Genesis+ Indexed Universal Life (IUL) targets affluent clients who want to increase their wealth while providing long-term financial security for their loved ones and their companies.
Life insurance coverage and investment growth potential connected to multiple market indices are combined in Genesis+ IUL.
It allows policyholders to modify their payments and investment distributions over time.
We’ll explore the different types of account, fees, and the positives and negatives of this product from Transamerica Life (Bermuda) Ltd.
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Genesis+ Indexed Universal Life Accounts
Genesis IUL Index Account
En product provides several options under this account, such as:
- Global Index Account
- US Market Index Account
- S&P 500 Index Account
- S&P 500 Shariah Index Account
Every option offers varying growth potentials depending on how well the underlying indices perform. It enables policyholders to adjust their investment plans based on their risk appetite and market outlook.
The policyholder’s financial circumstances can be taken into account when adjusting premium contributions.
The Index Account protects against market downturns by guaranteeing a floor rate of 0.00% annually. Because of this feature, the policyholder’s investment is unlikely to lose value even in unfavorable market outcomes.
An extra degree of protection for the policyholder’s investment is offered by a cumulative guarantee of 2.00% annually that takes effect upon complete surrender of the policy.
A persistency bonus, which increases the total return on investment, is offered beginning in the 11th policy year or upon the insured’s 65th birthday.
The policy offers a terminal illness benefit that permits access to money should a serious health problem occur. This comes on top of a death benefit to make sure beneficiaries are financially secured.
Policyholders may borrow against the policy or withdraw cash value.
Genesis IUL Fixed Account
The Fixed Account provides a 4.10% annual lock-in crediting interest rate for the first policy year.
The cash value deposited into this account will yield a guaranteed return at this initial rate.
Policyholders are guaranteed a minimum crediting interest rate of 1.50% annually for the duration of the policy, which guarantees that they will get at least this yield even amid a low-interest backdrop.
The Fixed Account provides protection against market downturns because the funds invested in it are not impacted by them. Because of this, it can be a desirable choice for cautious investors who place a high value on capital preservation.
The same persistency bonus applies. Moreover, policyholders can choose to borrow against or withdraw cash value from the Fixed Account.
Policyholders can diversify their investment strategy by combining the Fixed Account with other indexed account, as they can divide their money between steady returns and growth prospect tied to market indices
Genesis Indexed Universal Life Costs
Each gross premium is subject to a premium charge of 6.00%, with the remaining sum being allocated to the fixed account or index accounts as account value.
The first 15 policy years are subject to monthly expense charges, which differ according to:
- the underwriting class
- issue age
- policy year
- smoking status
- gender
Lower rates could be applied, but the policy schedule outlines the guaranteed maximum monthly expense charge rates.
The cost of insurance rates are assessed up until the insured person turns 121. Such charge represents the risk of covering the insured person’s life.
There is a 1% annual cap appreciation charge for the S&P 500 Index Account, S&P 500 Shariah Index Account, and US Market Index Account. This charge is subtracted from the account value every month on the policy date.
Surrender charges will be incurred if the policy is fully surrendered, terminated, or withdrawals (apart from fee-free withdrawals) are made during the first 15 years.
Starting in Year 6, there is no surrender fee for withdrawals of up to 10% of the account value per year. The sum assured will be trimmed by these withdrawals, but not below a predetermined minimum.
Pros and cons of Genesis+ Indexed Universal Life
- Policyholders are permitted to modify premiums to reflect their changing financial circumstances.
- The policy offers the opportunity for larger returns since it is linked to market indices.
- During market downturns, a guaranteed floor rate serves as an assurance that the cash value won’t drop.
- Upon complete policy surrender, an annual guarantee is applied, providing additional investment security.
- The policy offers beneficiaries a death benefit.
- The policy might provide a bonus to recognize sustained dedication.
- The death benefit is normally tax-free for beneficiaries, and cash value growth is tax-deferred.
- Liquidity is provided by policyholders’ ability to withdraw or borrow against the cash value.
- Because the product is meant to be held for a long time, people looking for immediate advantages might find it less appropriate.
- Despite a guaranteed floor rate, market performance still determines growth potential; weak index performance may restrict growth.
- There are so many fees to consider.
- There are loans available against the policy, but the annual interest rate is 8%. The death benefit may be diminished if this interest is not controlled or paid back.
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