Nationwide Financial® launches ULtimate Universal LifeSM policy
New product targets consumers seeking living benefits with guarantees
June 26, 2006
Media Contacts:
Dan Orzano
614-677-5115
Jeff Botti
614-249-6339
Columbus, Ohio — For consumers who want lifetime protection, strong living benefits and simplified policy maintenance, Nationwide Financial Services, Inc. (NYSE: NFS), today launched its new Nationwide ULtimate Universal LifeSM product. ULtimate is a universal life insurance policy designed to provide consumers with low-cost, permanent life insurance with a guaranteed death benefit. Nationwide Financial guarantees the policy will be there when the consumer (or their beneficiary) needs it, as long as the regularly scheduled no-lapse premium is paid.
Also known as secondary guarantee or no-lapse guarantee universal life insurance, ULtimate Universal LifeSM offers several beneficial riders and endorsements, which can be added to personalize the product. These include:
- long-term care rider
- spouse rider
- child rider
- waiver of monthly deductions
- accelerated benefit rider (no cost unless invoked)
- accidental death benefit rider
- maturity date extension endorsement (no cost).
Consumers should consult with their insurance professional to discuss costs, advantages and disadvantages of each rider in detail. Riders and endorsements may not be available in all states and most involve additional cost.
“Uncertainty about the future of their family, the markets and personal security is driving some consumers to more conservative products with guarantees,” said Peter Golato, senior vice president for Nationwide Financial. “We’re finding many consumers are concerned about having enough money throughout their lives because they expect to live longer, so low-cost protection is important. They also want financial independence and control, so the ability to access the death benefit while alive for terminal illness or long-term care needs is also important.”
Evolving client needs and preferences have made no-lapse guarantee universal life insurance products one of the top sellers in the industry. ULtimate can also be used for legacy planning and wealth transfer for clients who want to preserve assets for loved ones in a tax-efficient manner, provide lost income for survivors and create an estate for their heirs.
A lifeline if needed; a legacy if not
Uninsured long-term care (LTC) expenses can wreak havoc on a consumer’s financial security. Today, the average annual cost for a private room in a nursing home is nearly $70,000.a An in-home health aide runs approximately $18 an hour.b No wonder consumers are concerned!
Nationwide’s LTC rider with an indemnity feature can provide the policyholder with an accelerated death benefit to use for long-term care. If the person doesn’t use LTC, they don’t lose the value of the death benefit.
“Our long-term care rider helps provide a lifeline if the consumer needs it, and a legacy to their heirs if they don’t,” Golato said. “Consumers tell us that one of their biggest fears is the inability to afford the long-term care they may need in retirement. ULtimate is truly a living benefit for them and their families.”
To keep things simple and easy, Nationwide doesn’t require the policyholder to keep track of bills and receipts or worry about creating an unintentional taxable event from payments from its policies. After meeting the 90-day elimination period, Nationwide pays the policy owner directly and the money can be used as he or she wishes.
The policyholder controls the payment amount and enjoys a high degree of flexibility by choosing how much of the monthly benefit is received, up to the benefit maximum or HIPAA limit, using the payment for any purpose.c The policyholder can choose to receive less LTC benefit than they are eligible for to help preserve the death benefit and effectively stretch the LTC coverage period.
-a. U.S. Congressional Budget Office; Testimony before the Subcommittee on Health of the House Committee on Ways and Means; April 2005
b. AARP Public Policy Institute; September 2004
c. Nationwide sends a monthly check equal to the lesser of two percent of the LTC specified amount or daily HIPAA amount ($250 in 2006) times the number of days in the month.
-more-
Patent-pending Automated Premium Monitor helps avoid policy lapse
No-lapse guaranteed UL products are one of the hottest-selling life insurance products on the market today. But, there is a hidden danger. All no-lapse guarantee universal life insurance products depend on specific premiums to guarantee death benefits to certain ages — usually for a lifetime. When these premiums are not paid as originally illustrated, they can compromise the client’s death benefit guarantee. The guarantee is very sensitive to the timing and amount of the premium payments. For example, if the payment is made after the premium due date, it could negatively impact the policy’s death benefit guarantee. In some unusual situations, paying the premium early could even shorten the guarantee’s duration.
The good news is that Nationwide ULtimate Universal LifeSM proactively addresses this problem. A patent-pending Automated Premium Monitor (APM) program can help protect the client from potential disaster. There is no extra cost to the policyholder for this program.
APM is a three-tiered safety net designed to:
- prevent the intended guarantee from going off course
- notify the client and producer if the planned guarantee is off track
- correct guarantees that strayed from the intended plan.
A distinctive approach to underwriting
Nationwide’s approach to underwriting is as unique as ULtimate.
“We believe in underwriting the individual and not just the impairment,” said Golato. “By applying our philosophy of looking at each insured’s specific situation, we offer more flexibility in underwriting our life products. As a result, clients may be able to receive better ratings from Nationwide than ever before.”
For example:
- clients with well-controlled diabetes may qualify for a standard rating
- clients with a history of breast cancer or other certain cancer histories may qualify for a standard rating
- decreased need for chest X-ray requirements provides greater flexibility and client convenience
- Nationwide offers extremely competitive criteria for preferred classes.
As with all life insurance, guarantees are subject to the claims-paying ability of the issuing life insurance company. As consumers’ personal situations change (for example, marriage, birth of a child or job promotion), so will their life insurance needs. Care should be taken to ensure this product is suitable for long-term life insurance needs. They should weigh any associated costs before making a purchase.
Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, and has additional charges for riders that customize a policy to fit individual needs. All riders may not be available in all states.
Neither Nationwide nor its representatives give legal or tax advice. Consumers should contact their legal or tax advisor for answers to their specific tax questions.
About Nationwide Financial
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers investi and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.
It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 98 on the Fortune 500 based on 2005 revenue.ii For more information, visit www.nationwide.com.
Nationwide, Nationwide Financial and the Nationwide Framemark are federally registered service marks of Nationwide Mutual Insurance Company.
Not a deposit • Not FDIC or NCUSIF insured• Not guaranteed by the institution • Not insured by any federal government agency • May lose value
- 30 -
(062606)
i Nationwide Investment Services Corporation, member NASD. In MI only: Nationwide Investment Svcs. Corporation.
ii Fortune Magazine, April 2006
(FLV-0102AO)
Investments Retirement Insurance www.nationwide.com One Nationwide Plaza Columbus, OH 43215-2220
