Financial Foundation IUL^® (FFIUL) Product Updates

Effective December 4, 2021, we’re implementing changes to our Financial Foundation IUL^® (FFIUL) product due to the Consolidated Appropriations Act, 2021, a federal regulation that all insurance carriers must follow. This regulation changed the rates used in calculations of 7702 and 7702A values. These updates effects FFIUL policies sold on or after January 1, 2021, including in force policies. Below is a summary of the updates:

•	Federal regulatory updates to 7702 and 7702A substantially increased the Guideline Level Premium (GLP), Guideline Single Premium (GSP), Net Single Premium (NSP), and 7-Pay thresholds.
•	Policies using the Guideline Premium Test (GPT) to meet the definition of life insurance will generally be able to accept more premiums.
•	Policyholders will generally be able to pay more premiums into their policies without the policies becoming Modified Endowment Contracts (MECs), which have less favorable tax treatment.
•	Our New Business illustrations will reflect these changes starting December 4, 2021. No other product charges, credits, or target premiums are changing.
•	Policies that our administrative systems treated as a MEC in 2021 may no longer be a MEC under the new legislation.
•	Illustrations and in force policies issued on or after January 1, 2021, will be updated to reflect the new Section 7702 and 7702A interest rates and funding limits starting December 4, 2021.

What this means for your clients
We’ll mail letters to existing FFIUL policyholders in early 2022, explaining the updates to their policies. You will also receive a copy of this letter.

If your existing clients have a policy that was issued as a MEC between January 1, 2021 – December 4, 2021, and treated by our administrative system as a MEC, but their policy is no longer a MEC under the new legislation, we’ll send you and those clients a letter and inform you both of the actual non-MEC status.

For all the details on these updates, see our Frequently Asked Questions.

Stay Tuned
Be on the lookout for an email invitation in the coming weeks for a webinar on December 14, 2021, where we’ll discuss these updates further.

Questions?
If you still have questions, please contact your sales desk. We’re here to help.