Prudential Financial is pulling its UL Protector product from the market, effective July 13, and one industry analyst expects many more products to join it on the sidelines.
The problem is that ultra-low interest rates make it difficult to support guaranteed universal life designs, explained Sheryl J. Moore, president and CEO of Moore Market Intelligence and Wink.
"The reserve requirements for these products are steep, and when interest rates are dim, it can tough to maintain profitability," she said. "This is just the first domino to fall in the insurance Rube Goldberg machine. Others will suspend products if the current rate environment continues."
Prudential also plans to reintroduce its Term30 product, effective July 20, said Jamie Lorenz, manager of global communications for the insurer. Prudential had suspended applications for its 30-year term life insurance policy on April 13.
The rest of Prudential's statement reads:
Prudential remains focused on helping customers with their life insurance needs in this challenging time. We actively manage our product strategy and portfolio to address impacts of the sustained low interest rate environment and ongoing market volatility. ... Offering a broad, diversified suite of life insurance solutions is a priority, as we continue to work with our financial professionals and customers in helping them plan and achieve financial wellness.
Prudential's UL Protector product was the second best-selling life insurance product for the first quarter of 2020, per Wink’s Sales & Market Report. About half of the top 10 best-selling life products are guaranteed universal life designs, Moore said.
GUL is often viewed as a term life insurance policy where the term lasts the rest of the purchaser's life. Prudential markets its UL Protector product to consumers age 55 and older with at least $60,000 in annual income who are "interested in asset repositioning and/or leaving a
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.
© Entire contents copyright 2020 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.