Ohio National to Develop Indexed Products

[DHK]

http://www.lifehealthpro.com/2016/0...g-mutual-insur?page_all=1&slreturn=1464450357

Hersch: I don’t see indexed products among your insurance and annuity portfolios. Why’s that?

Huffman: Historically, we haven’t manufactured these products, but we have noted a growing demand for them in recent years and so we’re developing them. As to the recently finalized fiduciary rule, we’re also developing a no-commission product that producers can wrap a fee around.

I hope they develop both indexed annuities with living benefits and an indexed life product of some kind. For them, with their strong life portfolio, I could see an IUL and an Indexed WL, similar to what Guardian has with a dividend option for indexing with guarantees.

 

[scagnt83]

The statement about the DOL Fiduciary regs was obviously directed at annuities since that reg has nothing to do with Life Insurance.

Very interesting that they plan to classify it as a "Wrap Fee". That is a VERY specific term!

IF he used that term correctly, that means it will be a RIA only product.

If he used that term as a generic term for a flat Trail based commission, then that is no different than what many of the major IA carriers already offer.


But to speculate even more about that statement... IF it is indeed a RIA only product.... that COULD mean that ON has formed the opinion that this ruling will force Qualified IA sales to be performed by IARs only.... ????!!!!????

I will post about this in the Annuity forum so that we can keep this thread on track about Indexed Life.
http://www.insurance-forums.net/for...ible-ria-only-product-t82528.html#post1104405

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As far as the life insurance side of his statement... if its an IUL I will be interested. But I cant say that I am a fan of Indexed options within WL yet... Guardian's is interesting but it is not real great from a performance standpoint vs. just going with Dividends.

The best thing WL has going for it is it's consistency. The best thing IUL has going for it is the ability to accumulate more than WL and to use GPT testing.

With Guardians indexed option it waters down the accumulation compared to IUL, and it still uses CVAT. I havent been convinced yet that it is better than just going with the traditional Dividend option.

jmo

 

[DHK]

I'm going to disagree with you slightly regarding the best thing about WL.

WL offers either RPU or limited pay options. You can stop paying on your policy and keep it in force. THAT is what makes it compelling for me. You can't do that on a guaranteed basis with UL. You can stop making premium payments on a UL, but you still have a COI to manage.

 

[scagnt83]

I'm going to disagree with you slightly regarding the best thing about WL.

WL offers either RPU or limited pay options. You can stop paying on your policy and keep it in force. THAT is what makes it compelling for me. You can't do that on a guaranteed basis with UL. You can stop making premium payments on a UL, but you still have a COI to manage.

Compared to traditional UL (at todays interest rates, it used to be possible to do a rpu UL on guaranteed basis), I agree.

But compared to an IUL I would disagree.
I can make an IUL sustainable on a limited pay basis just slightly over the Guaranteed rate... and if you are expecting or worried that an IUL will perform only at the Guaranteed rate over the long term, then you have no business purchasing or selling IUL.

 

[BNTRS]

I'm going to disagree with you slightly regarding the best thing about WL.

WL offers either RPU or limited pay options. You can stop paying on your policy and keep it in force. THAT is what makes it compelling for me. You can't do that on a guaranteed basis with UL. You can stop making premium payments on a UL, but you still have a COI to manage.

That's not always correct per se.

Indexed universal life insurance is somewhat different (only because several whole life focused insurers don't have an IUL product) but most WL focused insurers offer an internal exchange (not replacement) from UL to whole life if the insured wants to. Any shortfall in guaranteed cash must be made up (usually there is no shortfall) and once the exchange takes place, an RPU option can be triggered.

Additionally and practically speaking, one can achieve a pretty safe bet UL contract with no future premiums required through a face amount reduction that would be very similar to the face amount reduction an RPU trigger would cause. This isn't guaranteed I completely grant you, but with such a small NAAR, it's comes with extremely low COI expenses that several guaranteed fixed rate accounts could more than offset.

 

[jboussea]

That's not always correct per se.

Indexed universal life insurance is somewhat different (only because several whole life focused insurers don't have an IUL product) but most WL focused insurers offer an internal exchange (not replacement) from UL to whole life if the insured wants to. Any shortfall in guaranteed cash must be made up (usually there is no shortfall) and once the exchange takes place, an RPU option can be triggered.

Additionally and practically speaking, one can achieve a pretty safe bet UL contract with no future premiums required through a face amount reduction that would be very similar to the face amount reduction an RPU trigger would cause. This isn't guaranteed I completely grant you, but with such a small NAAR, it's comes with extremely low COI expenses that several guaranteed fixed rate accounts could more than offset.

don't IUL's allow you to lower the face amount if need be. Isn't that a form of RPU?

 

[MichaelBurton]

Wish ONL would add a 25yt and/or 30yt to its menu while they are working on these other more complicated products.

 

[DHK]

don't IUL's allow you to lower the face amount if need be. Isn't that a form of RPU?

That's true, but it isn't guaranteed... but for all practical purposes of managing COI, it could be.

 

[scagnt83]

That's true, but it isn't guaranteed... but for all practical purposes of managing COI, it could be.

Generally speaking, WL RPU is not guaranteed either unless you use a limited pay product.

 

[jboussea]

Generally speaking, WL RPU is not guaranteed either unless you use a limited pay product.

I'm assuming both you and dhk are saying both policies can lapse?.. I understand how the iul can lapse but how can the wl lapse?