Business Underwriters Associates, LLC

Prudential: Improved VUL Protector No-lapse Guarantee Pricing

08-15-2022

Starting August 15, Prudential's VUL Protector no-lapse guarantee pricing will be improving (except in NY). VUL Protector provides the same great protection, cash value accumulation potential, meaningful no-lapse guarantees, and diverse underlying investment options. Only now, the new pricing makes VUL Protector a more competitive option for clients looking to balance the security they need with the potential to build cash value.

What's changing: As an example, for $1M of Lifetime No-Lapse Guarantee Death Benefit the average decrease is roughly:

  • Single Pay Scenarios: 5% lower
  • 10 Pay Scenarios:  8% lower
  • All Pay Scenarios:  5% lower

(based on ages 45, 55, 65 and the top 4 underwriting classes)

The following rules apply to any request for New Business, Term Conversion, or OPAI (Option to Purchase Additional Insurance) Conversion.

TRANSITION RULES 

  • August 15, 2022 (Ready to Sell Date1 ): New Rates for the repriced product are in effect. All applications signed and dated1 on or after August 15, 2022, will receive New Rates.
  • August 19, 2022 (Home Office Receipt Date1 ): Last day that an application can be received in the Home Office with Old Rates.
  • October 28, 2022 (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).
  • October 28, 2022 (1035 Exchange Date1 ): Cases involving 1035 exchange must be initiated/started by October 28, 2022, 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 bemade 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 liveapplication by August 15, 2022.

REQUESTS FOR NEW RATES

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

  • Any pending case or issued policy that is not yet delivered with an application date prior to the state introduction date can be changed to New Rates, as long as the request for change is made on or afterthe state introduction date. Please note: For these cases if the date of birth is more than 6 months prior to the state introduction date, you cannot backdate the policy to save age with a request for the new product version.
  • An existing PruLife VUL Protector 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 and policy date. The written request must be submitted on or after the state introduction date with a matching illustration, revised Product Disclosure form, confirmation of billed premium 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

  • Normal backdating rules apply, meaning that the new policy date can be backdated up to six months prior tothe application date. A policy with New Rates can be dated prior to the state introduction date as long as theapplication meets the requirements in the TRANSITION RULES above.
  • Please note: If the date of birth is more than 6 months prior to the state introduction date, you cannot backdate the policy to save age with a request for the new product version.

TERM CONVERSIONS

  • Old or New Rates can be issued if the convertible period ends prior to the state approval date and the application date is after the state approval date but within 31 days of the convertible period end date. (Application is dated within the transition period and within the 31 days to the end of the convertible period).
  • Only New Rates can be issued if the term conversion is requested after the state approval date and the application date is outside of 31 days after the convertible period end date.

 

1 Definition of “date”:

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

  • Pru Advisors COD eLife - Date the Authorization, Acknowledgement, and Limited Insurance Agreement form and Variable Contract Acknowledgement 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 toRelease Information form, and the Limited Insurance Agreement form

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