Prudential Announces Product Updates to PruLife Founders Plus UL® and PruLife Essential UL®

Apr 8, 2019

Prudential is updating PruLife Founders Plus UL® and PruLife Essential UL® on May 6, 2019, subject to state approvals.

PruLife® Universal Plus will be retired 28 days later on June 3, subject to state approvals of Essential UL.

Founders and Essential UL products continue to provide the same great value proposition to clients: cost-effective, permanent death benefit protection with meaningful no-lapse guarantee periods, all with the flexibility of having cash value growth potential.

The updates include:

Founders Plus:

  • Repricing to be compliant with Principal Based Reserves (PBR) requirements and the 2017 CSO mortality tables
  • Improving NLG Durations 1 to 2 years on average from ages 40 to 65
  • Improving 10-, 20-, and 30-year cash values in general in issue ages up to 65
  • Improving Commissionable Target Premiums at least 2.5% for ages 40 to 75
  • Simplifying guarantee structure by removing the limited no-lapse guarantee
  • Replacing Enhanced Disability Benefit Waiver with Waiver of Monthly Deductions

Essential UL

  • Repricing to be compliant with Principal Based Reserves (PBR) requirements and the 2017 CSO mortality tables
  • Adding the latest version of BenefitAccess Rider that allows customers to go on claim for temporary conditions (CA and NY have their own version)
  • Lowering the new business minimum face amount to $25K
  • Leveraging product for conversions under $25K and for ages 86 to 90
  • Improving Commissionable Target Premiums at least 2.5% for ages 40 to 75
  • Simplifying guarantee structure by removing the limited no-lapse guarantee
  • Replacing Enhanced Disability Benefit Waiver with Waiver of Monthly Deductions
  • Expanding availability of death benefit Option C, increasing the maximum issue age from 70 to 75; the factor has increased from 1 to 2
  • Updating Enhanced Cash Value (ECV) Rider benefits so the guaranteed factors now equal the current factors

Universal Plus

  • Will be retired, effective June 3, 2019, subject to EUL state approvals
  • Applications received before June 3 will be processed through the end of 2019

Transition Rules

On Monday, May 6, 2019, several changes will be introduced to our portfolio of Universal Life products.

Revisions to PruLife Founders Plus and PruLife Essential Universal Life will be introduced, subject to state approvals.

The PruLife Universal Plus product will be discontinued at the end of the 28 day PruLife Essential Universal Life transition period. As part of the revision to PruLife Essential Universal Life, this product will now include a low face amount band for contractual conversions, and will offer a face amount minimum of $25,000 for new business.

The following rules apply to any request for New Business, Term Conversion, or OPAI (Option To Purchase Additional Insurance) Conversion.

  • May 6, 2019 (Ready to Sell Date): New Rates for the revised PruLife Founders Plus and PruLife Essential Universal Life products are in effect. All applications signed and dated1 on or after May 6, 2019 will receive New Rates (unless Old Rates are requested and permitted)
  • June 2, 2019 (Transition Period End Date): Last day that an application for PruLife Founders Plus or PruLife Essential Universal Life can be signed with a request for Old Rates
    •  If Old Rates are desired for an application dated during the 28-day Transition Period, a written request, along with the appropriate illustration version, must be submitted on or after the state introduction date
    • Applications dated June 3rd and later will receive the New Rates only
  • June 2, 2019 (Discontinuation Date): Last day than an application for PruLife Universal Plus can be signed. Applications dated June 3rd and later are not eligible for this discontinued product.
  • States that approve the New Rates for PruLife Founders Plus after May 6, 2019 will have their “Ready to Sell Date” and “Transition Period End Date” adjusted. States that approve the New Rates for PruLife Essential Universal Life after May 6, 2019 will have their “Ready to Sell Date”, “Transition Period End Date” and their PruLife Universal Plus “Discontinuation Date” adjusted

REQUESTS FOR NEW RATES
Requests for changes to the New Rates will be permitted for these situations:

  • Any pending case or issued policy that is not yet delivered with an application date prior to the state introduction date can be changed to New Rates, as long as the request for change is made on or after the state introduction date and includes a matching Illustration, and a confirmation of billed premium.
  • An existing PruLife Founders Plus UL or PruLife Essential Universal Life policy that has been delivered and is inforce, and is still within its 90-day New Business Change Period can be changed to New Rates and keep the original policy number and policy date. The written request must be submitted on or after the state introduction date with a matching illustration, confirmation of billed premium with the new rates. Existing policies that are outside the 90-day New Business Change Period cannot be changed to the New Rates.
    • The 90 day New Business Change Period is defined as the 90 day period beginning on the later of the policy date or issue date. For a contractual Term Conversion that is issued after the end of the original conversion period, the change period is defined as the 90 day period beginning on the policy date.
    • For PruLife Founders Plus UL, certain restrictions apply for New Business Change Period requests to New Rates for Indexed products:
      1. The policy will be reissued with New Rates with payment allocation instructions for the Fixed Account, and without any Designated Transfer instructions.
      2. A signed ORD 96200-2017 version of the PruLife Founders Plus Universal Life Insurance Supplement form requesting payment allocation to the Fixed Account must be submitted with the change request.
      3. When the indexed policy is reissued as of the original policy date with the New Rates, any index segments that have been created on that policy will be canceled and the Fixed Account will be utilized for all payment(s).
      4. The full premium(s) (net of charges) for the reissued policy will be reapplied to the policy with the New Rates as of the original payment effective date(s).
      5. Once the reissued policy is delivered, the client may request a change of allocation instructions on a forward going basis to make use of the indexed account features. The premium allocation instructions will remain as the Fixed Account unless a post-issue Change of Account Selection is requested using form ORD 115303 Ed. 12/2017 (Request for Transfer or Change of Allocation PruLife Founders Plus UL). A Change of Account Selection request will be processed as of the Home Office Receipt Date and not as of the original Policy Date

BACKDATING

Normal backdating rules apply, meaning that the new policy date can be backdated up to six months prior to the application date (three months in Ohio). A policy with New Rates can be dated prior to the state introduction date as long as the application meets the requirements in the TRANSITION RULES above.

Please note: If the date of birth is more than 6 months prior to the state introduction date, you cannot backdate the policy to save age with a request for New Rates.

REQUESTS FOR OLD RATES DURING THE TRANSITION PERIOD:
INFORMAL/INQUIRY APPLICATIONS
Informal/Inquiry applications will not be eligible for Old Rates unless replaced by a live application by the end of the 28 day transition period based on state approval.

APPLICATIONS WITHOUT OWNERSHIP ARRANGEMENTS
Formal applications without ownership arrangements (Preliminary applications, trial application and where a Trust is TBD) must be replaced by a final formal application by the end of the 28 day transition period based on state approval to be eligible for the Old Rates.

1Definition of “application date”:

  • Pru Advisors Prepaid eLife – Date on the form of payment and the Authorization, Acknowledgement and Limited Insurance Agreement form
  • Pru Advisors COD eLife – Date the Authorization, Acknowledgement, and Limited Insurance Agreement form and Variable Contract Acknowledgement form (if applicable) were signed by the client
  • Pru Advisors or Third Party Full Application case – Date the Part 1 of application (ORD 96200) was signed
  • Third Party Prepaid Xpress QuickForm case – Date on the form of payment, the Authorization to Release Information form, and the Limited Insurance Agreement form
  • Third Party COD Xpress QuickForm case – Date the Authorization to Release Information form and Variable Contract Acknowledgement form (if applicable) were signed by the client