Nationwide s EDBG VUL to GUL:

Transcription

1 Solution Focus Nationwide s EDBG VUL to GUL: Due to low interest rates and increased reserve requirements with AG38, no-lapse guarantee (NLG) VUL has become competitively priced compared to GUL. BGAs and advisors are starting to discuss NLG VUL as a potential alternative to GUL when it is suitable. Built into Nationwide s Protection VUL illustration software is an option to compare their Protection VUL w/ the Extended Death Benefit Guarantee rider (EDBG) to their No-Lapse Guaranteed UL product*. This doesn t provide you with a printable report, but it does give you a snapshot comparison of the comparable data (see screen shot below). In this particular example, a comparison using the same premium was used: The most significant observation here is that you have comparable guarantees (Age 100 vs. 120), but with the variable contract, you have the potential benefit of cash value accumulation you can t get with a traditional, guaranteed UL. Not to mention a higher target premium amount. So for the same premium, this particular client could opt for the VUL contract instead of the GUL, and still maintain a death benefit guarantee. Attached: Nationwide s VUL Product Offering Presentation For Registered Representative Use Only. Not For Public Distribution. *Disclaimer: Regulations do NOT allow unlike products to be compared, so this demonstration CANNOT be given to customers under any circumstances. This piece is highlighting a feature available on Nationwide s illustration software.

2 Nationwide VUL Product Offering NFM-11583AO.1 (5.14) For Broker Dealer Use Only 1

3 IMPORTANT DISCLOSURES Both product prospectuses and underlying fund prospectuses for variable universal life insurance can be obtained by writing to Nationwide Life Insurance Company, P.O. Box , Columbus, Ohio Clients should carefully consider the fund s objectives, risks, charges and expenses. As your clients personal situations change (i.e., marriage, birth of a child or job promotion), so will their life insurance needs. Care should be taken to ensure these strategies and products are suitable for their long-term life insurance needs. Clients should weigh their objectives and time horizon as well as any associated costs before making a purchasing decision. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as sex, health and age, underlying fund charges and expenses, and additional charges for riders that customize a policy to fi t individual needs. Variable universal life insurance is an investment, so market volatility could mean your clients need to put more premium in at some point and can result in the possible loss of principal Guarantees are subject to the claims paying ability of Nationwide Insurance Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor for variable life insurance policies is Nationwide Investment Services Corporation, member FINRA. In MI Only: Nationwide Investment Svcs. Corporation. Nationwide, the Nationwide framemark, Nationwide Financial Network and On Your Side are service marks of Nationwide Mutual Insurance Company Nationwide Financial Services, Inc. All rights reserved The Leaders Group is not affiliated with Nationwide or any of its subsidiaries. 2

4 IMPORTANT BENCHMARKING INFORMATION All competitive information is believed to be current as of April Information was compiled from the latest company software. AXA AEGIS 7.9.3; Prudential using WinFlex web version ; Lincoln 16.0; Pacific Life ; John Hancock 9.0.1; Minnesota Life s web based software; John Hancock ; Nationwide All information presented is reliable as at the date of comparison and Nationwide has made every effort to make sure it is reliable; however, it's possible that there are differences between the products compared which are not reflected and/or of which we are unaware. For this reason, it's completeness and accuracy cannot be guaranteed. These are mere hypothetical scenarios and not intended to represent any specific client or situation.

5 AGENDA Variable Universal Life Market Trends - Market Share - Product Trends Nationwide's YourLife Protection VUL - Product & Competitive View - Sales Applications - Policy Management Nationwide's YourLife Accumulation VUL - Product & Competitive View - Sales Applications - Policy Management Nationwide's Long Term Care Rider - LTC Rider - Rider Comparison 4

6 LIFE SALES BY PRODUCT: 2013 YEAR ENDS: UL REPRESENTS 38%, VUL 7% Market Share History by Product Type

7 VUL MARKET TRENDS VUL Sales Represent 7% of Total Life Sales Ending (4Q 13) and 6% (4Q 12) per LIMRA Hypothetical Question: Were Declines in VUL Sales Magnified by: - Market Volatility after 9/ ? - Market Correction in 2008? - Consumer Reactions: flight to safety? - Indexed UL as Alternative for life insurance accumulation? Hypothetical Question: Could slight Increase in VUL Sales for 2013 be attributed to: - Some Companies re-pricing VUL with NLG? - Stock Market Returns in 2013? - Opportunity for unlimited growth in VUL with no cap limits as seen on IUL? Industry Product Trends - Addition of Chronic Illness Riders, Accelerated Death Benefit Riders - Fixed Account Enhancements & Promotions - Policy Management Programs which Monitor Policy - Addition of Optional Death Benefit Guarantees (NLG Riders) 6

8 NATIONWIDE S YOU RE LIFE PROTECTION VUL Nationwide s YourLife Protection VUL Highlights: Optional Lifetime Extended Death Benefit Guarantee Rider (EDBG) - Flexibility: Dial the Duration from yr 20 to age 120; Dial the Percentage: 50% to 100% - Required Allocations: Asset Allocation Funds or Fixed Account - EDBG is Premium Based Design (not shadow account) - EDBG offers Unlimited Catch-Up (Cumulative missed premiums) Advanced Pay Premium EDBG: This is different from EDBG option. Advanced Pay Premium EDBG features discounted price if total cumulative premiums are paid within the first 10 years. Therefore, any catch up premium must also be made during the first 10 years. Table C to Standard When using EDBG rider, software allows comparisons to: GUL, and IUL Policy Management: Automated Premium Monitor 7

9 NATIONWIDE YOURLIFE PROTECTION VUL PRICE Nationwide YourLife Protection using our Optional Extended Death Benefit Guarantee Rider: Strengths Ages Level Pay Premium Patterns 10 Pays Premium (Advanced Pay Premium EDBG) Weakness 1035 s or Single Premium (SP) 1035 s or SP with Level Premium Solves Short Pays: 2 Pay, 3 Pay, 5 Pay 8

10 PROTECTION VUL BENCHMARKING Protection VUL Extended Death Benefit Solves: Male, 55, NT, 10 Pay, $1,000,000 DB, NLG to age 100 Male, 55, NTP, Level Pay to age 100, $1,000,000 DB, NLG to age 100 9

11 PROTECTION VUL BENCHMARKING Protection VUL Extended Death Benefit Solves: Male, NTP, 55, Single Premium, $1,000,000 DB, NLG to age

12 PROTECTION VUL ILLUSTRATION INPUT SCREEN View of Advisor Input Screens: Male, 45, NTP, $500,000 Face; EDBG duration to age

13 PROTECTION VUL CATCH-UP PREMIUM SALES IDEA Addition of optional Extended Death Benefit Guarantee Rider 12

14 NATIONWIDE POLICY MANAGEMENT How can offering Policy Management programs be helpful in servicing YourLife Protection VUL policies? Automated Premium Monitor: (APM) If Nationwide s Extended Death Benefit Guarantee Rider (EDBG) is selected on Protection VUL, or on our Indexed UL, this service communicates the status of the guarantee Automated Income Option: (AIM) In payout phase communicate status of income compared to targeted objective Automated 2/1 Switch Notification: In payout phase we send notification of option to switch from Death Benefit Option 2 to Option 1 as issued (to help maximize income) 13

15 NATIONWIDE S ACCUMULATION VUL Nationwide s Accumulation VUL Highlights: Funds, Funds, Funds: See our Latest Fund Performance No M/E charges current basis Enhanced DCA Program: 8% (reviewed quarterly and subject to change on a quarterly basis) Customer Loyalty Credit beginning in yr. 11 (0.20 % non-guaranteed) Ability to Direct Policy Charges Advanced Premium Deposit Account (total premium limit $250,000) Policy Management Features 14

16 NATIONWIDE YOURLIFE ACCUMULATION VUL PRICE Nationwide Accum VUL Income Solves: Strengths Ages Recurring premium of $10,000+ per year Min Non-Mec Option 1 (Level) DB, especially if solve at least $500k+ Large short pays (ex. $50,000 per year, for 5 Pay) Weakness Under age 35 Option 2/1 Death Benefit Solves for Maximum Income Lower bands (under $500k DB) Females 15

17 ACCUMULATION VUL BENCHMARKING OPT 1 DB Male, 45, NTP, $50k premium 10 yrs, Income ages Option 1 Death Benefit Male, 45, NTP, $100k premium 5 yrs, Income ages Option 1 Death Benefit 16

18 ACCUMULATION VUL BENCHMARKING OPT 2/1 DB Male, 45, NTP, $10k premium 20 yrs, Income ages Option 2/1 Death Benefit Male, 45, NTP, $50k premium 10- yrs, Income ages ages Option 2/1 Death Benefit 17

19 ACCUM VUL SALES APPLICATIONS Recognize Accumulation VUL Appeals to Specialized Market Appeal to Select Group of fadvisors Appeal to Select Group of Clients Using Life Insurance to Supplement Retirement Income Changes in Federal Tax Laws: Comparing 2012 to

20 LIFE ILLUSTRATOR SOFTWARE PERSONALIZEDSALES SALES IDEAS 2 sales ideas can be incorporated into the illustration output of Life Illustrator: o Insurance Based Retirement Plan o VUL as a ROTH IRA Supplement 19

21 NATIONWIDE POLICY MANAGEMENT How can offering Policy Management programs be helpful in servicing YourLife Accumulation VUL policies? Automated Income Option: (AIM) In payout phase communicate status of income compared to targeted objective Automated 2/1 Switch Notification: Send notification that have option to switch Death benefit to Option 1 as illustrated at issue (to help maximize income) Overloan Lapse Protection ti Benefit: protects t you re policy from terminating ti when you have taken loans; there are certain requirements to invoke it, and there is no charge until you do 20

22 ACCUM VUL SALES APPLICATIONS Nationwide Policy Management 21

23 Nationwide Long Term Care Rider Long Term Care rider Indemnity style tax-free payments made directly to the policy owner, and no bills or receipts need to be submitted Eligibility Requirements unable to perform two or more of the activities of daily living for a period of 90 days (elimination period); or have a cognitive impairment Qualified LTC Services include Nursing Home Care, Home Health Care and Hospice, Assisted Living, and Adult Day Care Monthly Benefit is the lesser of: - 2% of the long-term care specified amount or - Daily amount allowed by HIPAA ($330/day in 2014) x number of days in the month International Claims Eligible to Collect benefits outside United States subject to certain provisions 22 For Insurance professional use only

24 COMPARING INDEMNITY STYLE LONG TERM CARE RIDERS TO CHRONIC ILLNESS RIDERS IUL Indemnity Style LTC and Chronic Illness Riders Premium for Residual Pays for Pays for Proof of Billable Rider is due Death Permanent Temporary Services beginning Benefit* Conditions Conditions Required Each Month Nationwide At issue Yes Yes Yes No AXA At issue Yes Yes Yes No Minnesota Life At issue Yes Yes Yes Yes Transamerica At issue Yes Yes Yes Yes Prudential At Issue No Yes No No Pacific Life At acceleration No Yes No No National Life At acceleration No Yes No No AVIVA At acceleration No Yes No No * Residual Death Benefit in Excess of Initial LTC Face Amount For Insurance professional use only 23

25 QUESTIONS OR COMMENTS 24