SUMMER 2021 29
Notable VUL products
Penn Mutual was one of the first to offer leveraged , indexed options within their VUL lineup . They have three IUL sub-account options named uncapped , enhanced , and classic , with various attributes and associated costs . Penn Mutual is tightening their distribution from a wholesale perspective for 2021 , to include only a few BGA and producer groups , which certainly makes this a less attractive offering from a wholesale standpoint , but still would be appealing for retail agents .
Lincoln ’ s AssetEdge VUL offers four indexed options with varying caps , floors , and asset-based charges and Lincoln has reported strong sales in the product year to date . Lincoln ’ s IUL sub-account options are perform plus , perform , balance , and conserve , in addition to over 70 different high quality investment funds on the chassis . Securian ’ s accumulation VUL , called Premier VUL , offers up to five different IUL sub-account options . Many of the other VUL carriers have integrated indexed options within their VUL lineups , such as John Hancock , Prudential , Pacific Life , and Nationwide . There is no doubt we will continue to see more carriers follow suit .
New growth opportunities
Much like what happened in 2013 with AG 38 enhancing the attractiveness of guaranteed VUL compared to traditional GUL , I believe AG 49-A has opened a new growth opportunity for VUL as an IUL alternative . Now , instead of being forced to select a single indexing strategy within IUL , a customer can mix and match from a menu of IUL strategies , investment funds , and fixed accounts all within a single product . As a customer ’ s risk tolerance changes over the years , they can shift into different allocations depending on their need , and the IUL sub-accounts give the product a control mechanism for volatility and downside risk when the customer needs stability .
The major barrier to entry for insurance agents to the VUL market is the process and cost of acquiring FINRA licensing and a brokerdealer registration . It is especially challenging to find a brokerdealer that understands the insurance business . As things move along , we will see how that potential need develops , but for the time being , VUL has positioned itself well in both the protection and accumulation markets .
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