The latest addition to the Accordia product line, Lifetime Foundation, has been available for just over a month. At this early stage in its lifecycle, one thing is clear: Most have not yet identified where this product really hunts. Don’t let the “new and different” nature of this product get in the way of the premium savings that Lifetime Foundation offers versus competitors in the Life Expectancy Guarantee space as well as versus NLG. While it’s not #1 in every cell, it is #1 across a wide cross section when you look beyond the solves baked into Accordia’s software. Read on for some clear examples of the pricing, as well as some tips for getting the most out of this product.
Is Lifetime Foundation the Most Competitive Death Benefit Focused IUL on the Street?
Let’s compare the Lifetime Foundation to a selection of the most competitive death benefit focused products on the market, using 90th percentile illustrative rates and a $1000 at age 105 design. The results are startling. By looking beyond the “stock” solves in Accordia’s software, the Lifetime Foundation delivered premiums that are as much as 15% lower than other Life Expectancy Guarantee products that are currently seeing huge sales numbers and as much as 35% lower than the most competitive NLG products.
How to run “Optimized” Lifetime Foundation Illustrations
As previously mentioned, there is not a “Solve for Premium” option in the Accordia software for this product that will deliver these premiums. At this point, case designers should consider the following:
- Start with an NLG product, solved to the duration of coverage appropriate for the case.
- Discount that premium at least 20%
- Enter that premium manually for the Lifetime Foundation
- Review the results and adjust the premium up or down until the desired duration of coverage is reached.
- Important Notes:
- Based on the cost structure of the Lifetime Foundation, the coverage will typically only need to reach age 95 with a modicum of cash value for the current side to last to maturity.
- On lifetime pay designs, the Required Annual Premium (RAP) feature that supports the guarantees will force a higher premium in the early years of the contract, anywhere from 5 to 30 years. The premium drops at the end of the RAP period, and the total premiums paid over the lifetime of the client will be significantly lower than other products. This RAP premium will likely not come into play in short pays and exchanges.
For a quick example of the design described above, please see the following sample illustrations: