Press Releases
Transamerica Occidental Life Launches New Index Universal Life Product
Index interest based in part on S&P 500® Index offers potential for greater cash accumulation than traditional universal life
LOS ANGELES (Feb. 5, 2007) - Transamerica Occidental Life Insurance Company (TOLIC) has introduced TransIndexSM UL, an individual, flexible-premium index universal life policy. TransIndex UL provides death benefit protection and accumulates cash value using an index interest feature that offers the potential of an enhanced interest rate based in part on the upward movements of a stock market index.
The policy's index interest rates are based in part on the percentage change of the Standard & Poor's 500® Composite Stock Price Index (S&P 500® Index), minus three percent, and are subject to maximum crediting rates (caps) that are structured to allow the policy owner the potential of capturing a considerable portion of the upside of the market. The policy's current cap is 21 percent.
Although the S&P 500® Index is an equity index, TransIndex UL is not a variable product and not an investment in the stock market or the index. TransIndex UL's accumulation value is protected against potential downside risks by guaranteed minimum interest rates.
"With TransIndex UL, policy owners have the opportunity to realize significant upside potential with downside protection," says Bill Tate, TOLIC's Senior Vice President and Chief Marketing Officer.
Protection with Minimum Guarantees
The TransIndex UL policy owner directs the allocation of portions of net premiums (or any loan payments or transfers of policy values) between two account options: a basic interest account, which offers a company-declared interest rate that will never be less than the guaranteed minimum interest rate of two percent, and an index account, which offers an interest rate based in part on the S&P 500® Index and protects the policy owner from any potential negative market performance with a guaranteed minimum interest rate of zero percent.
Additionally, the policy has a cumulative guarantee that its surrender value will never be less than an alternative accumulated value with an interest rate of three percent in all policy years since inception of the policy, less any surrender penalty.
Product Features
TransIndex UL's issue ages are 16 to 69. Premiums are based on age-nearest-birthday pricing. Five risk classes are available: Select Nonsmoker, Preferred Nonsmoker, Standard Nonsmoker, Preferred Smoker and Standard Smoker. Minimum face amount is $100,000. There are three death-benefit options: Level, Plus, and Plus Premium.
"TransIndex UL is designed for the youngest members of the Baby Boomer Generation, typically age 45-55, who have a somewhat moderate risk profile, and who are looking for a cash-value accumulation product with death-benefit protection," explains Tate.
Policy options and riders include accelerated death benefits, insured exchange and premium security options, and an over-loan lapse protection rider, which, once exercised, and if all policy conditions are met, guarantees the policy will not lapse even if it becomes heavily loaned.
On the application, the policy owner selects the net premium allocation percentages, and the planned periodic premium. The payment modes available include annual, semi-annual and quarterly, as well as quarterly and monthly via electronic funds transfer.
Premiums are flexible as long as the policy owner meets the cumulative minimum required premiums as of each policy anniversary during the first five policy years. Required premiums vary by issue age, underwriting class and gender.
"Transamerica has a history of developing innovative products and services to help customers create better futures," says Tate. "For example, Transamerica was the first insurance company to offer indexed UL in 1996. Transamerica continues this tradition with TransIndex UL," he says.
Index Account Segments Can Offer Interest Crediting Events Throughout the Year
In the first policy year, the index account (IA) will consist of 12 segments. Each segment's value is a component of the IA portion of the policy's accumulation value. The first segment is created on the policy date. The other 11 segments each begin on the same day of the month as the policy date in each of the following 11 policy months. For example, if a TransIndex UL policy is dated April 5th, April 5th is the beginning date of the first segment; May 5th is the beginning date of the second segment, and so on until 12 IA segments have been established. All or part of each net premium will be allocated to the next IA segment on its beginning monthly date.
"TransIndex UL's multiple segments can offer policy holders interest crediting events on the segments' anniversaries throughout the year after the first policy year, similar to the dollar-cost averaging strategies they may use for investments, rather than the policy's index account being credited with interest only once during the year," says Tate.
The starting index value for each IA segment equals the value of the S&P 500® (excluding dividend income) as of 4 p.m. Eastern time on the day corresponding to the segment's beginning monthly date when the S&P 500® Index is published and both the New York Stock Exchange and TOLIC are open for business. The index change is the percentage change in the index value from an IA segment's beginning monthly date to that segment's anniversary 12 months later.
Each IA segment has a cap, which is declared by the company before or on the IA segment's beginning date and is effective until the segment's anniversary. The cap may change as of each segment anniversary and different IA segments may have different caps.
The index interest rate for an IA segment is the index change minus three percent, but no less than zero percent and no more than the cap for that segment for that segment year. Index interest, if any, is credited on the segment anniversary of each segment year just ended.
Producers interested in more information about TransIndex UL may contact the Western Regional Marketing Center (which covers states west of the Mississippi) at (888) 862-1936 or the Eastern Regional Marketing Center at (888) 558-8743.
About Transamerica
Transamerica Insurance & Investment Group—a marketing unit for TOLIC and its affiliates—offers an array of innovative financial services and products designed to help individuals, families, and businesses build, protect, and preserve their assets. These products and services are underwritten by TOLIC or its affiliated statutory insurance companies, and include term life insurance, universal life insurance, variable universal life insurance, and fixed annuities.
TOLIC is rated A+ (Superior), the second highest of 16 ratings by A.M. Best Company, Aa3 (Excellent), the fourth highest of 21 ratings by Moody's Investors Service, and AA (Very Strong), the third highest of 21 ratings by Standard & Poor's® (ratings as of December 2006). TOLIC is a member of the AEGON Group, a multinational insurance organization headquartered in The Hague, the Netherlands. The AEGON Group is one of the world's leading life insurance and financial services organizations.
For more information about Transamerica, visit www.transamerica.com.
About the S&P 500® Index
The S&P 500® Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. It is compiled and calculated by the Standard & Poor's Corporation. "Standard & Poor's®", "S&P®", "S&P 500®", "Standard & Poor's 500", and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Transamerica Occidental Life Insurance Company. TransIndexSM UL is not sponsored, endorsed, sold, or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing TransIndexSM UL.
