PRODUCT: IUL Protect

COMPANIES: AXA Equitable

BEST RATING: A (Excellent)

AVAILABILITY: Coverage is available through AXA agents and AXA-appointed independent agents.

FOCUS: In recent years, a low interest rate and higher capital requirements have presented interesting challenges for creating low-priced, high-quality life insurance products.

In particular, indexed universal life insurance products have become increasingly complex, “almost to the point where an adviser has no chance of understanding what they’re selling—they just have to trust the illustrations,” says Michael Roscoe, lead director, head of strategy and product development, AXA. “That’s a tough spot to be in.”

But with AXA’s enhanced IUL Protect indexed universal life product, “everything is locked in and the features are guaranteed by the contract—there’s nothing hidden,” Roscoe says. “We are very explicit even in what it costs a client to be able to get into the index.”

For example, the policy includes a “no-math guarantee” to age 90 or for 40 years if the insured purchases the policy before age 50—and if the insured lives past the age of 105, AXA keeps the policy in force at no charge.

“A lot of policies in the market have extended no-lapse guarantees, but most of them have a very complicated way of determining whether that warranty is actually valid,” Roscoe points out. “Ours is straightforward: If you pay a specific premium every year, the warranty is valid. If you miss that premium, you have to catch up by the amount of premium you missed.”

Most unique, however, is IUL Protect’s Extra Interest Credit feature, which delivers direct cash value to clients as interest rates rise. “The products in the marketplace today admittedly don’t have a good handle on what to do when a policy is sold today, and 10 years from now, the client still owns that policy, but interest rates have gone up,” Roscoe says. “There are ways to do it, but they’re not that efficient.”

Under IUL Protect, for every basis point interest rates rise, “we have the opportunity to increase the return on the policy,” Roscoe explains. “We provide an interest credit on top of the index. It’s not an added floor, it’s not a higher cap—it’s an added amount. Nobody else in the world has that that we’re aware of.”

IUL Protect is a traditional indexed universal life policy, which means insureds get access to a fixed rate bucket as well as to an index. “On the index side, they then get access to certain indexes they can tie into markets,” explains Trey Reynolds, head of life distribution, AXA. “This product is built for protection primarily, but it does provide flexibility for those who would like to accumulate cash.”

And it’s customizable in other ways, too: Reynolds points out that about 40% of policies are sold with AXA’s Long-Term Care Services Rider attached, which gives the insured an accelerated life insurance benefit they can use for qualified LTC-related expenses.

Additional optional features include the Children’s Term Insurance Rider, which provides term insurance protection for the insured’s children that can be converted to a permanent insurance policy in the future, without requiring proof of insurability; the Charitable Legacy Rider, which allows the insured to provide an additional life insurance benefit for up to two qualified charities, equal to 1% of the base policy face amount up to $100,000; and the Return of Premium Death Benefit Rider, which enables an insured’s beneficiaries to receive an additional death benefit equal to a percentage of premiums paid.

“AXA is focused on taking a conventional industry and leveraging unconventional thinking, and this is where this product really resonates,” Reynolds says. “We want to make sure we create products that our advisers can sell and that clients can easily understand, and that over time, we can deliver on those promises made by producers.”

UNDERWRITING: IUL Protect goes through the standard underwriting procedure.

MINIMUM PREMIUM: Varies by risk.

TARGET: Individuals age 45-75, but really “anyone who is looking for permanent insurance that offers higher protection at a lower cost, with flexibility in the contract,” Reynolds says.

COVERAGE TERRITORY: All U.S. states except New York, where approval is pending.

CONTACT: 888-292-4636.

Jacquelyn Connelly is IA senior editor.