Industry’s first indexed whole life product debuts today from Ohio National

[Allen Trent]

They sent me a letter last week terminating my appointment for lack of production, then now are sending me emails about their great new product.


All I know for sure is my one client with a bigger WL policy (paid up at 65 policy) with ON... on the in-force illustration, his dividend when paid up at 65, is projected to be 95% LESS than illustrated.

In all fairness, that is 5% better than what they said the worst could be & back then they never knew they would run the company in the ground & need to sell it to a pension fund from another country

 

[Lloyds of Lubbock]

Some info
On September 6, Ohio National launched Prestige Indexed 10 Pay, a non-participating fixed premium Whole Life product that offers index-based growth opportunities

· Prestige Indexed 10 Pay has a 2% guaranteed non-forfeiture interest rate, and offers the client the option to allocate premiums to four different indexed accounts (none of which are proprietary) and a fixed account

· All Index Accounts have a guaranteed minimum 100% participation rate and a 0% floor

· A current and guaranteed 20 basis point interest bonus will be added to the interest credited at the end of each segment for all index segments that begin in the 11th policy year and later

The bonus will be credited to the Fixed and Interim accounts provided the current interest crediting rate is greater than two percent

· Prestige Indexed 10 Pay has two loan types available, a Standard Loan and an Index Loan. Loan interest will accrue and be billed at a variable rate for both loan types

· Optional Riders include Overloan Protection and Waiver of Premium with a five year your own occupation definition

· The maximum waiver amount is $15,000 monthly premium ($180,000 annually). No waiver is available for policies with face amounts greater than $5,000,000

· A single Premium Rider available only for 1035 funds be applied in the first year. No other PUA riders are available

 

[Allen Trent]

Some info
On September 6, Ohio National launched Prestige Indexed 10 Pay, a non-participating fixed premium Whole Life product that offers index-based growth opportunities

· Prestige Indexed 10 Pay has a 2% guaranteed non-forfeiture interest rate, and offers the client the option to allocate premiums to four different indexed accounts (none of which are proprietary) and a fixed account

· All Index Accounts have a guaranteed minimum 100% participation rate and a 0% floor

· A current and guaranteed 20 basis point interest bonus will be added to the interest credited at the end of each segment for all index segments that begin in the 11th policy year and later

The bonus will be credited to the Fixed and Interim accounts provided the current interest crediting rate is greater than two percent

· Prestige Indexed 10 Pay has two loan types available, a Standard Loan and an Index Loan. Loan interest will accrue and be billed at a variable rate for both loan types

· Optional Riders include Overloan Protection and Waiver of Premium with a five year your own occupation definition

· The maximum waiver amount is $15,000 monthly premium ($180,000 annually). No waiver is available for policies with face amounts greater than $5,000,000

· A single Premium Rider available only for 1035 funds be applied in the first year. No other PUA riders are available

Interesting. So, because it is a WL, they have to collect enough premiums to both guarantee the face forever & also enough so that the guaranteed cash value equals face at 120, right?

Wonder how much of the premium can be going into those index accounts if the base guarantee has to carry the guaranteed face & guaranteed cash value that UL/IUL don't have to guarantee

 

[scagnt83]

Interesting. So, because it is a WL, they have to collect enough premiums to both guarantee the face forever & also enough so that the guaranteed cash value equals face at 120, right?

Wonder how much of the premium can be going into those index accounts if the base guarantee has to carry the guaranteed face & guaranteed cash value that UL/IUL don't have to guarantee

Not as much as they are going to make it seem like. Saw a flyer for it over the weekend and it made it out like every dollar of premium is going into indexed accounts.

One thing I dont like about it is that if its like all other WL, there is no expense report. So you might not even be able to tell exactly how much is going into what.

Essentially they offloaded risk of return onto the stock market for clients. Huge shift to that in the insurance industry in general.... right when many experts seem to predict a sideways market over the next decade.... somehow it does not seem like coincidence from an overall industry perspective.

 

[ejbarraza]

It seems to be an IUL without most of the Whole Life guarantees like fixed cost of insurance or reduced paid up option or PUA/Term rider. I think its the worst of both worlds.

 

[Allen Trent]

without most of the Whole Life guarantees like fixed cost of insurance or reduced paid up option or PUA/Term rider.

While I don't like the product, a couple of things you mention are not true because the policy is WL. Because it is WL, the premium is 100% contractually & legally guaranteed. Also, because it is WL, the laws require non forfeiture options & Reduced Paid up is legally required. Otherwise, they couldn't call this WL at all as it wouldn't legally be WL without that

 

[ejbarraza]

While I don't like the product, a couple of things you mention are not true because the policy is WL. Because it is WL, the premium is 100% contractually & legally guaranteed. Also, because it is WL, the laws require non forfeiture options & Reduced Paid up is legally required. Otherwise, they couldn't call this WL at all as it wouldn't legally be WL without that

My bad I didn't read that they offered a reduced paid up option on any of their documents. But why does it say Universal Life if it is a whole life policy?

 

[Tahoe Ray]

My bad I didn't read that they offered a reduced paid up option on any of their documents. But why does it say Universal Life if it is a whole life policy?View attachment 8193

Huh...that's interesting.

 

[Allen Trent]

My bad I didn't read that they offered a reduced paid up option on any of their documents. But why does it say Universal Life if it is a whole life policy?View attachment 8193

That is a great question. I only saw the name of the product as WHole life, but now I see there is a UL column. Appears the base contract is a WL, but somehow has a rider for UL & that is maybe where the index comes in to receive the "over funding"

 

[DHK]

I'm sure it's a software programming issue for the title of that column. All someone needs to do is let the sales desk know and they can get it updated. It's a new product so I'm sure they're working through some issues. (Not that I'm representing or defending them - just the reality. I've had other illustration issues from other companies on occasion.)