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. Nationwide YourLife ® Indexed UL Why Nationwide’s Indexed UL? May, 2012 1 FLM-0802AO.4 For Insurance professional use only.

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Presentation on theme: ". Nationwide YourLife ® Indexed UL Why Nationwide’s Indexed UL? May, 2012 1 FLM-0802AO.4 For Insurance professional use only."— Presentation transcript:

1 . Nationwide YourLife ® Indexed UL Why Nationwide’s Indexed UL? May, FLM-0802AO.4 For Insurance professional use only

2 Nationwide YourLife Indexed UL Life Insurance issued by Nationwide Life Insurance Company and/or Nationwide Life and Annuity Insurance Company. Guarantees are subject to the claims paying ability of Nationwide. As your clients' personal situations change (i.e., marriage, birth of a child or job promotion), so will their life insurance needs. Care should be taken to ensure this product is suitable for their long-term life insurance needs. They should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, and has additional charges for riders that customize a policy to fit their individual needs. Indexed universal life policies are not stock market investments and do not directly participate in any stock or equity investments. Past index performance of an index is no indication of future crediting rates because you are buying an indexed universal life insurance policy does not involve actually purchasing or owning securities or stock, so it’s not the same as investing directly in the stock market and therefore does not receive dividend or capital gains participation. Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value © 2012 Nationwide Financial Services, Inc. All rights reserved 2 FLM-0802AO.4 For Insurance professional use only

3 Nationwide YourLife ® Indexed UL S & P 500 ® is a trademark of Standard & Poor's and has been licensed for use by [Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company]. The [Policy / Nationwide YourLife ® Indexed UL / Nationwide Marathon SM Indexed UL] is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Product. NASDAQ ®, OMX ®, NASDAQ OMX ®, NASDAQ-100 ®, and NASDAQ-100 Index ® are registered trademarks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by [Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company]. The Product has not been passed on by the Corporations as to their legality or suitability. The Product is not issued, endorsed, sold, or promoted by the Corporations. The Corporations make no warranties and bear no liability with respect to the product. The "Dow Jones Industrial Average SM " is a product of Dow Jones Indexes, the marketing name and a licensed trademark of CME Group Index Services LLC ("CME"), and has been licensed for use. "Dow Jones ® ", "Dow Jones Industrial Average SM " and "Dow Jones Indexes" are service marks of Dow Jones Trademark Holdings, LLC ("Dow Jones") and have been licensed for use for certain purposes by Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company. Nationwide's Nationwide YourLife ® Indexed UL based on the Dow Jones Industrial Average SM is not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of trading in such product(s) 3 3 FLM-0802AO.4 For Insurance professional use only

4 Agenda Indexed Universal Life Sales Trends Why is IUL so attractive? Nationwide’s IUL profile How Nationwide’s IUL can fit your clients’ insurance needs? Nationwide Pricing Insights: Income solves, Protection solves (endow), Extended Death Benefit Guarantee (EDBG) Summary and Questions 4 FLM-0802AO.4 For Insurance professional use only

5 IUL Sales Trends 5 Indexed UL products represented just over 5 percent of UL sales 5 years ago and now represent about 25 percent of these sales today 8 of the top 10 UL Market Share leaders now offer an IUL product Nationwide YourLife IUL launched Nov For Insurance professional use only

6 Why is IUL attractive? Consumer Guaranteed Death Benefit Protection Protected from the impact of market losses Potential for growth Producer Meet consumer need No Securities license and CE Compensation Insurance Company Low interest rate environment and volatile equity market Alternative to No Lapse Guarantee UL, Variable Universal Life, and Current Assumption UL 6 6 FLM-0802AO.4 For Insurance professional use only

7 Nationwide’s IUL. 7 FLM-0802AO.4 For Insurance professional use only Current rates, subject to change as frequently as monthly. **Riders may not be available in every state, may be known by different names in certain states are available for an additional charge.

8 8 Nationwide’s IUL - continued FLM-0802AO.4 For Insurance professional use only

9 9 Nationwide’s IUL -New York New York Variations No Rolling Targets No Death Benefit Option 3 No Alternative Loans 9 FLM-0802AO.4 For Insurance professional use only

10 Nationwide Indexed UL Rider Highlights 10 Long Term Care rider Indemnity style – tax-free payments made directly to the policy owner, and no bills or receipts need to be submitted Eligibility Requirements – unable to perform two or more of the activities of daily living for a period of 90 days (elimination period); or have a cognitive impairment Qualified LTC Services include – Nursing Home Care, Home Health Care and Hospice, Assisted Living, and Adult Day Care Monthly Benefit is the lesser of: - 2% of the long-term care specified amount or - Daily amount allowed by HIPAA ($310/day in 2012) x number of days in the month Extended Death Benefit Guarantee rider (EDBG) EDBG Duration – 21 years to Lifetime EDBG Percentage – 50% to 100% of the Specified Amount Cumulative premium requirement; Unlimited catch up (no interest) 100% allocation to Indexed Account only (if EDBG rider elected) Advanced Payment Premium – discounted premium requirement if paid within the first ten policy years Catch Up: Because of our Premium Design - Catch up price is Cumulative Missed premiums (unlike Shadow Account designs you see on NLG UL's, or for AVIVA and Minn Life's IUL) Keep in mind that as an acceleration of the death benefit, the LTC rider payout will reduce both the death benefit and cash surrender values. The Long Term Care rider may be known by different names in different states, may not be available in every state and has an additional charge associated with it. 10 FLM-0802AO.4 For Insurance professional use only

11 Why Nationwide? Monthly Averaging Potential to minimize market timing risk Smooth volatility by averaging returns over 12 points in time vs. 2 Multi-Index Blend S&P 500 ®, NASDAQ-100 ®, Dow Jones Industrial Average SM Performance weighted: 50% (best), 30% (2 nd best), 20% (3 rd ) Takes the guess work out of allocation 140% current Participation Rate* Consider current volatile market Expecting modest market performance – 140% may be ideal * Current rates are subject to change Nationwide may discontinue any index that becomes unavailable (i.e, is no longer published) or the calculation of which is substantially changed. Nationwide may substitute with a comparable index or may adjust the method of calculating Index Segment Interest. 11 FLM-0802AO.4 For Insurance professional use only

12 Coming Soon (June 2012) New Indexed Strategy S&P 500 ® Annual point-to-point * 100% Participation Rate (current & guaranteed) 12% Cap Rate (current) Conditional Return of Premium rider This rider benefit provides upon surrender the greater of net surrender value or a percentage of the cumulative premiums, including 1035 premiums, based on policy year: Policy Years 1-3: 100% Policy Year 4: 95% Policy Year 5: 90% Eligibility requirements and annual premium requirements must be met * Current rates are subject to change 12 FLM-0802AO.4 For Insurance professional use only

13 Which strategy is right for your clients? Annual point-to-point This strategy is a good fit for clients who anticipate steady market growth in the near future 13 FLM-0802AO.4 For Insurance professional use only Monthly Average This strategy may work better for clients who are wary of market volatility and believe it will continue in the near future

14 14 One Year Monthly Averaging Strategy Determining the performance of the underlying Indexes At the end of the segment period, the 12 values are averaged for each index, and compared to the initial values to determine growth. Index A Example : 11, (average) – 10, (initial value) = / 10, = 5.20% growth At the end of the segment period, the 12 values are averaged for each index, and compared to the initial values to determine growth. Index A Example : 11, (average) – 10, (initial value) = / 10, = 5.20% growth Initial values The hypothetical illustration used above are actual/hypothetical figures for the dates indicated, however they may not represent actual results. Past performance is no guarantee of future performance or of values of indexed life insurance. Cap rates are illustrative in nature, are not guaranteed, are subject to change. Cap rates and participation rates may vary. Different time scenarios will produce varying results which could be less favorable or more favorable for depending on the performance of each entity. Indexed universal life policies are not stock market investments and do not directly participate in any stock or equity investments FLM-0802AO.4 For Insurance professional use only

15 Calculating Interest Credited – The power of the weighted Blend and 140% participation rate. 15 * Reference Index Performance Rate FLM-0802AO.4 For Insurance professional use only

16 Applying Participation Rate, Cap, Floor % cap, 0% floor and 140% participation rate are all current rates and subject to change FLM-0802AO.4 For Insurance professional use only

17 Premium Allocated to Indexed Strategy 17 Example Assumes Annual Premium Premium Allocation chart represents one segment created (annual pay or lump sum). Monthly modal premiums will result in twelve segments active at the same time, per interest strategy. Note: Amounts deducted from the Indexed Interest Strategy prior to a segment(s) maturity will not receive interest credited. This includes amounts deducted to pay for policy charges, full or partial surrenders, and/or declared loans FLM-0802AO.4 For Insurance professional use only

18 Incorporate IUL into your Existing Product Solutions 18 Accumulation and Income: Alternative to VUL Alternative to Accumulation UL’s IUL can be used for Protection sales: Alternative to Current Assumption UL Solve to Endow or Solve to Carry ($1) IUL can be used for Death Benefit Protection sales: Alternative to No-Lapse Guaratee UL Alternative to VUL (w/ NLG riders) FLM-0802AO.4 For Insurance professional use only

19 Pricing Insights 19 Accumulation and Income Protection solves (low premium to endow) Extended Death Benefit Guarantee 19 FLM-0802AO.4 For Insurance professional use only

20 IMPORTANT BENCHMARKING INFORMATION: All competitive information is believed to be current as of April Information was compiled from the latest company software. Aviva v , ING v , Lincoln v14.5, Pacific Life v11.04, John Hancock v8.0, Axa v7.1, Penn Mutual 11.1, Nationwide v2.4 and Minnesota Life’s web based software. All information presented is deemed reliable and Nationwide has made every effort to make sure it is accurate; however, it’s possible that there are differences between the products compared which are not reflected and/or of which we are unaware. For this reason, its completeness and accuracy cannot be guaranteed. 20 Disclosure FLM-0802AO.4 For Insurance professional use only

21 Income solve with Withdrawals/Declared Loan Expect Nationwide’s competitiveness to vary when traditional income solves are used 21 FLM-0802AO.4 For Insurance professional use only * 8.30% represents the maximum illustrated rate for Nationwide’s Multi-Index strategy. All other rates represent the carriers default credit rate upon illustration start up

22 Income solve with Withdrawals/Declared Loan Same scenario as previous except for 7.00% credit rate is used for all 22 FLM-0802AO.4 For Insurance professional use only

23 IUL Premium Solves (Endow) Nationwide YourLife Indexed UL will compete well in protection oriented premium solves 23 FLM-0802AO.4 For Insurance professional use only

24 IUL Policy Charges vs. Top IUL competitors Nationwide YourLife Indexed UL generally has lower internal policy charges, especially in early years (thru yr. 20) 24 FLM-0802AO.4 For Insurance professional use only

25 IUL Premium Solves (Endow) Older age example 25 FLM-0802AO.4 For Insurance professional use only Same case, with $100k 1035/Dump In

26 IUL EDBG Rider (NLG rider) Age 55+ for Level Pays & 10 Pays Must Allocate 100% to Indexed Strategy High target premiums for Nationwide IUL w/EDBG vs. competitors Cumulative premium catch up (no interest) 26 FLM-0802AO.4 For Insurance professional use only

27 Quick Summary of Nationwide’s IUL 27 One product to meet many consumer needs: Death Benefit Protection (low premium solves) Accumulation potential Guaranteed Coverage (optional EDBG rider) Long Term Care coverage (optional LTC rider) These riders may be known by different names in different states, may not be in every state and have an additional charge associated with them. FLM-0802AO.4 For Insurance professional use only

28 Quick Summary of Nationwide’s IUL Sweet Spots Low Premium Solves to Endow o Especially when illustrative rates are same or comparable o Wide range of competitiveness (Age 45 – 65) Income Solves o Option 1 DBO (level) more competitive than Option 2 o Alternative loans available EDBG rider flexibility and targets o Cumulative premium catch up (no interest) o 21 yrs to Lifetime NLG and ability to specify 50% to 100% for NLG o Higher target premiums o All premium must be allocated to Index Strategy with the EDBG rider Competitive Target Premiums (2-yr rolling) FLM-0802AO.4 For Insurance professional use only 28

29 29 QUESTIONS? 29 FLM-0802AO.4 For Insurance professional use only

30 Nationwide vs. AVIVA What AVIVA Offers: 2 IUL products (Protection focused with NLG and Accumulation) Offers 5 Strategies: 1 yr Mon Cap, 1 yr Mon Ave weighted Multi blend, 1 yr Monthly Av no blend, 2 yr Point-to-point, and 1 yr Point-to-point 2% true up upon surrender How Nationwide competes with AVIVA: Aviva’s Segment Maturities (not crediting frequency): -1 yr strategies are 5 yr maturities; and 2 yr strategy is 6 yr maturity Higher Current Participation vs. all AVIVA strategies AVIVA has limited 5 yr “catch up” (Restoration period) for EDBG Nationwide has Long Term Care rider, AVIVA does not 30 FLM-0802AO.4 For Insurance professional use only

31 Nationwide vs. Minnesota Life What Minnesota Life Offers: 2 IUL’s (Protection & Accumulation focused) 3 types indexed strategies all Annual Point to Point 1 international Dow Jones World Ex-US, and remaining two S/P 500’s, 1 of S/P’s 500 options has a 140% participation Offer a 3% true up upon surrender (confused as Guaranteed Floor) How Nationwide competes vs. Minnesota Life: Minnesota has a Guaranteed Cap of 0% (Nationwide is 3%) Nationwide has higher current Cap combined with 140% Par rate - Minnesota has 140% current Participation rate with 7.5% current cap on Protection version, 9% current cap on Accum version Minnesota Life utilizes End Point Crediting but does not offer MRFISA (This means any distributions that are deducted from Indexed Strategy account for charges do not receive the index credit at segment maturity) 31 FLM-0802AO.4 For Insurance professional use only

32 Nationwide vs. Pacific Life What Pac Life Offers: 1 IUL with 4 indexed strategies - 1 yr S/P 500, 2 yr S/P 500, a 5 yr S/P 500 uncapped, and 1 yr International blend Pac Life promotes: Premium Financing & Sec 79 Sales applications How Nationwide competes vs. Pacific Life: Pacific Life not eligible for Overloan unless withdraw to basis Nationwide has higher Current Participation vs. all Pacific Life strategies Nationwide Monthly Averaging vs. Pac’s 1yr & 5 year Point-to- Point (with last yr averaged) Nationwide offers optional Long Term Care Rider Nationwide offers optional lifetime EDBG duration 32 FLM-0802AO.4 For Insurance professional use only

33 Nationwide vs. John Hancock What John Hancock offers: Offers two 1 yr annual point-to-point strategies: 1 capped, 1 uncapped and both strategies are S/P 500 Spread: Uncapped option has a 5.5% current spread and 20% guaranteed spread (subtract from indexed return) Offer Non guaranteed Persistency bonus 0.65% yrs 11+ Offer a 2% “true up” upon surrender How Nationwide competes vs. John Hancock: Nationwide offers weighted multi-index blend vs. their S/P only Nationwide offers higher current participation than John Hancock strategies John Hancock not eligible for Overloan unless withdrawn to basis Nationwide offers Monthly Averaging vs. their Annual Point to Points JH’s EDBG maximum duration is to age 75 with a 5 year base 33 FLM-0802AO.4 For Insurance professional use only

34 Nationwide vs. Transamerica What Transamerica Offers (also Western Reserve Life): Two products: 1 Global, 1 Domestic Both Annual Point-to-point Domestic: S&P 500 only Global: Blended (S/P 500, Euro Stoxx 500, Hang Seng) Note: never more than 20% Hang Seng How Nationwide competes vs. Transamerica: Transamerica does not offer LTC rider Nationwide offers higher current participation than Transamerica Transamerica only offers Annual Point-to-point strategies 34 FLM-0802AO.4 For Insurance professional use only

35 Nationwide vs. AXA What AXA Offers: 1 product, 4 strategies Offer two 1 yr Domestic, and one 1 yr International One 3 yr Point-to-Point, Domestic Start and Stop premiums solve capabilities for illustrations In 2011 added 2% true up upon surrender How Nationwide competes vs. AXA: AXA does not offer Alternative Loans AXA does not offer LTC rider on IUL AXA only offers a 5-10 year base NLG Nationwide offers Higher Current Participation vs. AXA’s strategies AXA only offers 1 and 3 yr segment maturities with Annual Point-to- Points or Term End Point vs. our Monthly Averaging AXA does not offer Rolling Target Premiums 35 FLM-0802AO.4 For Insurance professional use only


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