Indexed Universal Life Caps

Transcription

1 Indexed Universal Life Caps Effective March 15, 2013, the caps on FG Life-Elite II will be changing as follows: Cap Illustrative Rate 100% Participation Annual Point-to-Point 14.75% 8.32% 140% Participation Annual Point-to-Point 11.75% 7.85% Monthly Point-to-Point 5.00% 8.46% Effective March 15, 2013, the caps on FG Life-Choice II will be changing as follows: Cap Illustrative Rate 100% Participation Annual Point-to-Point 10.50% 6.70% 140% Participation Annual Point-to-Point 9.00% 6.26% Fixed Account Rate 4.00% Please Note: There were no cap changes made to FG Life-Gold, FG Life-Elite or FG Life-Choice. Business Transition Rules: Applications signed on or after March 1, 2013 must be illustrated using the max illustrated rates and current caps. Policies with an effective date of March 14, 2013 or after will have their first buy date on April 15, 2013 and will be issued with the new cap rate. Policies with an effective date on or before March 13, 2013 will continue to reflect the current cap for the March 15, 2013 allocation, subsequent buy dates will receive the new cap rates. Software Transition Rules: March 1 o Software will reflect the new caps, fixed rates and maximum illustrated rates for FG Life-Choice II. March 16 o Software will be updated to reflect the new caps, fixed rates and maximum illustrated rates for FG Life-Elite II. Service Center will continue to have the ability to run with the older caps/rates as necessary. If you have any questions about these changes, please contact us at lifesales@fglife.com Fidelity & Guaranty Life is the marketing name for Fidelity & Guaranty Life Insurance Company issuing insurance in the United States outside of New York and, in New York only, Fidelity & Guaranty Life Insurance Company of New York. Each Fidelity & Guaranty Life company is solely responsible for its contractual commitments w w w. f g l i f e. c o m

2 Life Insurance March 2013 Interest Rate Announcement Green = Increase, Red = Decrease, Black = No Change Indexed Universal Life Fixed Interest Current Illustrated Variable Loan Rate Guaranteed Variable Loan Rate Cap Short Term Interest Earning Account Illustrated Rate New Business FG Life-Choice II 100% Participation, APTP 4.00% 4.27% 6.50% 10.50% 4.00% 6.70% FG Life-Choice II 140% Participation, APTP 4.00% 4.27% 6.50% 9.00% 4.00% 6.26% FG Life-Choice II MPTP 4.25% 4.27% 6.50% 4.00% 4.25% 7.19% FG Life-Elite II, 100% Participation, APTP 4.50% 4.27% 5.00% 14.75% 4.50% 8.32% FG Life-Elite II, 140% Participation, APTP 4.50% 4.27% 5.00% 11.75% 4.50% 7.85% FG Life-Elite II MPTP 4.50% 4.27% 5.00% 5.00% 4.50% 8.46% FG Life-Gold, 100% Participation, APTP 4.50% 4.27% 5.50% 12.00% 4.50% 7.35% FG Life-Gold, 100% Participation, APTP, Gold Commodity Option 4.50% 4.27% 5.50% 13.00% 4.50% 8.07% FG Life-Choice, 100% Participation, APTP 4.25% 4.27% 6.50% 11.50% 4.25% 7.08% FG Life-Choice, 140% Participation, APTP 4.25% 4.27% 6.50% 10.00% 4.25% 6.80% FG Life-Elite, 100% Participation, APTP 4.50% 4.27% 5.00% 12.00% 4.50% 7.28% FG Life-Elite, 140% Participation, APTP 4.50% 4.27% 5.00% 10.00% 4.50% 6.80% Renewal Rates FG Life-Elite, 100% Participation, APTP 4.50% 4.27% 5.00% 12.00% 4.50% FG Life-Elite, 140% Participation, APTP 4.50% 4.27% 5.00% 10.00% 4.50% FG Life-Choice, 100% Participation, APTP 4.25% 4.27% 6.50% 11.50% 4.25% FG Life-Choice, 140% Participation, APTP 4.25% 4.27% 6.50% 10.00% 4.25% New Business Transition Rules Applications signed on or after March 1, 2013 must be illustrated using the maximum illustrated rates and current caps. Policies with an effective date of March 14, 2013 or after will have their first buy date on April 15, 2013 and will be issued with the new cap rate. Policies with an effective date on or before March 13, 2013 will continue to reflect the current cap for the March 15, 2013 allocation, subsequent buy dates will receive the new cap rates. APTP = Annual Point to Point, MPTP - Monthly Point to Point All S&P 500 index, unless otherwise noted, Caps/Participation rates subject to change at the discretion of Fidelity & Guaranty Life Insurance Company Fidelity & Guaranty Life is the marketing name of Fidelity & Guaranty Life Insurance Company and, in New York only, Fidelity & Guaranty Life Rates are subject to change. Please refer to SalesLink for most up-to-date information. FOR PRODUCER USE ONLY - NOT FOR USE WITH THE GENERAL PUBLIC

3 Determining Maximum Illustrated Rates One of the most challenging issues an agent faces today when selling a fixed indexed universal life (FIUL) product is determining what illustrated rate should be used in the sale. This choice is critical because the illustrated rate influences the expectations of the purchaser regarding future results. The FIUL purchaser relies upon the agent to use an illustrative rate that is credible and the agent is relying upon the insurance company to do the same in establishing a maximum illustrated rate. When evaluating the reasonableness of a maximum illustrated rate, it is important to understand how the insurance company determined that rate. Did the insurance company use a particular formula in determining the maximum illustrated rate? If so, does the particular formula match how the insurance company actually determines the index credits that translate into interest credited to the FIUL contract? If not, how did the insurance company determine the maximum illustrated rate and why doesn t it match the method used to determine actual index interest credits? Below is an explanation as to how Fidelity & Guaranty Life determines the maximum illustrated rates for its FIUL products: FG Life-Elite II and FG Life-Choice II and FG Life-Gold. What is the maximum illustrated rate for each participation rate strategy? FG Life-Choice II - 100% participation rate, APTP 10.5% cap % FG Life-Choice II - 140% participation rate, APTP 9% cap % FG Life-Choice II - Monthly Point-to-Point 4% cap % FG Life-Elite II - 100% participation rate, APTP 14.75% cap % FG Life-Elite II - 140% participation rate, APTP 11.75% cap % FG Life-Elite II - Monthly Point-to-Point 5% cap % FG Life-Gold - 100% participation rate, APTP, 12% cap % FG Life-Gold - 100% participation rate, APTP Gold commodity, 13% cap % How were the maximum illustrated rates determined? Here are the 4 steps involved in this process: 1. We determined the 25 annual S&P 500 index changes for each of the 12 account allocation buckets (Jan 15th, Feb 15th, etc.) over the look-back period. For the Gold strategy, a 15-year look back period is used. 2. Then we applied the strategy-specific participation rate and current cap to the annual index changes to determine the indexed interest credit that would have been applied to each strategy on each account allocation anniversary during the 25/15 year periods. 3. Next, we calculated the cumulative growth that would have occurred, free of all costs, in each of the 12 account allocation buckets over the 25/15 year lookback periods. 4. Finally we took the average of the 12 account allocation buckets to determine the maximum illustrated rate for each strategy. APTP = Annual Point-to-Point FOR PRODUCER USE ONLY - NOT FOR USE WITH THE GENERAL PUBLIC

4 Fixed Indexed Universal Life State Availability On the following pages is the state availability for FG Life-Gold, FG Life-Choice II and FG Life-Elite II FIUL products, as of February 26, Below are descriptions of riders that may be available on these FIULs as well as a key. If you have any questions, please us at lifesales@fglife.com or call Rider Description ABTI ABCI ADB PITL Accelerated Benefit for Terminal Illness Accelerated Benefit for Critical Illness Accidental Death Benefit Overloan Protection Rider Waiver of Monthly Deduction Primary Insured Term Life Insurance Rider Ultimate Income Rider Up to 100% of the death benefit if the insured is diagnosed with a terminal illness and has an expected life expectancy of less than 24 months. Up to 100% of the death benefit if the insured suffers a critical condition (heart attack, stroke, or are diagnosed with cancer or end-stage renal failure.) This benefit provides an additional death benefit in the event of death of the insured as the result of an accident. Prevents the life insurance contract from lapsing as a result of outstanding policy loans. Keeps policy in force by waiving the monthly charges should the insured, if under age 65, become totally disabled for longer than six months. This rider provides term coverage to optimize your client's death benefit at a minimum cost (available to a limit of up to nine times the face on the base policy). This rider allows your clients to designate how the death benefit will be paid. Instead of a single lump sum at the insured's death, payments may be distributed for years, providing steady income for the beneficiaries. CHILD Child Term Rider This benefit provides level term insurance for the insured's children. X Not Available Not Available A Available - Standard Available - Standard V Available - Variation Available - Variation

5 FG Life-Gold State Base ADB ABTI ABCI CHILD PITL State Base ADB ABTI ABCI CHILD PITL AL X X X X X X X X X MT X X X X X X X X X AK A A A X A A A X A NE A A A X A A A X A AZ A A A X A A A X A NV A A A X A A A X A AR X X X X X X X X X NH A A A X A A A X A CA V X X X A X X X A NJ A A A X A A A X A CO A A A X A A A X X NM A A A X A A A X A CT A A A A A A A A A NY X X X X X X X X X DE X X X X X X X X X NC A A A X A A A X A DC V A A X A A A X A ND A A A X A A A X A FL V A A X A A X X A OH A A A X A A A X A GA A A A X A A A X A OK A A A X A A A X A HI A A A X A A A X A OR A A X X A A A X A ID A A A X A A A X A PA A A A X A A A X A IL A A A X A A A X A RI A A A X A A A X A IN A A A X A A A X A A A A X A A A X A IA A A A X A A A X A SD A A A X A A A X A KS A A A X A A A X A TN A A A X A A A X A KY A A A X A A A X A TX A A A X A A A X A LA A A A X A A A X A UT A A A X A A A X A ME A A A X A A A X A VT A A A X A A A X A MD A A A X A A A X A VA A A A X A A A X A MA A A A X A A A X A WA A A A X A A A X A MI A A A X A A A X A WV A A A X A A A X A MN A A A X A A A X A WI A A A X A A A X A MS X X X X X X X X X WY A A A X A A A X A MO A A A X A A A X A

6 FG Life-Choice II State Base ADB ABTI ABCI CHILD PITL State Base ADB ABTI ABCI CHILD PITL AL X X X X X X X X X MT X X X X X X X X X AK A A A A A A A A A NE A A A A A A A A A AZ X X X X X X X X X NV A A A A A A A A A AR X X X X X X X X X NH A A A A A A A A A CA A X X A A X X A A NJ A A A A A A A A A CO A A A A A A A A A NM A A A A A A A A A CT X X X X X X X X X NY X X X X X X X X X DE X X X X X X X X X NC A A A A A A A A A DC A A A A A A A A A ND X X X X X X X X X FL A A A A A A X A A OH A A A A A A A A A GA A A A A A A A A A OK A A A A A A A A A HI A A A A A A A A A OR A A A A A A A A A ID A A A A A A A A A PA A A A A A A A A A IL A A A A A A A A A RI A A A A A A A A A IN A A A A A A A A A A A A A A A A A A IA A A A A A A A A A SD X X X X X X X X X KS A A A A A A A A A TN A A A A A A A A A KY A A A A A A A A A TX A A A A A A A A A LA A A A A A A A A A UT A A A A A A A A A ME A A A A A A A A A VT A A A A A A A A A MD A A A A A A A A A VA A A A A A A A A A MA A A A A A A A A A WA A A A A A A A A A MI A A A A A A A A A WV A A A A A A A A A MN A A A A A A A A A WI A A A A A A A A A MS X X X X X X X X X WY A A A A A A A A A MO A A A A A A A A A

7 FG Life-Elite II State Base ADB ABTI ABCI CHILD PITL State Base ADB ABTI ABCI CHILD PITL AL X X X X X X X X X MT X X X X X X X X X AK A A A A A A A A A NE A A A A A A A A A AZ X X X X X X X X X NV A A A A A A A A A AR X X X X X X X X X NH A A A A A A A A A CA A X X A A X X A A NJ A A A A A A A A A CO A A A A A A A A A NM A A A A A A A A A CT X X X X X X X X X NY X X X X X X X X X DE X X X X X X X X X NC A A A A A A A A A DC A A A A A A A A A ND X X X X X X X X X FL A A A A A A X A A OH A A A A A A A A A GA A A A A A A A A A OK A A A A A A A A A HI A A A A A A A A A OR A A A A A A A A A ID A A A A A A A A A PA A A A A A A A A A IL A A A A A A A A A RI A A A A A A A A A IN A A A A A A A A A A A A A A A A A A IA A A A A A A A A A SD X X X X X X X X X KS A A A A A A A A A TN A A A A A A A A A KY A A A A A A A A A TX A A A A A A A A A LA A A A A A A A A A UT A A A A A A A A A ME A A A A A A A A A VT A A A A A A A A A MD A A A A A A A A A VA A A A A A A A A A MA A A A A A A A A A WA A A A A A A A A A MI A A A A A A A A A WV A A A A A A A A A MN A A A A A A A A A WI A A A A A A A A A MS X X X X X X X X X WY A A A A A A A A A