Guaranteed death benefit protection with cash value potential.
Guaranteed death benefit protection on a variable life chassis has provided a strong, cost competitive solution compared to the traditional GUL options. Actuarial guideline changes in 2013 (AG38) placed additional pressure on the insurance carrier reserve requirements. The ability to offload some of the risk from the general account to the sub-account investments allows for VUL to be easier to hedge and cheaper to maintain (especially in a low interest rate environment).
With guaranteed no-lapse riders added to the policy from 20 years to life, it allows for similar protection as a GUL counterpart. The addition of cash value buildup provides the client access to cash for supplemental income on a tax-favored basis. Secondarily, it provides flexibility for the client down the road for a potential 1035 opportunity. For the BGA, if the VUL is cheaper than the GUL and offers a similar guarantee with the added benefit of cash value, it is a no-brainer solution for clients.