NEW YORK, July 14 /PRNewswire-FirstCall/ — AXA Equitable Life Insurance Company, a leading U.S. life insurer with a 150-year history, has introduced Athena Indexed Universal Life (Athena IUL), a new permanent life insurance policy with enhanced cash-value accumulation potential and downside protection. Athena IUL offers interest crediting linked to the movement of three major market indices (up to a cap) with a built-in guaranteed floor to help protect against index declines.
“In light of recent market volatility, historic low interest rates, and concerns about the potential for rising taxes, Athena IUL represents a new permanent life insurance product that addresses multiple needs, including beneficiary protection, cash value accumulation and down market risk management,” said Christopher M. “Kip” Condron, chairman and chief executive officer of AXA Equitable. “For individuals and business owners who are juggling a desire to reduce equity risk with a need to build future income, we believe this new solution offers the right blend of benefits.”
Diversification by Market and Time Period
Athena IUL policyholders can allocate net premiums (after expenses) to any combination of four indexed options where cash value can grow (up to a cap) based on the movement of major equity indices. Policyholders have access to indexed options driven by three different equity indices, enabling participation in a broad scope of market opportunities – U.S. large-cap stocks, U.S. small-cap stocks and foreign stocks. Policyholders can also diversify by time period, choosing between three indexed options structured with a one-year maturity and one with a three-year maturity:
– The 1-Year S&P 500 Price Return Index Indexed Option
Based on the Standard & Poor’s 500 Price Return index (S&P 500), which tracks the market capitalization (the aggregate price, or value) of the 500 most widely held large-cap U.S. stocks and is generally regarded as the benchmark for broad U.S. stock market performance.
– The 1-Year Russell 2000 Indexed Option
Based on the Russell 2000 Index, which is generally regarded as the benchmark for U.S. small-cap funds. Russell 2000 tracks the market capitalization of the 2,000 smallest companies listed on the Russell 3000 index, which includes the 3,000 largest companies in the U.S., based on market capitalization.
– The 1-Year MSCI EAFE Indexed Option
Based on the MSCI EAFE Index, which, as of July 2010, tracks the market capitalization of 22 individual country indices in Europe, Australasia and the Far East and is broadly accepted as a benchmark of international equity shares.
-- The 3-Year S&P 500 Price Return Index Indexed Option Also based on the Standard & Poor's 500 Price Return Index (S&P 500).
In addition to these indexed options, policyholders can allocate premium to a Guaranteed Interest Account, which credits a rate of interest guaranteed to never be less than 2%.
Simplified Crediting Rate Strategy
The Athena IUL indexed options deliver growth potential (up to a cap) based on index movements, without exposing policyholders to the possible downside risk typically associated with equity markets. This is accomplished through the beneficial way the index options interest credits are calculated in an Athena IUL policy.
AXA Equitable uses a simplified point-to-point method to determine the index “performance rate” for each indexed option segment – the difference between the index’s value at the beginning and end of the 1-year or 3-year segments. This is then multiplied by the “participation rate” – the percentage of the index growth on which the interest credit is based, subject to the cap and floor established by AXA Equitable.
With Athena IUL, the participation rate is guaranteed to be at least 100%, providing a level of comfort not always found in index-linked life insurance products. If market conditions warrant, AXA Equitable also reserves the right to raise the participation rate above 100% in the future.
“Our new Athena IUL demonstrates the evolution of life insurance and the unique role it can play today in a financial plan,” said Andrew McMahon, president of Financial Protection and Wealth Management for AXA Equitable. “By offering a dynamic coverage strategy with equity-linked growth potential, as well as a guaranteed floor to protect against index declines, we have once again set the tone in the industry – long a characteristic of AXA Equitable.”
