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

In the life insurance industry, something totally new comes along only once in a great while. Game changers are rare, and this is one of them. Today Ohio National Financial Services, Inc. announces the debut of the first and only indexed whole life insurance product, providing what no other life policy can: guaranteed protection, stability and index-based growth potential.

Indexed whole life from Ohio National provides a lifelong death benefit and cash accumulation guarantee, along with fixed premiums regardless of changes in health. These features have served generations of policyholders in the company’s traditional whole life products. With new indexed whole life, customers can get the same guarantees — plus the opportunity to grow cash value in relation to stock market indexes such as the S&P 500 and Russell 2000.

Indexed-based allocation options offer significant growth potential, but because funds are not invested directly in the market, there is no risk of loss due solely to market performance.

The accumulated cash value can be accessed during the insured’s lifetime, generally on a tax-preferred basis, for almost any purpose, from supplementing retirement income to starting a business.

“Our new indexed whole life product is an important breakthrough for Ohio National and the financial professionals who sell our products,” said Karl Kreunen, vice president of product marketing. “We’re thrilled to offer them a unique tool to help their clients reach their financial goals.”

“This product is something financial professionals can’t find anywhere else,” added Pat McEvoy, senior vice president of life distribution and sales. “We’re passionate about helping them develop client relationships and build their businesses with the addition of indexed whole life to their portfolios.”

Ohio National’s debut indexed whole life product, Prestige Indexed 10 Pay, features 10 years of fixed premium payments and is currently available through independent financial professionals in all states except California and New York. Product marketing information for financial professionals is available at iwl4life.com.

Kreunen said they’ve already seen a lot of positive feedback about the new indexed whole life product from Ohio National’s agent group as a result of a “soft launch” on Aug. 29. “We’ve already had a lot of excitement in our agent group with people asking questions,” Kreunen said. “We’re very positive about where this is headed.”

23 COMMENTS

  1. scagnt83

    Not the first. Guardian has had an Index Rider on their WL for at least the past 5 years now.

    That company is so inept they dont even know the product features of their competition. Just another in a long list of reasons not to work with them.

    I was going to comment the same. Guardian has had this option for the last few years.

  2. scagnt83

    Not the first. Guardian has had an Index Rider on their WL for at least the past 5 years now.

    That company is so inept they dont even know the product features of their competition. Just another in a long list of reasons not to work with them.

    That is a rider on a conventional WL policy. If the Ohio National is built into the base policy, then it would be the first of its kind.

  3. rousemark

    That is a rider on a conventional WL policy. If the Ohio National is built into the base policy, then it would be the first of its kind.

    I guess you you could say that. But its an automatically included rider if I remember correctly. So its essentially part of the Base Policy by default.

    ON allows premiums to be allocated to indexed accounts. Guardian allows premiums to be allocated to indexed accounts. Same effect to the policy.

    But it does sound like ON has multiple indexed options. Guardian only has the one. So in all fairness ON is more "indexed like" than Guardian.

  4. Thank you for commenting. Yes we are aware of the Guardian indexing option, we are also aware of the OneAmerica indexing option. Neither product is the same as our new Indexed 10 Pay policy. Briefly, those policies provide an option for a share (0-100%) of the dividend to be allocated to an indexing option. Our policy allocates the entire net premium to an indexing option providing a higher potential upside for the policy owner. There are many other differences between the policy types, but if you’d really like to learn some more please visit iwl4life.com where we have considerable material that you can review.

  5. Karl Kreunen

    Thank you for commenting. Yes we are aware of the Guardian indexing option, we are also aware of the OneAmerica indexing option. Neither product is the same as our new Indexed 10 Pay policy. Briefly, those policies provide an option for a share (0-100%) of the dividend to be allocated to an indexing option. Our policy allocates the entire net premium to an indexing option providing a higher potential upside for the policy owner. There are many other differences between the policy types, but if you’d really like to learn some more please visit iwl4life.com where we have considerable material that you can review.

    Thanks for the clarification of how it works.

    To get technical. Guardian allocates the Cash Value of Paid Up Additions. Which is different than the Dividend. Not sure about OneAmerica.

    Considering the increasing rate environment, as an agent Id rather see a strong and steady increasing Dividend Rate on a WL policy vs. indexing features.

  6. From a business perspective at the corporate level, this was probably a very smart play. An attempt to gain some internal transfers and stop the bleeding perhaps.

    From a sales standpoint, now the agent can say "you dont have to trust ON, just trust the S&P". Of course that is leaving renewal rates out of the conversation… which is 100% based on trust.

  7. scagnt83

    From a business perspective at the corporate level, this was probably a very smart play. An attempt to gain some internal transfers and stop the bleeding perhaps.

    From a sales standpoint, now the agent can say "you dont have to trust ON, just trust the S&P". Of course that is leaving renewal rates out of the conversation… which is 100% based on trust.

    Not really.. You still have to trust ON to pay the projected dividend or there won't be anything going into the index fund.

  8. Karl Kreunen

    Thank you for commenting. Yes we are aware of the Guardian indexing option, we are also aware of the OneAmerica indexing option. Neither product is the same as our new Indexed 10 Pay policy. Briefly, those policies provide an option for a share (0-100%) of the dividend to be allocated to an indexing option. Our policy allocates the entire net premium to an indexing option providing a higher potential upside for the policy owner. There are many other differences between the policy types, but if you’d really like to learn some more please visit iwl4life.com where we have considerable material that you can review.

    Who would trust ON after the recent few years of complete 180 degree corporate changes on several products, several philosophies, who owns you, etc. What guarantee does a client have that you won't gut this product after record sales

  9. Lloyds of Lubbock

    What makes this product different than Guardian or AUL.
    Other than the fact that the company screwed it's policy holder and agents.

    As I understand it, Guardians Rider allocates PUA Cash Value to the Indexed Allocations. It does not directly allocate premium to indexed allocations like an IUL does.

    I havent taken the time to run any illustrations or do a deep dive on the web link provided. But I am curious what this does to the guaranteed values when compared to Guardian. My guess is there is very little money in the Guaranteed column.

  10. Tahoe Ray

    Well there better be a decent amount in there or why not just buy max funded IUL?

    If the premium is being allocated. Id think it would be dependent on the portion of premium allocated to the indexed accounts. If you allocated 100% of premiums to indexed accounts, whats left to create a guaranteed value?

  11. "Not the first. Guardian has had an Index Rider on their WL for at least the past 5 years now."
    It's closer to ten.
    ONAT's policy seems like an old interest sensitive whole life with the engine being the index rather than the company's general account.
    It would be interesting to see how they handle the GCV.

  12. scagnt83

    If the premium is being allocated. Id think it would be dependent on the portion of premium allocated to the indexed accounts. If you allocated 100% of premiums to indexed accounts, whats left to create a guaranteed value?

    I don't know.

    Lloyds of Lubbock

    It would be interesting to see how they handle the GCV.

    Yes it will be.

  13. 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. :no:

  14. pfg1

    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. :no:

    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

  15. 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

  16. 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

    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

  17. Allen Trent

    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 or 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.

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