Regulatory requirements associated with 2017 CSO mortality tables are impacting how the life insurance industry prices protection products.
- Effective July 15, PruTerm WorkLife 65 will no longer be available for new sales.
- Effective July 15, 2019, Prudential’s Term Essential and Term Elite products will be repriced to reflect new mortality tables.
Term Essential and Term Elite Remain Competitive and Attractive
Some prices have increased, while others have decreased, with many scenarios unchanged. The overall average is a 1.5% increase.
Term Elite will also have the following changes:
- Disability waiver rates have been reduced by an average of 27%. Disability waiver rates have decreased for BOTH Term Essential and Term Elite.
- Minimum face amount has been increased to $1M
- Conversion period has been aligned with Term Essential
- Modal factors have also been reduced
Remember, Prudential’s Term Essential and Term Elite offer:
- Face amounts to cover the varying needs of clients.
- Age last birthday pricing; this may mean lower premiums for clients
- Opportunity to convert to ANY of Prudential’s nine permanent products
- Living Needs Benefit
- Speed and convenience through emerging e-capabilities
Stay Informed
To help you best manage the transition, notification will be sent for cases pending on July 15, 2019, that may see lower rates as a result of the revised product. Any additional change in underwriting results or policy details may change the result for customers; please stay connected via Web Case Status.
TRANSITION RULES
- July 15, 2019 (Ready to Sell Date): New Rates for the repriced product are in effect. All applications signed and dated on or after July 15, 2019, will receive New Rates (unless Old Rates are requested and permitted)
- August 25, 2019 (Transition Period End Date): Last day that an application can be signed with a request for Old Rates
- If Old Rates are desired for an application dated during the 42-day Transition Period, a request must be submitted on or after the state introduction date
- Applications dated August 26th and later will receive the New Rates only
- States that approve the New Rates after July 15, 2019, will have their “Ready to Sell Date” and “Transition Period End Date” adjusted.
Definition 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
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
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 42-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 42-day transition period based on state approval to be eligible for the Old Rates.