Guardian launched on Tuesday a new feature that allows whole life policyholders to tie a portion of their cash value to the S&P 500 Price Return Index.
The Index Participation Feature is a no-cost rider that new policyholders can opt into that will allow them to allocate between zero and 100% of their paid-up additions’ cash value to be linked to the index performance. Dividends on those additions will be adjusted based on the performance with a 4% guaranteed floor and up to 12.5%.
The new rider is the result of about a year-long effort from Guardian to offer a product that combines features of indexed universal life insurance with whole life.
“Index universal life is a product that’s grown in popularity by leaps and bounds, particularly in the last seven or eight years, and now is probably the second most popular product in the market place after whole life, at least based on premium,” Frank Chechel, second vice president of life products at Guardian, told ThinkAdvisor on Wednesday.
“About a year ago, we started to have discussions around, ‘Is there some way we can add a feature to our whole life product today that gives folks some of the index participation that they’re looking for and that they find in index UL products, but still give them some of the value-add that whole life provides?’”