On Monday, January 28th, Prudential released their new PruLife Survivorship Index UL (2019), replacing the previous version, PruLife Survivorship Index UL. Notably, this release includes the addition of a multiplier account with a guaranteed 15% multiplier on index returns. The inclusion of the account reiterates the previous position of the product as a low-premium play with market-leading primary guarantees.

Premiums for $1 at maturity tend find themselves near the top for conservative interest rates across the board and for full pays everywhere else. Product performance is best illustrated under the new multiplier account when viewing 5% benchmarks, where the multiplier benefits reaches its full potential. Despite a low cap (8.25%) and maximum illustrated rate (5.25%), the 15% multiplier allows for a realized interest assumption of just over 6%, showing slightly stronger values than the non-bonused S&P option when illustrated under 6% assumptions. For max assumptions, the regular S&P allocation is ideal with its higher cap and improved maximum illustrated rate (Cap: 10.50%; Max: 6.36%), also finding its competitive niche for full-pays. Despite decreasing premiums for the lower and max rates, Prudential goes on to improve guarantee ages, further cementing their position at the top for guarantees.

Although accumulation is not the primary focus of the product, maximum distribution scenarios also received the benefits of the account changes, seeing substantial increases across the board to distribution amounts. Even with strong improvements, the product remains largely unchanged along the bottom rungs of the ladder.

  • Prudential introduces their qualified BenefitAccess LTC rider to the survivorship offering with this release.
  • When taking advantage of Prudential’s age last birthday advantage, competitive positioning only further improves.
  • Targets remain the same for $1 at maturity and decrease for max distribution benchmarks, trending mostly to the pack’s back half.
  • Rates were made available on the LifeTrends website on Tuesday, January 29.

TRANSITION RULES

  • January 28, 2019 (Ready to Sell Date): New Rates for the revised product are in effect. All applications signed and dated on or after January 28, 2019, will receive New Rates (unless Old Rates are requested and permitted)
  • February 24, 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 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 February 25th and later will receive the New Rates only
    • The Survivorship BenefitAccess Rider is not available with the Old Rates
    • States that approve the New Rates after January 28, 2019, will have their “Ready to Sell Date” and “Transition Period End 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 revised product ORD 115317 Disclosure form, a matching Illustration, and a confirmation of billed premium.
  • An existing PruLife Survivorship Index UL 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, revised product Disclosure form, confirmation of billed premium with the new rates, and a signed PruLife Survivorship Index UL Insurance Supplement form requesting payment allocation to the Fixed Account. 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. Please Note: Certain restrictions apply for New Business Change Period requests to New Rates for Indexed products:
      • The policy will be reissued with New Rates with payment allocation instructions for the Fixed Account and without any Designated Transfer instructions.
        o 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).
      • 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).
      • 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 Allocation is requested using form ORD 115318 Ed. 1/2019 (Request for Transfer or Change of Allocation PruLife Survivorship Index 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
  • The Survivorship BenefitAccess Rider may be requested in conjunction with a request for New Rates, as long as the request for change is made on or after the state introduction date of both the PruLife Survivorship Index UL plan and the Survivorship BenefitAccess Rider. The written request must include a matching Illustration, revised product Disclosure form, confirmation of billed premium with the New Rates and the rider, the BenefitAccess Rider Supplement for each proposed insured, and the Survivorship BenefitAccess Rider Disclosure form ORD 114463.

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.

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