METLIFE launches enhanced variable universal life policy
Product Offers Greater Potential for Cash Value Accumulation and Income Distribution
NEW YORK.– MetLife announced the launch of its enhanced variable universal life policy, Equity Advantage Variable Universal Life, based on the 2001 Commissioners’ Standard Ordinary (CSO) Mortality Table. In addition to providing affordable life insurance coverage, the new product offers the potential for long-term cash value accumulation and income distribution through improved features and also provides policyholders with guaranteed life insurance protection options.
The new Equity Advantage VUL is a permanent life insurance policy that offers individuals a vehicle to set aside additional money on a tax-deferred basis, as well as the opportunity to help manage the risks of volatile investment markets, with guaranteed insurance protection. The base policy offers Guaranteed Minimum Death Benefit (GMDB) options that provide a guaranteed death benefit for 5 years, 20 years or until age 65 regardless of investment performance. With the policy’s new Guaranteed Minimum Death Benefit (GMDB) Rider, which is available for an additional charge, clients can select additional guarantees until age 85 or for their lifetime.
Equity Advantage VUL is designed to build cash value that can be systematically withdrawn and borrowed from the policy to provide the policy owner with a tax advantaged supplemental income stream. Withdrawals and policy loans reduce the death benefit and accumulated cash value.
“The new Equity Advantage VUL offers policyholders the best of both worlds as they seek to protect their loved ones: the opportunity for potential supplemental income as well as guaranteed long-term insurance protection,” says Gene L. Lunman, senior vice president and head of MetLife’s Individual Business Product Management Group. “The policy’s enhanced features have the potential to increase the policy’s rate of return by reducing fees and rewarding over-funding. These improvements work with our state-of-the-art riders to offer policyholders the coverage they need for their families.”
Equity Advantage VUL features MetLife’s Guaranteed Survivor Income Benefit (GSIB) Rider, available for an additional charge, which provides beneficiaries the option to receive death proceeds in the form of an enhanced monthly income rather than a lump sum payment. This rider provides beneficiaries with a guaranteed monthly income they’ll never outlive. The maximum death benefit which can be applied to the GSIB is $5 million.
The policy’s enhanced cash accumulation and distribution features maximize the opportunity to have a potential income stream by offering reduced fees and increased flexibility. Some of those features include:
A reduced sales charge for premiums paid over the target premium. Premiums paid up to the target premium are subject to sales charges and taxes of 5.5%. Premiums paid above the target are only subject to taxes of 3.25%.
An enhanced tiered Mortality and Expense (M&E) risk charge structure, whereby the M&E charges are reduced as the cash value of the policy reaches/increases to certain levels, in addition to being reduced the longer the policy remains in-force.
1035 exchanges with the ability to carry over outstanding loans to the new policy. Clients may exchange a current insurance policy for a new policy insuring the same person without paying current income tax on gains earned due to terminating a policy loan on the original policy.
A Cash Value Accumulation Test (CVAT) definition of life insurance and the Guideline Premium Test. The addition of the CVAT allows for heavier funding of the policy at purchase or within its early years for cash value accumulation purposes.
After the policy has been in effect for 10 years, policyholders can take advantage of guaranteed zero net-cost policy loans.
The surrender charge period has been reduced from 15 to 10 years (11 years in Florida), offering clients the opportunity to access their cash value surrender charge-free earlier.
The new Overloan Protection Rider can prevent the policy from lapsing due to an excessive loan on the policy. If the rider requirements are met, the rider provides the policyholder with a reduced paid up policy, helping policyholders potentially prevent the adverse consequences that can result from a policy lapsing with loans. A one-time charge is assessed when the rider is exercised.
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