In a post not long ago I mentioned that New York was poised to approve the sale of indexed universal life, a form of universal life that uses market indexes to determine actual cash value above the guarantee.
Well, they’re off to the races. I ran a spreadsheet for both indexed universal life and second to die indexed universal life today and New York is on the map and Bankers Life of New York, part of the Aviva Group, is leading the way.
I’ve got to tell you that what I like most about the indexed universal life products, unlike variable universal life, is that they have a pretty nice potential upside in cash value, and the guarantees are great and there really is no downside as long as you pay the guaranteed level planned premium. Since all of my sales are based solidly on guarantees, my clients get the best of both worlds with this type of product.
I will, as I have all along, sell the guarantees and leave the assumptions alone. Maybe someone will make money there, but I want my customers to be happy about having the lowest cost guaranteed products. This is after all, a life insurance policy and the focus should be on providing a life insurance death benefit. If, 30 years down the road, there is cash value there, that’s ok with me. That cash value doesn’t add anything to the policy that is necessary to maintain the death benefit.
Bottom line. Hurray for New York and for Bankers Life leading the way.