Supplemental Retirement Income

  • While life insurance is not a retirement strategy, it can help provide the opportunity for supplemental financial support in retirement.  (p23-24)

2018 11-12 – NAIFA / AdvisorToday – Bridging the Gap: An understanding of the potential uses for permanent life insurance can help clients see it as a tool to help fill gaps in their portfolio, By Jason Wellmann – 53p

  • (p13) – Matthew DeSantos – LSW’s Senior Vice-President of Distribution and Business Development (himself a former insurance agent) – DOC 792 – p27
    • Q We were talking yesterday about the ability to use the Provider and Paragon products as supplemental retirement income sources. Do you remember that?
    • A Yes — one of the benefits of life insurance.
    • Q And you testified that LSW refers to the Provider and Paragon products as providing supplemental retirement income normally in those types of marketing pieces; correct?
    • A We do have marketing pieces that refer to the ability to be supplemental retirement income, yes.
  • (p15-16)
    • A It is not the marketing strategy. It is a marketing strategy. That’s a nuance that’s an important one to us.
    • Q So the important nuance is that it is a marketing strategy, not the marketing strategy? That’s your testimony?

—  2014 0423 – DOC 812 – Trial Transcript – Day 10 – Walker v LSW – Life Insurance Company of the Southwest  – 194p  —  [BonkNote]

  • The undersigned companies present these comments in response to the NAIC IUL Illustrations (A) Subcommittee request for comments on the exposed draft of the ACLI recommended changes to AG49.
  • During the call a comment was made that having examples showing the impact of the three different loan arbitrage options would help regulators understand the impacts of each option. Below we have provided a summary table of the work we have done quantifying the impact of each loan option on a hypothetical illustrated scenario for supplemental retirement income.
  • Illustration of Loan Options
    Issue age 55
    $35,000 annual premium for 15 years
    20 years of annual loans starting in policy year 16
    6% Index Interest Credit – Option 1 & 2 (Option 3 only 5.5%) ; 5% Loan Charge

From

Seth Detert, Securian Financial
Pete Rothermel, Nationwide
Jacqueline Fallon, Penn Mutual Life Insurance Co
Seth Harlow, Mutual of Omaha

2020 0612 – Letter – to NAIC Life Actuarial (A) Task Force – Attachment Two-D – (p6-93 – 6-94)

  • 49 – Robert Rikard:
    • Supplemental Retirement Income

2025 0624 – LIFE180 / Chris Kirkpatrick – Interview With IUL Litigation Attorney LIVE  —  [Robert Rikard]  —  [VIDEO-YouTube-01:19:10]   —   [BonkNote]

  • Re: Menu of Options – IUL Illustrations – May 24, 2019, 13 through16
  • The most important number in the marketing of IUL products is one of three values from the current side of the illustration:
    • The maximum “income” or annual distribution (whether withdrawal or loan) over a period of years corresponding to a period of retirement for a supplemental retirement income marketing approach.
    • p6-1136, Attachment Twenty-Four-F, 2019 0702 – Letter – Stephen J. OBrien to NAIC – LATF  – Menu of Options – 4p

—  Stephen J. O’Brien, FSA, MAAA, recently retired product development actuary with 10 years of experience in the pricing and design of IUL products and over 30 years of individual life insurance development.

2019-2, NAIC Proceedings – Life Actuarial (A) Task Force – p6-1136, Attachment Twenty-Four-F

  • p42 – 06 – Variable Universal Life – supplemental retirement income focused
  • p46 – Product Type Descriptions (LIMRA Definitions)
    • Death Benefit Guarantee Focused Products: A UL or VUL product developed specifically for the lifetime death benefit guarantee
      market that features lifetime or near lifetime no-lapse guarantees either through a rider or as part of the base policy
    • Current Assumption or Cash Accumulation Product Types: A UL or VUL product that is primarily marketed for low cost permanent death benefit protection and/or accumulation of cash values for supplemental retirement planning purposes.

2015 – SOA – Flexible Premium Universal Life Products Lapse/Surrender and Premium Persistency Experience – 2009-2013, 2009-13-universal-life-products – Society of Actuaries – 47p – https://www.soa.org/493467/globalassets/assets/files/resources/research-report/2018/2009-13-universal-life-products.pdf

  • This may be the due to the fact that a key market for VUL products is pre-retirees (as a supplemental retirement income vehicle).
  • Presumably some of these policyholders would eventually be accessing their cash values in retirement – either through partials withdrawals or possibly a full surrender.
  • Today, LIMRA sales surveys indicate that approximately 85 percent of new VUL premium is going into the cash-accumulation-focused product designs. 

2007 – SOA – U.S. Individual Life Insurance Persistency Update: A Joint Study Sponsored by LIMRA International and the Society of Actuaries, research-2003-us-life-update – Society of Actuaries – 85p – https://www.soa.org/4937e7/globalassets/assets/files/research/exp-study/research-2003-us-life-update.pdf