The Ameritas Advisor II VUL provides death benefit protection in the event a client passes unexpectedly, along with tax-deferred growth.
The Market
Sales of VULs continued to increase from 2018 to 20191. The biggest driver of growth for VULs stemmed from protection-focused consumers, with new premium growing 23% compared to a 10% decrease in accumulation products. In Q2 of 2019, VULs held a 6% market share of total individual life insurance, due in part to investor concern with rising volatility and the specialized usage of VULs.
Why DPL Likes Advisor II VUL
Advisor II VUL provides death benefit protection in the event a client passes unexpectedly, along with tax-deferred growth. Clients can access their accumulation value immediately, as there is no surrender schedule for the product. When clients decide to take income, clients can withdraw up to the total amount of premiums paid in (or cost basis) without paying income taxes on the withdrawals. As is typical with life insurance, there is no income tax owed on the death benefit beneficiaries receive. Preferred loans, beginning year 6 on policy earnings, have a contractual maximum guaranteed spread of 0.50%. This minimizes the impacts of loans against the death benefit that is leftover.
How to Think About Commission-Free VULs
When your client needs:
LIFE INSURANCE: Clients who wish to create a long-term death benefit and lean on their RIA to manage additional cash value will be attracted to the VUL. Although VULs carry market risk, they can allow for the purchase of higher death benefits due to higher potential returns. The flexibility of the VUL also allows the client to make changes to their premium, access their cash value, or change their death benefit value and structure.
LEGACY PLANNING: VULs are attractive options to help clients with legacy planning needs or estate tax concerns. VULs can provide numerous tax benefits during the client’s lifetime, along with the tax-free transfer of assets at death, which is not available with most strategies.
TAX-FREE INCOME: Commission-free VULs allow for some of the highest cash value accumulation opportunities due to the lack of commission and variable structure. The FIFO treatment on withdrawals allows clients to create a potential tax-advantaged cash flow, critical for high net worth clients as well as clients under 59.5 who generally are not able to pull from qualified assets.
Product information sourced directly from: https://www.ameritasdirect.com
1LIMRA, 2019
Non-product information and opinions are not the responsibility of nor verified by Ameritas.
All guarantees are based on the financial strength and claims-paying ability of the issuing insurance company.
DPL and Ameritas are not affiliates. Each company is solely responsible for its own financial condition and contractual obligations.
Ameritas Advisor II VUL (form 4200) is issued by Ameritas Life Insurance Corp. and underwritten by affiliate Ameritas Investment Company, LLC. Variable products are subject to investment risk, including loss of principal. Before investing, carefully consider the investment objectives, risks, charges and expenses and other important information about the policy issuer and underlying investment options. This information can be found in the policy and investment option prospectuses, which are available on ameritasdirect.com. Please read the prospectuses carefully before investing or sending money. Products are not available in NY.
Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® is a registered service mark of affiliate Ameritas Holding Company.