Principal Launches Variable Universal Life Insurance Product

The Principal Financial Group introduced a new life insurance option designed to help financial advisers solve challenging coverage questions for business owners and other clients.

The “Principal Variable Universal Life – Business” product is a variable universal life insurance policy designed to provide death benefit protection and help business owners position their business for an unexpected succession or ownership transition. Benefit payments from the policy can also help owners retain key employees during an unforeseen transition, according to The Principal.

The product also features an investment component that allows for tax-advantaged retirement investing, the firm says.

Key features of the policy include:

  • Designated beneficiaries receive a federal-income-tax-free death benefit.
  • Principal Variable Universal Life – Business policies accumulate cash value on a tax-deferred basis. As cash value builds, the policy holder does not incur income taxes for interest earned.
  • Policyholders may take loans or partial surrenders without creating a taxable event, provided the policy is not designed as a modified endowment contract. Loans or surrenders may be subject to policy charges, surrender charges and transaction fees, and will reduce the cash values and death benefits.
  • In addition to the tax advantages, policyholders can customize the policy and the benefits it provides via increasing or decreasing the death benefit as coverage needs change. Policyholders can also change the premium amount and the timing of payments.

The product does carry some investment risk, according to The Principal, so advisers and clients must determine which investment options correspond to the client’s financial goals.

More information is available here