IUL the Life Insurance Star of 2017 Sales

The indexed universal life (IUL) insurance line was the star of the life insurance show in 2017, thrust into the spotlight by a supporting cast of new products and features.

Sales as measured by annualized premium rose 7 percent in the first nine months of the year compared to the first nine months of 2016, according to LIMRA data.

IUL sales grew faster than overall life insurance new annualized premium, which was up 2 percent in the first nine months compared to the 2016, LIMRA reported.

Overall, low interest rates continue to drag down overall life insurance sales, insurance company executives said.

IUL Performance Multipliers, Bonuses

The introduction of performance multipliers and bonuses helped rev up IUL sales, said Sheryl J. Moore, president and CEO of Moore Market Intelligence and Wink Inc., publisher of Wink’s Sales & Market Report.

Multipliers and bonus features credit a “non-guaranteed enhancement” to the IUL policy after several years, based on the amount of interest earned on the policy, she said.

Because the multipliers and bonuses have no impact on the illustrated rates on an IUL, insurers and agents can show “enhanced values on the non-guaranteed portion of the life insurance illustration, while avoiding the limitations imposed by AG 49,” Moore explained.

AG 49, or Actuarial Guideline 49, was introduced in the summer of 2015 to tamp down on overly rosy return illustrations in IUL products.

IUL sales cooled last year as insurers and agents adjusted to the new regulatory regime before heating up again this year.

IUL Product Introductions

IUL products offers crediting strategies and benefits that are more attractive than ordinary fixed-rate products. In a year when the S&P 500 index is headed for gains north of 20 percent, insurers were quick to respond.

Among the insurers with new IUL products this year:

Penn Mutual launched Survivorship Plus Select IUL, a second-to-die survivorship life insurance product.

Global Atlantic launched Lifetime Builder Elite IUL, which offers an “industry-first” type of loan option, according to a company press release.

Symetra Life Insurance issued Symetra Accumulator IUL and Ohio National introduced a “low-expense” Virtus IUL policy.

John Hancock launched a new IUL product that covers a single person and survivorship, or two people. The IUL products are linked to John Hancock’s Vitality program that rewards healthy habits with savings on premiums.

In the variable universal life (VUL) line, which saw annualized premium fall 2 percent in the first nine months of the year compared with 2016, Nationwide introduced two new products.

Nationwide VUL Accumulator and Nationwide VUL Protector both offer a long-term care rider and as many as 70 investment options, the company said.

Other Innovations

Other life insurance innovations were worthy of note this year as insurers continue to link benefits life insurance and long-term care.

In August, New York Life introduced Asset Flex, a universal life insurance policy that allows acceleration of life insurance for long-term care services along with a money-back guarantee.

Americo Financial Life and Annuity Insurance Company earlier this month introduced a single-premium long-term care insurance (LTCI) policy, according to news reports.

The policy is aimed at people who already need long-term care services and provides a monthly cash indemnity benefit.

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.