As a company that can trace its heritage to the early days of IUL, we’ve been at the forefront of product design and evolution from the start. Today, the portion of the marketplace focusing on guaranteed death benefits is undergoing a shift toward providing more options and flexibility for policy owners.
Some background will be helpful. The early days of IUL saw products that could best be described as “current assumption,” which provided a death benefit that was guaranteed as long as there was sufficient cash value in the policy. Indexed crediting strategies were basic, with annual point-to-point using the S&P 500® Index as the primary offering. The mid-2000s witnessed a proliferation of “no-lapse guarantee” products that provided a guaranteed death benefit to age 121 as long as a minimum no-lapse premium was paid. In exchange for this guaranteed death benefit to age 121, policy owners sacrificed cash value growth and flexibility. Both current assumption and no-lapse guarantee products filled a need in the market. Unfortunately, over time, both have revealed shortcomings in addressing all the needs of policyholders. A current assumption IUL may not provide the duration of death benefit guarantee that the client needs and is willing to pay for, and a no-lapse guarantee IUL might lack the flexibility and options the client wants.
Therein lies the opportunity. Combining the best features of both products into a simple, affordable and secure indexed universal life insurance policy that is truly client/policy owner-centric is what consumers need.
Global Atlantic’s new Lifetime Foundation ELITE IUL may offer the solution your clients are looking for. It provides a simple and straightforward IUL to bridge the gap between flexibility and options on the one hand and strong death benefit guarantees on the other — because now you can do both.
Lifetime Foundation ELITE extends death benefit guarantees beyond most life expectancy IUL products on the market by providing a death benefit guarantee to the earlier of age 90 or 40 years,* based on risk class. By extending the death benefit guarantee to age 90, the risk of outliving the guarantee can be diminished significantly. This alleviates a concern that is often associated with current assumption IULs.
How many clients truly believe they will be in a situation, financially, to pay premiums to age 121? Even if they can, do they still want to allocate dollars to fund a life insurance policy that they purchased decades ago?
Lifetime Foundation ELITE also addresses one of the challenges faced with no-lapse guarantee IULs — the risk of mortality drag. Many no-lapse guarantee products are illustrated on a pay-to-121 basis. How many clients truly believe they will be in a situation, financially, to pay premiums to age 121? Even if they can, do they still want to allocate dollars to fund a life insurance policy that they purchased decades ago? Unfortunately, most no-lapse guarantee products were not designed to accumulate cash value in the later years. Therefore, options are limited — stop paying premiums, or adjust the policy if the client still wants to maintain the coverage.
Lifetime Foundation ELITE solves this problem by eliminating mortality charges after age 90** on a current nonguaranteed basis. This design alleviates policy owners’ risk that increasing mortality charges will impact their ability to sustain coverage.
The market for death benefit-focused IUL products is constantly evolving. Products that offer flexibility and guarantees will provide opportunities for carriers to open the door to new sales. •
For more information, please visit www.GlobalAtlanticLife.com/Latest.
* Guarantee periods vary by age and underwriting class.
** For issue ages up to age 75.
Product and riders availability vary by state.
Lifetime Foundation Elite is issued by and all policy benefits are the responsibility of Accordia Life and Annuity Company, 215 10th Street, Des Moines, Iowa. Accordia Life is a subsidiary of Global Atlantic Financial Group Limited. Policy forms ICC17-IULC-C18, IULC-C18. Endorsement forms ICC17-IULPTP-K17, IULPTP-K17, ICC17-IULMCS-K17, IULMCS-K17, ICC17-IULFLX-K17, IULFLX-K17 and ICC16-LCCABR2-I16 or LCCABR2-I16, ICC13-LTABR-E14 or LTABR-E14, ULWFL-E14.
Global Atlantic Financial Group (Global Atlantic) is the marketing name for Global Atlantic Financial Group Limited and its subsidiaries, including Accordia Life and Annuity Company and Forethought Life Insurance Company. Each subsidiary is responsible for its own financial and contractual obligations.