AXA Product Overview: NEW BrightLife Protect Survivorship

On Wednesday, May 27th, AXA released BrightLife Protect Survivorship. This product is the second-to-die version of their BrightLife Protect UL, which was released in February of 2014. It is a death benefit-oriented product that offers both a fixed account and an indexed-linked “Select” account for premium allocation with virtually no change in structure or charges between the two accounts.

As a general account product, the current assumptions will only project a 3.25% fixed account illustrated rate. AXA now offers the Select account which can capitalize on current historical look back calculations in order to justify an illustrated rate of 5.75%. Internally, there doesn’t appear to be any additional charge or hedge to bolster the budget for purchasing these options; no real evidence for how the BrightLife Protect will gain the extra 2.5% in extra crediting rate. In fact, switching to the Select account loses an interest bonus of 0.25% in year 16, so performance, at like-kind rates between the two accounts, slightly worse for the Select account. When allocating to the Select account, it has an extremely low cap of 8%. No other SIUL that LifeTrends reviews falls below 10%, all have an average cap closer to 12%. The anticipated upcoming IUL regulations would limit the maximum illustrated rate of this product somewhere in the range of 5%-5.25%, though that is still 2 points above the fixed account rate.

BrightLife Protect Survivorship appears to be a fixed account second-to-die universal life product by design. It is more advantageous to allocate to the fixed account with an interest bonus credited and there is no apparent hedging for any rise in options prices if index market performance is consistently high. We have added the 5% values to the Survivorship IUL $1 at maturity benchmark, in which it appears competitive, but is functioning with a much lower cap than the competition. With a max illustrated rate currently of 5.75%, these values were not added to the 7% or the Max IR% benchmark, as they are much more expensive than the bottom tier premiums.