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Life Insurance

Changes to the 7702 Definition of Life insurance were enacted with the passage of the Consolidated Appropriations Act on 12/21/2020. This change lowered the interest rates and increased the premium limits defined by the regulation. This includes the Guideline Level, Guideline Single, and 7Pay TAMRA premium limits.

While this was effective for policies issued on or after 1/1/2021, the industry has been scrambling to make the necessary changes to administration and illustration systems to support the revised interest rates and premium limits. We are excited to announce that as of 4/1 the revised premium limits are now available in ExpertIllustrator and their administration system for Signature Performance IUL. Changes will be made to additional products in the coming months so stay tuned for additional product updates.

For Signature Performance IUL policies that were issued 1/1/2021 to 3/31/2021, the correct premium limits are now available in the administration system even though they were not available in ExpertIllustrator when the policy was sold. If you sold a Signature Performance IUL that was running up against the premium limits or was a minimum death benefit solve, then you can now go into ExpertIllustrator and determine the new premium funding limits. If the case you sold was near the minimum or target premium, then this should not have any impact on the illustration

What Is the Impact on Signature Performance IUL Illustrations 

Generally, increases in premium limits mean that more premiums can be paid into Signature Performance IUL for a given death benefit. Or in other words, a lower death benefit can be selected for a given amount of premium leading to higher accumulation and income values. The impact will vary by age, face amount, and underwriting class so they encourage you to rerun any recent illustrations where premium limits came into play.  Increases in GSP, GLP, and TAMRA premiums will be greater where mortality is lower. 

Which means:

  • Increases will be greater at younger issue ages than old issue ages
  • Increases will be greater for non-nicotine users than nicotine users
  • Increases will be greater for females than males

For GLP only, increases will be greater with Increasing DB (Opt B) than Level DB (Opt A). GSP and TAMRA do not differ by Death Benefit option.TAMRA premium increases will be greater than GSP or GLP increases.

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