Full Disclosures VL And VUL Report
Follow each link below for the report:
Blease Research, in compiling the latest edition of the Full Disclosure policy analysis series, surveyed leading variable and variable universal life insurers active in upper market sales. The charts in this report are excerpted from Full Disclosures latest findings on products for sale on April 1, 2002. Insurers were allowed to submit May 1 data if a new product (or pricing changes) was released at this typically busy time for new product prospectus releases.
These excerpts of illustrated values are designed to show how companies are illustrating their products in the marketplace, and provide an overview of the specific strengths each brings to market. This report features results for 55 contracts–a new record for Full Disclosure!
While there seemed to be somewhat of a sales turnaround six months ago, new lows in equity markets over the last month will keep consumers wary. However, from our vantage point as product analysts, we see eagerness at our participating companies to get new generations of variable products on the street and to continue to refine product pricing and designs to keep abreast of ever-evolving competition.
A new trend we are seeing is the ability to handle different client objectives within a single product (maximum retirement income as opposed to low premiums, for example). It looked like the trend was going to continue of insurers issuing unique products for different objectives. Its cheaper to get one state approved, administered and rolled out in any event, but it may not make sense if multiple distribution channels are employed or there are other complications. Check out the Product Strengths section of this report for the latest product incarnations and where companies are placing design emphasis.
VL illustrated values (the majority in this report are built on a universal life chassis) are based on a Male Age 40 paying a $7,500 annual premium and a $1 million policy. If our specified premium of $7,500 is too low to illustrate the policy for this age and face amount, the policies are blended with term insurance if available. The class specified is best nonsmoker as long as the class represents at least 15% of the contract issued of each policy.
Companies were asked to employ a 10% gross crediting rate that is then net of average fund expenses. Not all companies use the same averaging method. Some use a regular arithmetic average and others weight the average according to assets allocated to the various investment options available under each policy. The death benefit type is level; however, a column is included with a true increasing death benefit for each policy.