across four index accounts.

XL-CV Max from Midland National

Midland National’s new XL-CV Max IUL boosts the growth of cash values with the help of interest multipliers.

The contract offers:

• An account interest multiplier boosts the interest credited by 10 percent beginning in policy year six.
• A guaranteed 1 percent interest bonus on the index account kicks in at policy year 11.
• A return of premium death benefit option.
• Accelerated underwriting, which allows qualified applicants to avoid paramedical exams.
• A maximum accelerated death benefit amount that has been raised to $2 million.

IUL Protect from AXA

In February, AXA announced that its popular IUL Protect contract would benefit from an extra interest credit feature.

Since then the Federal reserve has raised benchmark lending rates twice.

• AXA’s IUL Protect extra interest credit feature was raised from 25 to 50 basis points on June 6 in all IUL Protect accounts, the company said. The extra interest is credited on top of the index credited to the policyholder’s cash values.
• IUL Protect comes with an optional long-term care rider.
• The contract also provides for a no lapse guarantee until age 90, or for 40 years of the policy is bought before age 50.

Discovery Protector IUL from Pacific Life

Pacific Life has issued its protection-focused IUL Pacific Discovery Protector IUL after finding success last year with the accumulation-based IUL contract Pacific Discovery Xelerator IUL.
Among the features of Pacific Discovery Protector IUL are:

• An indexed interest performance factor that may raise crediting rates of the indexed account beginning in year 11.
• Flexible premium payments.
• Several living benefit riders.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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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.