The Ultimate Guide to US insurance strategy:Transamerica’s FFIUL indexed universal life isnurance policy

Transamerica, was founded in 1904 and is a well-known insurance brand in the United States. In 1904, a young entrepreneur who wanted to help those in need of such services established the “Italian Bank,” which later merged with a well-known bank we are familiar with today: Bank of America. Therefore, the Western Life Insurance Company that was acquired was renamed Transamerica. Transamerica has a history of over 90 years and has been ranked among the top 10 life insurance companies in the United States for many consecutive years. TransAmerica (Transamerica Life Insurance Company) operates in more than 10 countries and regions, including the United States, Canada, the Netherlands, the United Kingdom, and Hong Kong. Its financial and credit ratings have reached a basic and stable level and even a “strong debt repayment capacity” rating level. With four “A’s”, Transamerica can boast of itself as one of the top life insurance companies in the United States, and its comprehensive strength is also among the best in the world’s insurance companies. Financial Rating: Comdex 93.

 

Ranking of US Indexed Universal Life Insurance Companies

1. Pacific Life
2. National Life Group
3. TransAmerica Life
4. Minnesota Life
5. Nationwide
6. Zurich
7. Lincoln National Life
8. Prudential (not to be confused with UK-based Prudential)
9. Allianz
10. AXA
11. Voya

The above rankings are from the 2018 Wink® Top Indexed Universal Life Insurance Brands.

Ⅱ.Product Introduction

TransAmerica indexed universal life insurance (IUL) is one of the most advanced life insurance products in the current US insurance market. The main investment focus of its profit account is on globally important stock indices, which are structurally operated to ensure that customers’ invested amounts are not subject to losses (with a 0.75% floor). Customers can also enjoy the growth returns of important stock markets globally, with a high expected investment return. This type of insurance can be used for retirement fund planning, education fund planning, and diversified wealth inheritance planning.

Strategy Options

Fixed Strategy: Guaranteed return rate of 2%.

Index Strategy: Minimum guaranteed return of 0.75%.

 

Ⅲ.Product Features

IUL index universal life insurance combines life insurance protection and savings growth in one plan. When you have this plan, you can receive a high amount of life insurance protection while also enjoying the steady growth of your account.

You can use this account flexibly, making additional contributions at any time, and making withdrawals as needed. Whether or not you are a U.S. tax resident, the use of this account is tax-free and its effectiveness is not affected by changes in your residency status.

Multiple Strategy Options

Depending on market conditions, customers can choose from three different strategies:

Steady Returns Strategy:

20-year S&P index value fluctuations

Based on the past 20 years of annualized return trends from a quantitative model:

The S&P has risen more than fallen over the past 20 years, with an average increase of 5.24% over the period, despite experiencing two major bear markets, the burst of the dot-com bubble and the subprime mortgage crisis.

However, with the IUL’s one-year S&P index strategy, even in a bear market, the value of the investment account is guaranteed not to decline and even slightly increase. In a bull market, it shares in the rise of the stock index. In this way, the account’s average annual growth rate over the same 20-year period can reach 8.01%.

Policy Loan

Standard Loans

Loan interest rate: 2.75% for 1-10 years;

2% for 11 years and above.

Interest offset: 2%.

The policy’s cash value will be affected after the loan is granted. The loan interest rate will be equal to the offset interest rate after 10 years of the policy loan. This type of loan is suitable for the stable economic index strategy environment.

Normally, it takes about 15 business days for the insurance company to receive the customer’s loan application form.

Free Additional Insurance

Overloan Protection Rider Section

To prevent the policy from lapsing, a certain amount of consumer-type life insurance will be purchased us
ing the cash value, ensuring that the customer has death coverage and avoiding taxation.

Accelerated Benefit Rider

If the insured is diagnosed with a terminal illness and has a limited life expectancy, this additional provision provides for an early payout of a portion of the death benefit.

Ⅳ.Case Study

Ms. C is a 47-year-old non-smoker and a corporate executive who considered the potential tax risks she may face in the future. To protect her family’s life and inheritance needs, Ms. C chose to combine American insurance and trust systems for a more comprehensive protection system.

Overview of the Policy:

Case Summary:

When Ms. C is 100 years old and does not withdraw from the policy, the account value of the policy will be $8,382,076, which is 16.8 times the paid premiums, providing a wealthy retirement and wealth inheritance for her children.

If Ms. C begins to withdraw 18 years later, she can withdraw tax-free income of $28,000 per year until she is 100 years old. The total amount of withdrawals is expected to be about $1,008,000. When the client withdraws to 100 years old, there is still $3,054,645 in the policy account that can be inherited by her descendants.