Two new universal life policies are debuting on a current assumption chassis that automatically includes extended guarantee features.
Called Performance UL and Performance SUL, the policies are single- and joint-life contracts, respectively.
Issued in most of the United States by John Hancock Life Insurance Company, Boston, and in New York by John Hancock Life Insurance Company of New York, Valhalla, N.Y., each policy has a no-lapse guarantee that says the policy will not default even if the cash surrender value falls to zero or below.
This guarantees is provided as long as the “death benefit protection value” remains greater than zero and policy debt never exceeds the policy value, according to John Hancock, a unit of Manulife Financial Corp., Toronto.
For Performance UL, at issue ages 60 or below, the no-lapse guarantee runs for the greater of 30 years or to age 80; for issue ages 61-90, for the greater of 10 years or to age 90.
For Performance SUL, in all issue ages, the no-lapse guarantee runs for the greater of 10 years or to age 90. The maximum duration is linked to the age of the younger insured.
Various factors, such as amount and timing of premium payments, loans, and withdrawals, could potentially terminate the no-lapse guarantee, John Hancock says. Once terminated, the guarantee cannot be reinstated.
Both contracts are designed to be the lowest cost permanent life insurance products in the company’s portfolio, according to the company.
“As the price for UL products with lifetime guarantees increase in the marketplace, it’s more important than ever to look at alternatives,” says Steve Finch, president of John Hancock Life Insurance. He says the lower premiums and new extended guarantees in both products, combined with strong cash surrender values, serve as a market alternative to guaranteed UL and guaranteed SUL products.
Guaranteed product features depend on minimum premium requirements and the claims-paying ability of the issuer, the company says.