Magazine article American Banker

Hartford Variable Life Policy Adds a Market-Shield Rider

Magazine article American Banker

Hartford Variable Life Policy Adds a Market-Shield Rider

Article excerpt

Hartford Financial Services Group Inc. has added a rider to its variable universal life insurance policies that guarantees death benefit protection no matter how the equity markets affect the performance of the policies' investment options.

The no-lapse guarantee rider is available for an additional premium on the Stag Accumulator Variable Universal Life and Protector Variable Universal Life products.

"If you have a variable universal life policy and the market goes south, you can get to the point where you don't have enough money to keep the policy in force," said David Potter, a spokesman for Hartford Life. "If the cash value is not maintained, it lapses. With the guarantee, that won't happen."

But this guarantee can be expensive, said Carmen Effron, president of the CF Effron Co. consulting firm in Westport, Conn.

"Yes, it makes sense to make sure your policy never lapses," Ms. Effron said. "But at what cost?"

Mr. Potter said the cost depends on the applicant's age and health.

"Each person has to do their own cost-benefit analysis when making the purchase," Mr. Potter said. "For some people that have an estate tax problem, and want a guaranteed death benefit, and still want the upside potential of equities available in a variable life policy, the cost can be quite reasonable."

Ms. Effron agreed that the rider would be worth it to some investors.

"It gives the nervous investor the opportunity to make sure their death benefit will be there," she said.

Jack Cramer, a principal at Cramer, Wick & Associates, an Austin bank-insurance consulting firm, called the rider a good marketing gimmick. …

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