Prudential released a new version of PruLife Universal Protector, now noted as the (2016) version. As with many of their previous updates, Prudential applied flat rate increases to single, short and full-pay designs. Among the steady stream of reprices in the NLG market, after this reprice, PruLife Universal Protector (2016) retains most of its previous strength, despite undergoing its second premium increase of 2016.
At the beginning of 2016, PruLife Universal Protector (2013) was a steady, top-quartile product when considering shorter pay designs. Unsurprisingly then, PruLife Universal Protector experienced the highest premium increases at single pays (5%), followed by short pays (2.5%), and full-pays (≈ 1.5%). The product remains strongest in limited-pays with younger clients, but its strength wanes with middle-aged consumers and as guarantees become more limited. For younger ages (20-35) looking at shorter-payment solves, premiums will fall within 10% of the lowest-priced no-lapse guarantee product.
Of course, when comparing based on Prudential’s Age Last Birthday Advantage, PruLife UL Protector (2016) competitive positioning only strengthens among its peers.
Targets were unchanged, remaining weak outside of tabled-rated clients.
On Monday, June 15th, Prudential released a revised PruLife Founders Plus UL (2015). The only revision to the product was the extension of the primary guarantee, no premium or cash value changes occurred. Prudential expanded upon the already a strong primary guarantees of the product. This change results in PruLife Founders Plus UL (2015) being the best primary guarantee in the current assumption UL market, lasting to an average age of 93 for the scenarios Shaw American examines.
When looking at Founders Plus, it is important to note that it also has an indexed component. The primary guarantee is not interest rate sensitive, but is a function of the premium. To realize the full benefit of the long primary guarantee, it is best to allocate to the fixed account or at least buffer the index premium. For further explanation, if you minimally fund the product at the fixed account rate of 4.1%, premiums produce a primary guarantee averaging to age 93 (see page 2 of the Snapshots Exhibit). If you minimally fund it at a higher assumed interest rate, such as 6%, the lower outlay produces lower primary guarantees averaging to age 78 (see page 4 of the Snapshots Exhibit). When compared to the current primary guarantee leader for IUL (Protective’s Indexed Choice UL), the guarantees fall about 10 years shorter, with much less cash and some better/worse premiums.
All primary guarantee data for the current assumption universal life benchmarks were added on Wednesday, June 17th. Note: by the end of the summer, you will see primary guarantees added to the indexed universal life benchmarks.
Click Here for Snapshots Exhibit