Anticipating Regulatory Changes The upgrade from the older Choice product to the new Advantage IUL product was driven by Andrew Martin’s life insurance product development team, based on the competitive environment and with anticipated changes in the life insurance illustration regulatory environment in mind. The National Association of Insurance Commissioners (NAIC) has adopted new rules that will cap the IUL crediting rates on illustrations at a lower rate than today’s rates. Says David M. Hansen, Regional Director, Great Lakes Region: “The NAIC has never before addressed the issue of maximum crediting rates and indexed loan rates in IUL illustrations. They are doing this to simplify illustrations to the consumer and make them more conservative and comparable. Our product development team anticipated this change and moved quickly to turn it to Penn Mutual’s competitive advantage.” Jim and David serve on a Life Product Tri-Council Committee that provided feedback to Andrew’s team. Says Jim: “Our committee brings together producers and field managers from both the career and independent channels. Based on our input, Penn Mutual made several changes in the new IUL product, as originally proposed by Andrew’s team. The team then accepted our advice on what features would be presentable to our clients, and this increased our comfort about what we are selling. It’s rare for a life insurance company to include producers and field managers in new product development, to this extent.”
Built on a Proven Chassis Andrew emphasizes that the Choice IUL product was very competitive and successful, and none of its features and benefits have been lost in Advantage IUL. “We still offer a choice among the same four Indexed Accounts, including a
High Participation 1 Year S&P 500 Indexed Account, a 1 Year S&P Global BMI Indexed Account and a 5 & 1 Blend S&P 500 Indexed Account, and also a Fixed Account. We also offer the longest no-lapse guarantee on accumulation IUL products in the industry, up to 30 years, at no extra cost. Although the product enhancements may seem minor at first glance, they will make a big impact on how our IUL product looks competitively.”
Best IUL Sales Ideas David’s best IUL sales idea is to focus on clients who “understand and appreciate the features of this product and want to put in as much premium as they can, to build cash value. The PVE will help to build cash value faster, after it kicks in. Penn Mutual charges the cost of insurance based on the net amount at risk. So, as cash values grow, the number of units we charge for insurance goes down, likely reducing overall costs later in life.” For clients concerned about recent stock market volatility, Jim suggests using the dollar cost averaging feature to spread allocations to the indexed accounts over 12 monthly increments. “Money goes into the 12 Month Dollar Cost Averaging (DCA) fixed account and the balance is guaranteed by Penn Mutual to earn 4% (currently). The policyholder also avoids putting all premiums into a market-linked Indexed Account near its highest point during the year.” You can learn more about Accumulation Builder Advantage Indexed Universal Life (IUL), including a comprehensive product FAQ, on Producers Place at: Products & Investment Information > Insurance.
*The number of no-lapse years will vary based on the age of the insured at issue.
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All guarantees are based on the claims paying ability of the issuer. Accumulation Builder AdvantageSM Indexed Universal Life is an indexed universal life insurance policy offered by The Penn Mutual Life Insurance Company. Product or features may not be available in all states. Policy form numbers ICC12-IFL and IFL-12. (Policy form numbers may vary by state.).