Advisors Blog

Below is the full text of the recent Prudential memo. For a PDF version of this announcement, click here.

August 14, 2017

Prudential strives to offer a relevant suite of products that align to a variety of customers' needs. To reinforce our commitment to the no-lapse guarantee marketplace we are introducing new pricing on PruLife SUL Protector, effective August 21, 2017. The updated version has similar changes to those made to PruLife® Universal Protector earlier this year.

The new pricing incorporates the 2017 CSO table, uses Principal Based Reserves, and will help maintain the sustainability of SUL Protector. We will continue to monitor pricing on our entire suite of products and exercise the financial discipline that has helped Prudential provide enduring value to its clients for over 140 years. 

Reprice Details

• Level pay scenarios will increase 6% on average.
• Single pay scenarios will increase 14% on average.
• Face amount limits will be removed on applied for policies using the new rates.
• Introduction of 1st year flexibility, limits impacts to the No-Lapse Guarantee when premiums are paid later in the first year than anticipated in illustrations. This can be particularly beneficial for 1035 exchanges and backdated policies.
• CTPs will be increased and generally be higher than level pay premiums.
• Limited NLG (premium based) period increasing from 5 years to 10 years.

Transition Rules

• August 21, 2017 (Ready to Sell Date): New Rates for the revised product are in effect. The current face amount limit of $10 million is removed for New Rates. All applications signed and dated¹ on or after August 21, 2017 will receive New Rates (unless Old Rates are requested and permitted).
• September 10, 2017 (Transition Period End Date): Last day that an application can be signed with a request for Old Rates.
  • If Old Rates are desired for an application dated during the 21-day Transition Period, a written request, along with the appropriate presentation version, must be submitted on or after the state introduction date.
  • The face amount limit of $10 million is still in effect for Old Rates.
  • Applications dated September 11th and later will receive the New Rates only.
• September 18, 2017 (Home Office Receipt Deadline): Applications based on Old Rates must be received in the Home Office by September 18, 2017. Applications dated prior to September 11 but received in the Home Office after September 18 will be processed with the New Rates.
• December 29, 2017 - Inforce Placement Deadline - A policy applied for before or during the transition period must have all delivery requirements signed and received by the Home Office in good order by this date to receive old rates. The Inforce Placement Deadline will be adjusted for 1035 exchange cases where the only outstanding item is receipt of the 1035 funds at the time of the December 29, 2017 deadline.
• States that approve the revised product after August 21, 2017 will have their “Ready to Sell Date”, “Transition Period End Date”, “Home Office Receipt Deadline”, and “Inforce Placement Deadline” adjusted.

Applications Without Ownership Arrangements

Formal applications without ownership arrangements (Preliminary applications, trial application and where a Trust is TBD) must be replaced by a final formal application by the end of the 21 day transition period based on state approval to be eligible for the Old Rates.

Informal/Inquiry Applications 

Informal/Inquiry applications will not be eligible for Old Rates unless replaced by a live application by the end of the 21 day transition period based on state approval.

• ¹Definition of “application date”:
  Pru Advisors or Third Party Full Application case - Date the Part 1 of application (ORD 96200) was signed