San Antonio, Texas
Equity indexed universal life insurance is starting to show some significant development activity, according to Tim Pfeifer, principal and consulting actuary at Milliman, Chicago.
Like their equity index annuity counterparts, EIULs have a minimum interest guarantee but also credit interest by linking gains to growth in an equity index.
“In the last 6 months,” Pfeifer said, “we’ve been getting more questions about this type of product.”
EIUL sales reached around $150 million in 2004, Pfeifer noted. “That’s not a lot, but it could easily double with the entry of new players,” he said. Flat equity markets and weak interest rates should spur growth, too, he predicted here at the life insurance conference sponsored by LIMRA International, LOMA, Society of Actuaries and American Council of Life Insurers.
The recent EIUL activity is coming in wake of the success EIAs have had in recent years, he said. Other EIUL drivers include their potential for upside accumulation plus the attribute of having floor guarantees–factors widely seen as helping spur the sales growth of EIAs.