Advisors Blog

Optimizing Premium Outlay

Many clients desire a life insurance policy which includes significant guarantees, however the cost to guarantee their death benefit to age 100 may be prohibitive.

Advisors may be able to design a premium funding strategy which will guarantee the death benefit to age 90 (past life expectancy) with the option to extend the death benefit to age 100 at a higher premium if needed.

This case study illustrates a scenario that provides permanent protection at the optimal cost.

Why Do So Many Foreign Nationals Want U.S. Life Insurance?

The U.S. life insurance industry enjoys a number of advantages over other countries, making it increasingly attractive to non-U.S. citizens and residents, namely high death benefit capacity, comparatively low insurance costs, well-capitalized insurers, stable currency and a robust regulatory environment. This edge has led to more U.S. life insurance companies creating formal foreign national programs in order to address the unique planning, structural and tax needs of these clients.

While foreign nationals turn to U.S. life insurance for a number of reasons, they generally do so related to five strategies:

1. Seeking large amounts of death benefit;
2. Addressing a U.S. estate tax liability;
3. Planning to immigrate to the U.S.;
4. Positioning as a desirable portfolio asset to balance against a variety of international holdings; and
5. Obtaining competitive premium financing terms.

Stress Testing

Universal Life - No Lapse Guarantee -Missed Premium

Male, Age 55, Preferred Risk Class, $1,000,000 Death Benefit.

Mortality Analysis for the Life Insurance Industry in 2021

The increase in mortality since the emergence of the Covid-19 pandemic in early 2020, which contributed to record levels of mortality for the U.S. life insurance industry, has led to a significant increase in death benefits paid for both individual life and group life insurance, which contributed to the aggregate operating losses incurred for individual life business lines in 2020, and near break-even group life operating performance. However, the negative effects from the elevated mortality in 2020, though noticeable, did not have a material negative effect on industry capitalization, solvency, or financial performance. In fact, the sharp decline in interest rates in 2020 was an even greater impact on life industry earnings (both total earnings and earnings for just the individual life insurance business line), as the worsening interest rate environment continued to put pressure on the profitability of existing blocks of guaranteed universal life insurance, as the rate guarantees for many products exceed current investment returns.

In this review we highlight the increase in mortality and its effects on the U.S. life insurance industry. As mentioned above, the higher level of U.S. population deaths is not entirely due to Covid-19; however, from the standpoint of the insurer’s financial profile a death from any cause to an insured person has the same effect.

Reposition an Old Life Insurance Policy for Income Now... or Later

Exchanging a life insurance policy for a nonqualified (NQ) annuity can result in tax-efficient retirement income. This consumer-facing flyer explains the potential benefits of exchanging an ‘underwater’ life insurance policy for retirement funding.

Increased Cap Rates and Max Illustrated Rates on IULs Effective April 16th

Effective April 16th, AIG is increasing cap and max illustrated rates of select index accounts on QoL Max Accumulator+ II and QoL Value+ Protector II. These changes make their IULs stronger despite volatile market conditions to help grow your business.

Underwriting Requirements Update

Cincinnati Life recently completed an assessment of the medical requirements that apply to all fully underwritten products. As a result, they have updated their guidelines for the medical examinations required for life insurance applications.

Key points:

• Telephone interviews are no longer required for face amounts of $3 million or lower.
• EKG’s required for fewer groups.
• Physician exams and chest x-rays no longer required.

Fixed Annuities Rate Changes Effective April 11, 2022

Effective April 11, 2022, Global Atlantic, issued by Forethought Life Insurance Company, has made the following annuity interest rate changes.

Important Process Change for Paper Application Submits

These changes will only affect those advisors that are currently using paper applications to submit business for Banner (non-NY) business.

First, LGA has developed an alternative to their traditional paper life insurance application (LIA). This new application is a fillable PDF and is now accessible in the Forms section of their Partner Dashboard.

Second, starting May 5, advisors who use either of these two options to submit business, LGA will be transferring all app information collected into their digital platform to automate processing, including LGA ordering all 3rd party (exams, APS’s, etc.) requirements. They will then email a digital application link to your client (client email addresses MUST be provided when submitting either app) asking them to review answers for accuracy and complete any missing information. This now means that advisors and their customers can take advantage of all the benefits LGA's digitall platform offers including instant decisions, reduced medical evidence, and faster cycle times.

Between now and May 5:

• Advisors that use their traditional paper LIA will follow the usual process with GA’s ordering exams.
• Advisors that use their new fillable PDF will follow the process described above!

OPTerm Rate Change Effective April 6th

On Wednesday, April 6th, Legal & General updated their OPTerm product.

More reductions, especially in the non-tobacco classes, mean more #1 pricing than any other carrier.

Changes to level period premium rates include a mix of increases and decreases, across level term periods (10, 15, 20, 25, and 30 years). Both annual and monthly rates are highly competitive.

Introducing the Advisor Tech Squad!

As part of LGA's growing commitment to you, they are pleased to introduce the Advisor Tech Squad. This team provides external tech support to agents and agencies, helping to solve technology challenges.

Benefits of the Advisor Tech Squad include:

• Fully dedicated and experienced tech support team. 
• Direct access to the team, resulting in faster resolution.
• Availability from 8 am – 8 pm EST, Mon-Fri (no weekends or holidays).

Rider Availability Changes in Washington

Effective May 16, 2022, Lincoln will once again offer Long-Term Care Rider (LTC Rider) and Lincoln Care Coverage Accelerated Benefits Rider (CCBAR) for new sales in the state of Washington.

LTC New Business Rate Refresh and Benefit Changes in California

In 2020, Mutual of Omaha began implementing new rates and benefit option changes to the MutualCare Solutions Portfolio in approved states. These changes will be implemented in California, effective April 1, 2022.

A Real-Life Solution with No Additional Underwriting Requirements

Mutual of Omaha automatically issues a Chronic Illness Rider on all Income Advantage and Lifetime Protection Advantage IULs, no additional underwriting required.

Nationwide Placement Improvement Program for VULs

With Nationwide's Placement Improvement Program, your clients who would be rated a Table C or better based on traditional company underwriting procedures may be able to receive a Standard rating on variable universal life products.

New Rates for PL Promise Term Life Insurance Effective April 18, 2022

Effective April 18, 2022, Pacific Life Insurance Company is repricing rates for PL Promise Term level premium life insurance—a product specifically designed to serve the death benefit protection needs of the broad market consumer (household incomes of $50K to $250K). Rates have been updated to be more competitive. A 60-day transition period is provided.

• Top 5 for 100% of preferred no-nicotine risk class combinations across all terms for face amounts less than $500K and ages 50 and younger.
• Top 5 for 99% of preferred no-nicotine risk class combinations across all terms for face amounts less than $500K for all ages.
• Top 5 for 94% of preferred no-nicotine risk class combinations (Preferred Best, Preferred, Select) across all terms, face amounts, ages, and genders.
• Top 2 for 100% of preferred no-nicotine risk class combinations for face amounts less than $100K. 

Pacific PremierCare Choice and Pacific PremierCare Advantage Decommissioned Effective May 2, 2022

Effective May 2, 2022, Pacific Life Insurance Company’s Pacific PremierCare suite of products will no longer be available for new sales. This includes Pacific PremierCare® Choice one-year, five-year, 10-year, and lifetime premium whole life insurance products with long-term care (LTC) benefits and Pacific PremierCare Advantage Universal Life Insurance with Long-Term Care Benefits in California.

Click below for more details.

Principal Introducing New Life Insurance Application that Delivers Benefits

Principal will be introducing a new life insurance application later this year, which will offer many benefits, including:

• An easy-to-use design. The online application is dynamic, meaning that for any given case, only questions applicable to that case are presented. And checkboxes are used, making it quicker and easier to navigate through questions.
• A single application is needed. Only one application is required regardless of product, including survivorship life (state variations may still apply).
• Parts A and B are enhanced. When the owner and insured are different for a case, both will have the chance to complete their portion of the Part A digitally. And the Part B will be the same for both life insurance and individual disability insurance, making combo cases easier.
• Supplemental forms are integrated into the application. Many supplemental forms that are standalone today have been made part of the application. When you use the online application, you’ll only be presented with forms you need to complete based on the specifics of the case.
• More applications will be received in good order. Applications completed digitally are generally more complete and lead to a smoother policy issue process for you and your clients.

Digital Health Data Expansion

For applications meeting the following age and face amount guidelines, with minor or no medical history disclosed, Principal will obtain digital health data as a routine age and face amount requirement instead of an Attending Physician Statement (APS). 

• Applicable to applications with consumer completed Part B only
• Age 69 or below
• Face amount: $10,000,000 or below
• Medical history: Minor or none

Digital health data is preferred over APS when APS is listed as one of the routine requirements.

Eliminating COVID-19 Restrictions

Effective April 1, 2022, Securian will eliminate all remaining restrictions related to the COVID-19 Participation Guidelines for all life products, including the SecureCare product line.

Term Applications for $1.5 Million and Below Will Require Digital Submission Starting May 2, 2022

Securian will require eApp or Drop Ticket application submissions for Advantage Elite Select term policies $1.5M and below starting May 2, 2022. This will ensure that your applications are submitted in good order.

Chronic Illness and Waiver of Premium Agreement Changes Starting April 29th

Effective April 29, 2022, Securian will be making some changes to the availability around these agreements:

Accelerated Death Benefit for Chronic Illness Agreement (ADB-CIA) and Waiver of Premium Agreement (WPA) are optional agreements offered on individual life insurance policies.

• ADB-CIA and WPA will no longer be available to add to inforce policies
• ADB-CIA is now approved in Florida for new Indexed Universal Life (IUL) sales (Eclipse Accumulator and Eclipse Protector II)
• New issue ages for ADB-CIA will be 25-65 (previously ages 20-80) in Florida only
• Applications received after April 28, 2022, will be subject to the new issue ages of 25-65 for ADB-CIA 

Coming Soon: Accumulator Ascent IUL

Ready for an IUL that can take your clients’ cash value accumulation potential to a higher level? Symetra's new version of Accumulator IUL, Accumulator Ascent IUL, is coming April 8, 2022!

Highlights include:

• More competitive pricing.
• New Putnam Dynamic Low Volatility Excess Return Index^™ Strategies.
• A more simplified IUL story.

Please click below to review key dates for transitioning their current Accumulator IUL product to the new Accumulator Ascent IUL.

Symetra Variable Universal Life is Now Available for High-Net-Worth Foreign Nationals

Symetra variable universal life insurance is now available with their high-net-worth foreign national market program!

New Index Cap and Participation Rates for Accumulator and Protector IUL as of April 8, 2022

Allocations to the index strategies will be credited with interest based on the performance of the selected indexes, subject to their index cap, index spread, index floor and participation rate. The index cap sets limits on the maximum potential interest earned over the index segment term while the participation rate establishes how much of the indexes’ performance you will be credited (if any). The index spread sets a minimum performance threshold above which the index must perform and credits the interest (if any) above the threshold. All strategies have an index floor to ensure that, if the selected index has negative index performance during its segment term, your index interest crediting rate will not be less than zero.

One easy process, three paths to success

With SwiftTerm’s easy online application process, there are three paths to get the term life insurance coverage you need: instant approval, accelerated underwriting and full underwriting

The process

• Your insurance professional will start the application, then you’ll get a link to finish the rest.
• As you answer the questions, we will be determining your eligibility for coverage.
• If you qualify, you can be covered in as little as 25 minutes with instant approval.
• Sometimes we need to contact you for a little more info, but we’ll make it quick with our accelerated underwriting.
• If we need to do a deeper dive into your health history, we’ll continue with full underwriting.
• Once we have the information we need, we’ll send you our offer. If you like it, you can accept electronically, pay online and your coverage starts immediately

Three potential paths

1. Instant approval (coverage in as little as 25 minutes) If you qualify, you can be issued a SwiftTerm policy on the spot.
2. Accelerated underwriting (coverage in 24-72 hours) Light underwriting is needed. We may review further and ask a few additional questions.

Full underwriting (coverage in about 30 days) A medical examination is needed. We may also request medical records.