Equity Indexed Universal Life Insurance Blog

Phoenix Life Rolls Out Indexed UL

nospam@example.com (Equity Indexed Universal Life Insurance) — Wed, 25 Apr 2007 08:00:24 -0700

Phoenix Adds Indexed Universal Life to Product Portfolio

Offers policy flexibility and simple index options

HARTFORD, Conn.--(BUSINESS WIRE)--March 27, 2007--The Phoenix Companies, Inc. (NYSE: PNX) today introduced Phoenix Indexed UL(SM), a flexible premium universal life insurance policy that gives customers the opportunity to grow their cash values in line with a rising stock market while protecting these assets with guaranteed minimum returns even when the market drops.

Phoenix Indexed UL is designed to appeal to individuals who need maximum flexibility in insurance premiums, coverage options, and access to cash value through policy loans or withdrawals. It is also attractive to business owners who need permanent life insurance protection, want cash value growth, and will fund the policy with an executive bonus plan, spilt-dollar plan, or corporate-owned life insurance.

"Phoenix Indexed UL is an important addition to our product portfolio because, for the right clients, it's a significant improvement over traditional universal life," said Philip K. Polkinghorn, senior executive vice president, Life & Annuity. "While other universal life policies offer the opportunity to build cash value, we're offering greater funding and income options, as well as downside protection for cash values."

"We heard from advisors that their clients want insurance products that offer a variety of options and are easy to understand. The Phoenix Indexed UL delivers on both counts for our customers," Polkinghorn said.

The flexibility of the Phoenix Indexed UL policy is evident in several features, including the investment choices that clients can make based on their personal risk tolerance, financial goals and approach to investing, or on market activity.

Phoenix Indexed UL offers the choice of three accounts for tax-deferred accumulations of cash value: a fixed account and two index accounts that track the annual point-to-point growth of the Standard & Poor's 500* Index. The indexed accounts are:

Indexed Account A, which credits 100 percent of the growth in the S&P, up to a specified cap, currently 12 percent. This account may be suitable for individuals who believe the S&P 500 will fluctuate moderately over time.
Indexed Account B, which credits a proportion (currently 75 percent) of the growth in the S&P, with no caps on the maximum annual growth. Thus an individual would get a 7.5 percent return if the S&P 500 grew 10 percent; 11.25 percent on an S&P 500 return of 15 percent; and a 15 percent return if the S&P 500 grew 20 percent**. This option may be suitable for an individual who expects the stock market to fluctuate significantly over time.

Both Indexed Accounts A and B have a guaranteed minimum rate of 1 percent, even if the S&P 500 has negative returns for the year. Clients can change their premium allocations at any time, and have the opportunity to transfer from the Fixed Account into an Indexed Account, or to reallocate between the Indexed Accounts, with certain restrictions.

In addition to flexible investment options, Phoenix Indexed UL lets clients modify premium payments and insurance coverage and choose from a range of death benefit options. Clients who need access to their cash values can take a tax-free policy loan or a tax-free withdrawal, up to the cost basis of the initial premium.

Phoenix Indexed UL also features the company's unique Healthy Measure Reward, which offers up to a 20 percent discount on the cost of insurance for clients who have and maintain a healthy lifestyle, as measured by their Body Mass Index (BMI).

Phoenix is a leader in the life insurance industry, with a distinguished record of industry firsts in product design and underwriting. The company's underwriting capabilities can accommodate a range of customers and risk situations and address clients' estate, business and retirement planning strategies. Phoenix also offers a complete suite of annuity products with a full spectrum of optional guarantees, and with expert technical analysis of complex annuity contracts to help customers own the right products to fit their unique needs.

With roots dating to 1851, The Phoenix Companies, Inc. (NYSE:PNX) helps individuals and institutions solve their often highly complex personal financial and business planning needs through its broad array of life insurance, annuities and investments. The company's products and services reflect deep insights into the wants and needs of consumers and financial professionals gleaned from research, including its Phoenix Wealth Survey, conducted annually since 1999. Phoenix has been recognized for its people-friendly programs by Working Mother magazine, the National Association of Female Executives and The Princeton Review. In 2006, Phoenix had annual revenues of $2.6 billion and total assets of $29.0 billion. For more information, visit www.phoenixwm.com.

Phoenix Indexed UL (Form 06IUL) is issued by PHL Variable Insurance Company (PHLVIC) (Hartford, CT). In Maine and New York, Phoenix Indexed UL (Form 06IUL) is issued by Phoenix Life Insurance Company (East Greenbush, NY). PHLVIC is not authorized to conduct business in Maine and New York. The insurers referenced above are separate entities and each is responsible only for its own financial condition and contractual obligations. All guarantees under the policy are based on the claims-paying ability of the named company.

IRS Circular 230 Disclosure: Any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, to avoid penalties imposed under the U. S. Internal Revenue Code, and was written to support the promotion or marketing of the transactions or matters addressed here. Individuals should seek independent tax advice based on their own circumstances.

* "Standard & Poor's®", "S&P®", "S&P 500®", "Standard & Poor's 500" and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Phoenix Life Insurance Company and its affiliates. This policy is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing this policy.

** This hypothetical example is for illustrative purposes only. This is not a prediction or guarantee of actual results. Actual results will vary from those described. This example is not intended to represent the value or performance of any specific product.

BPD 31442 3-07

F & G Life (Old Mutual Life) Reduces Cap Rate on Master Choice

nospam@example.com (Equity Indexed Universal Life Insurance) — Tue, 24 Apr 2007 16:51:39 -0700

We have confirmed today that Old Mutual Life (F & G Life), one of the largest writers of equity indexed UL policies, will soon reduce the cap rate on their MasterChoice equity indexed life insurance product from 17% to 15%. The 2% total reduction represents a net 12% decrease of the upside potential for policyholders and will have a negative impact on their projected index credits.

In other words, many individuals that purchased the MasterChoice policy only a few years ago under the assumptions of a 17% cap rate and 9% + indexed credits will now only be eligible for up to 15% of the growth of the underlying index.

Even with this recent reduction, the MasterChoice product will still have the highest cap rate available in the marketplace today, but with a cost. Maintaining a high cap rate is not rocket science. It simply boils down to economics. The cap rate percentages are a function of the cost of the call options that support the cap rate. The higher the cap, the more expensive the options required lock-in that rate. Any company can achieve a high cap rate but the increased costs of the options have to be accounted for which means higher expenses for the customer or reduced revenue for the insurer or, of course, a lower cap rate.

Bottom line: Make sure you understand how the EIUL product works before making your final decision. For further insight on reviewing EIUl policies see, Selecting the Right Indexed Life Policy

To learn more about cap rates, see "How an EIUL Policy Works".

nospam@example.com (Equity Indexed Universal Life Insurance) — Tue, 24 Apr 2007 00:00:00 -0700

EIUL- Equity Indexed Life Insurance- If it looks too good to be true....

nospam@example.com (Equity Indexed Universal Life Insurance) — Thu, 08 Jun 2006 16:24:20 -0700

If you are considering the purchase of an equity index UL policy for tax free retirement income, make sure you do your homework before making your policy choice. Our firm, MEG Financial, Inc., has recently talked to several potential clients that have been shopping for indexed life insurance and we have discovered that many of the policy illustration projections being shown to prospects are highly aggressive and quite frankly not realistic. Furthermore, we have found that many prospective clients are putting too much emphasis on these "projections" and have not fully reviewed any of the potential downside risks associated with overly aggressive index life illustrations.

An insurance policy illustration is a marketing and sales piece distributed by an insurance company to show how an insurance policy might perform given a certain set of circumstances. Illustrations can be run to show many different scenarios with respect to interest rates, loan rates, premium payments, insurance amounts, etc. Illustrations should be used for comparison purposes only and should not be considered true predictors of policy performance. In fact, in all likelihood, any illustration that is shown will vary significantly from the actual results within the first policy year.

A good example of the inaccuracy of policy illustrations took place in the early 1980's with respect to interest rates and universal life insurance. At that time, interest rates were at all time highs reaching about 18-19%. During this period, universal (UL) life insurance was a very attractive life insurance product. Given the extremely high interest rates, universal life insurance policy illustrations projected significant cash value growth and in some cases projected "paid up policies". For this reason, many purchased these UL policies as savings vehicles that provided financial security and potentially tax free income. As you can imagine, the cash values increased dramatically at the illustrated 14-15% interest rate projections. However, as interest rates declined, the circumstances changed and universal life insurance cash values never reached the illustrated or projected levels. Many policyholders did not understand the impact lower interest rates would have on their UL policies and therefore were shocked when their policies underperformed. Many of these policies eventually lapsed or significantly higher premiums were required to continue the insurance.

Equity indexed life insurance is an excellent vehicle for accumulating cash for retirement income. However, when considering any equity index life policy, our recommendation is to review several illustration scenarios with more than one agent and compare each given the different variables. Only after reviewing the possibilities can you get a true feeling for how these policies may perform. No one has a crystal ball and you should know what to expect given interest rate swings or variations in the returns of the underlying index. If you do your homework and deal with professional insurance agents, you can have peace of mind knowing that whatever happens with respect to your policy, there will not be surprises like most of the universal life policy holders experienced in the 1980's.

If it looks to good to be true.... it probably is.....LET THE BUYER BEWARE!

What variable loan rate should be used in an equity indexed life insurance policy illustration?

nospam@example.com (Equity Indexed Universal Life Insurance) — Wed, 31 May 2006 21:21:06 -0700

The variable loan rate used in the index life illustration has an tremendous impact on the amount of loan proceeds available. Therefore, it becomes very important to identify a rate that is realistic.

One way to determine a realistic variable loan rate to use for the illustration is to look at the historical average for the Moody's Corporate Bond Yield Average. The historical average over the last 15 years results in a 7.3% rate and the 30 year historical average results in an 8.4% rate. These are historical averages only. Please see the actual results for the Moody's Corporate Bond Yield Average in the caption below.

Another option would be to use the current variable loan rate. For policy years beginning in 2006, the current variable loan rate is 5.7% and is currently the lowest allowable illustrated Variable Loan rate. Although the current rate will produce the highest loan values, the loan values may be overstated based on the historical averages. Before using the current rate, we recommend that you compare options to determine if it accurately reflects your expectations. Please see the actual results for the Moody's Corporate Bond Yield Average in the caption below.

See the actual results below of the S & P 500 index (not including dividends) since 1988. A careful review of these returns with a comparison of the Moody's Corporate Bond Yield Averages since 1988 reveals the volatility of using the variable loan rate approach. Make sure that the illustration you are basing your decision on uses a realistic variable loan rate.

How is the loan rate charged on a variable loan option determined?

nospam@example.com (Equity Indexed Universal Life Insurance) — Wed, 31 May 2006 21:15:38 -0700

The amount charged for a Variable loan is based on the Moody's Corporate Bond Yield Average. The Guaranteed Maximum Variable Loan Rate most companies can charge is 10%, however the loan rate may go as low as 4%. The insurance company will review this loan rate at least once each year and will change it when necessary.

What are variable rate loans in indexed universal life policies?

nospam@example.com (Equity Indexed Universal Life Insurance) — Wed, 31 May 2006 21:12:53 -0700

Variable Loans, available with some equity index life policies, differ from traditional loans as the loan interest charged may fluctuate based on Moody's Corporate Bond Yield Average. In addition, the loan value does not automatically get transferred to the fixed account so the amount of interest credited to the loan may fluctuate based on the index credits and fixed account interest credited to the policy.

Beware of Illustrated Cash Values with Variable Policy Loans on EIUL Policies

nospam@example.com (Equity Indexed Universal Life Insurance) — Tue, 23 May 2006 16:20:38 -0700

Equity indexed life illustrations can be very misleading if not carefully scrutinized. Beware of projections that show continuous cash value increases during periods when loans are taken.
Continue reading "Beware of Illustrated Cash Values with Variable Policy Loans on EIUL Policies"

Multiple index account options may be available

nospam@example.com (Equity Indexed Universal Life Insurance) — Mon, 22 May 2006 07:43:13 -0700

One of the major insurers in the equity indexed insurance marketplace, Midland National Life, has recently announced the addition of two new index account options.
Continue reading "Multiple index account options may be available"

Launch of the Equity Indexed Life Insurance Blog

nospam@example.com (Equity Indexed Universal Life Insurance) — Mon, 15 May 2006 08:43:50 -0700

MEG Financial, Inc. announces launch of the equity indexed life insurance blog.
Continue reading "Launch of the Equity Indexed Life Insurance Blog"

Launch of the Equity Indexed Life Insurance Blog

nospam@example.com (Equity Indexed Universal Life Insurance) — Mon, 15 May 2006 08:43:50 -0700

MEG Financial, Inc. announces launch of the equity indexed life insurance blog.
Continue reading "Launch of the Equity Indexed Life Insurance Blog"

nospam@example.com (Equity Indexed Universal Life Insurance) — Mon, 15 May 2006 08:43:48 -0700

Equity Indexed Life Insurance News

nospam@example.com (Equity Indexed Universal Life Insurance) — Wed, 08 Feb 2006 13:26:37 -0700

Test on Equity Indexed Life Insurance

MEG Financial
Continue reading "Equity Indexed Life Insurance News"