The market has been incredibly volatile of late—Covid-19’s effects on the economy were precipitous and will take a while to recover from. But that doesn’t mean that an indexed universal life policy isn’t a great product. Since these are long-term investments, any fluctuations of market performance will even out over time. We know you have a lot of options as far as which IUL product you choose, so here we will review Symetra’s Accumulator Indexed Universal Life Insurance (IUL) policy, one of the popular IUL products designed for tax-free retirement income purposes.
As with all indexed universal life policies, this product combines an investment account with permanent life insurance. This is ideal for a person who needs permanent life insurance and wants to save and invest for their retirement, but the whole idea of investing scares them and they would like their life insurance company to carry some of the risk.
Three Index Options
Symetra offers three index strategies. These strategies vary a little with regard to what they invest in and how volatile the investments might be. All of them seek to maximize cash value and index growth, they vary in where specifically the money is invested. They also vary where they set the caps and floors.
- S&P 500 index: This is a straightforward index strategy, reflecting the performance of the S&P index
- JPMorgan EFT Efficiente 5 year Index: This generates returns by investing in a wide array of EFT’s and a cash index. By doing so, this maximizes returns and limits volatility. This particular index is only available at Symetra.
- Blended: This splits the investment with 50% reflecting the S&P and 50% applied to the JPMorgan index.
>>MORE: Should I Invest in S&P 500 Index Through an Indexed Universal Life Insurance Policy?
Lookback Guarantee
A great feature of Symetra’s Accumulator is that it includes a lookback guarantee. This means that every eight years or so, they review how the index has performed, and you’re guaranteed at least a 2% return, even if the market tanks.
>>MORE: Compare Indexed Universal Life Insurance with Whole Life Insurance
Included Riders
Symetra also included some riders at no additional charge. They are:
- Accelerated death for terminal illness rider
- Accelerated death for chronic illness rider
- Overloan protection rider (no charge if you don’t use it)
- Charitable giving rider
- No lapse guarantee
The chronic illness rider allows you to get 50% of the death benefit if you are diagnosed with a chronic condition. There is also a Chronic Illness Plus rider that allows you to take up to 100% of the death benefit, although there is an extra charge for that. Learn more about accelerated death benefit (ADB) riders with long-term care
The charitable giving rider donates 1% of the policy value to the charity of choice upon the death of the policy holder.
A few other features of this policy are that after the 12th year, you get a persistency bonus which is added to your cash value.
Also, you can take a partial withdrawal or a loan starting from only the second year.
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Mini-Case Study
We have our hypothetical customer, a 38-year old female non-smoker in the highest tier of health (super preferred). We’ll call her Mary. We get a quote from Symetra for its Accumulator Indexed Universal Life Insurance (IUL) product. And below are the details from its illustration.
- The initial death benefit is $148,621 and the premiums are $3,600 a year. Mary will pay premiums until age 64.
- At year 10, Mary will have a $39,659 cash value and a $188, 280 death benefit.
- At year 20, Mary will have a $127,755 cash value and a $276,376 death benefit.
- Year 27 is the last year Mary will have to pay premiums. She has a $237, 915 cash value and $386,536 death benefit.
- Starting at age 65, Mary can withdraw $17,933 a year from the cash value on the account, tax-free. This is a very nice supplement to her Social Security benefits. She can take this withdrawal every year until she reaches age 89 and she will still be able to leave a $100,764 death benefit to her heirs. Should Mary live longer than 89, she can keep withdrawing from the death benefit.
>>MORE: The Tax Benefits of Life Insurance – Compare with Other Investment and Retirement Savings Options
All in all, Symetra’s Accumulator IUL is an excellent product with some very nice features. Here is our full review of Symetra Life Insurance Company.
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