Business Underwriters Associates, LLC

Prudential - Improved Pricing and New Features on Founders Plus IUL and Essential UL

04-24-2023

As of April 24, 2023, Founders Plus IUL and Essential UL will be improved with a new and generally lower charge structure. Plus, Prudential has made other valuable changes.

Founders Plus Indexed UL

First, Founders Plus has a new, clearer name: PruLife® Founders Plus Indexed UL. Founders Plus offers upside potential with downside protection through indexed or fixed account crediting, meaningful guarantees, and living benefit options. New Pricing Pricing will be improved with a new and generally lower charge structure, especially in shorter pay scenarios, making 1035 exchanges and mirrored loans more attractive. For example, for $1M of death benefit the average decrease is roughly:

  • Single-Pay Scnearios:  20% lower
  • 10-Pay Scenarios: 11% lower
  • All Pay Scenarios: 1% lower
  • (all scenarios above are based on $1 at 120 premium solve using the S&P 500 Account at 5.08% (ages 45, 55, 65, 75) and the top 4 underwriting classes)

Founders Plus will be compliant with the anticipated revision of AG-49 A illustrated rates starting 05/01/23 and will use the S&P 500 Index Account as the default option instead of the Goldman Sachs Voyager Index.  Please reference the AG-49 A FAQ for more details

 

Essential UL

Essential UL, our simplest version of permanent life insurance, provides cost-effective death benefit protection, conservative cash value accumulation potential, meaningful guarantees, and options for living benefits. New Pricing Pricing on EUL will be improved with a new and generally lower charge structure, especially in shorter pay scenarios, making asset repositioning and 1035 exchanges more affordable. For example, for $1M of death benefit the average decrease is roughly:

  • Single-Pay Scenarios 10% lower
  • 10-Pay Scenarios 2% lower
  • All Pay Scenarios 4% higher
  • (all scenarios above are based on $1 at 120 premium solve using the Fixed Account at 3.45% (ages 45, 55, 65 and 75) and the top 4 underwriting classes.)

 

Additional Important News

Both Founders Plus IUL and Essential UL now offer an updated Premium Deposit Account. Allows clients to make a single payment into an account that pays guaranteed interest and premiums over a 2 – 10-year period. This updated PDA is the same version offered with FlexGuard Life, VUL Protector, and SVUL Protector.

 

Transition Rules

On Monday, April 24, 2023, the revised Prulife® Founder Plus Indexed UL & PruLife Essential UL® will be introduced. The following rules apply to any request for New Business, Term Conversion, or OPAI (Option to Purchase Additional Insurance) Conversion.

IMPORTANT DATES (subject to state approval)

  • April 24, 2023 (Ready to Sell Date1 ): New Rates for the repriced product are in effect. All applications signed and dated1 on or after April 24, 2023, will receive New Rates.
  • April 28, 2023 (Home Office Receipt Date1 ): Last day that an application can be received in the Home Office with Old Rates.
  • June 16, 2023 (Placement Date1 ): Last day that a pending case can be placed with old rates. All delivery requirements must be received in good order by end of business day (4 PM EST).
  • June 16, 2023 (1035 Exchange Date1 ): Cases involving 1035 exchange must be initiated/started by June 16, 2023, to retain old rates. If the 1035 initiation/start deadline is met, the policy will not be subject to an additional placement deadline.

REQUESTS FOR OLD RATES DURING THE TRANSITION PERIOD

  • Applications with Pending Ownership Arrangements: Updates to applications as part of establishing a trust or finalizing the ownership arrangement can be made after the application deadlines outlined in the Transition Rules. However, these cases must still meet the application deadlines for the original application and comply with all other deadlines outlined in the Transition Rules
  •  Informal/Inquiry Applications: Informal/Inquiry applications will not be eligible for Old Rates unless replaced by a live application signed by April 23, 2023 and received in the Home Office by April 28, 2023.

REQUESTS FOR NEW RATES

Requests for changes to the New Rates will be permitted consistent with the following current practice for these situations:

  • Any pending case or issued policy that is not yet delivered with an application date prior to the Ready to Sell Date can be changed to New Rates, as long as the request for change is made on or after the Ready to Sell Date. If you are planning to backdate to save age, please refer to the Backdating section below for additional restrictions for cases requesting new rates.
  • An existing Founder Plus or Essential UL policy that has been delivered, is inforce, and is still within its 90-day New Business Change Period can be changed to New Rates and keep the original policy number, as long as the policy is in compliance with the Backdating section below. The written request must be submitted on or after the Ready to Sell Date with a matching illustration with the new rates. Existing policies that are outside the 90-day New Business Change Period cannot be changed to the New Rates.
  • During the 90-day New Business Change Period, Face Amount increases with old rates will not be allowed. The 90-day New Business Change Period is defined as the 90-day period beginning on the later of the policy date or issue date. For a contractual Term Conversion that is issued after the end of the original conversion period, the change period is defined as the 90-day period beginning on the policy date.

BACKDATING

  • A policy cannot be backdated more than 6 months prior to the application date.
  • A policy with New Rates can be dated prior to the state introduction date as long as the application meets the requirements in the IMPORTANT DATES above.
  • The policy effective date cannot be beyond 6 months prior to the Ready to Sell Date. This applies to all policies, including all applications and policies with in the 90-day new business change period requesting new rates. 

TERM CONVERSIONS

  • Term Conversions are subject to the same dates in the Important Dates section above. They must also be conversion eligible at the time of application.

 

1 Definition of “date”:

  • Pru Advisors Prepaid eLife - Date on the form of payment and the Authorization, Acknowledgment and Limited Insurance Agreement form

  • Pru Advisors COD eLife - Date the Authorization, Acknowledgment, and Limited Insurance Agreement form and Variable Contract Acknowledgment form (if applicable) were signed by the client

  • Pru Advisors or Third-Party Full Application case - Date the Part 1 of application (ORD 96200) was signed

  • Third Party Prepaid Xpress QuickForm case - Date on the form of payment, the Authorization to Release Information form, and the Limited Insurance Agreement form

  • Third Party COD Xpress QuickForm case - Date the Authorization to Release Information form and Variable Contract Acknowledgment form (if applicable) were signed by the client