LTC Resources
Your Path to Financial Confidence with TransAmerica Financial Foundation IUL® II
Protect, Grow, and Customize Your Wealth
TransAmerica's Financial Foundation IUL® II (FFIUL II) combines the security of life insurance with the potential for cash value growth, offering clients a versatile, tax-efficient financial tool. This product addresses common client concerns about market risk, tax advantages, and flexibility. Below, we’ve distilled the benefits to help you see how FFIUL II aligns with your long-term financial goals.
Core Benefits of the FFIUL II
Guaranteed Life Insurance ProtectionDeath Benefit: Provides peace of mind knowing that loved ones are protected from financial strain in the event of premature death.Customizable Riders: Add options like Chronic Illness, Long-Term Care, and Critical Illness riders for tailored support in health-related situations.Flexible Growth PotentialIndex-Linked Accounts: Choose from multiple index accounts, such as the S&P 500 or Global Index, to grow your policy’s cash value based on positive index performance.Guaranteed Minimum Floor Rate: Even in negative markets, the policy ensures that cash value won’t dip below a 0.75% floor, offering protection against market losses.Tax-Efficient Financial AdvantagesTax-Free Death Benefit: FFIUL II allows beneficiaries to receive a tax-free death benefit, securing the legacy you intend for them.Tax-Deferred Growth: Cash value accumulation within the policy grows tax-deferred, enabling higher potential returns without the burden of annual taxes.Tax-Free Withdrawals and Loans: Access cash value to supplement retirement or cover unexpected expenses without incurring taxes, provided the policy remains active.Built-In Financial FlexibilityFlexible Premium Payments: Adjust premium amounts as needed to adapt to life changes, making FFIUL II a resilient choice that grows with you.Loan and Withdrawal Options: With access to tax-free loans and withdrawals, you can support life events or emergencies, keeping finances flexible and available when needed.
Specialized Riders for Customization
Long-Term Care (LTC) Rider: Allows access to the death benefit to cover long-term care expenses, alleviating concerns about future health costs.Chronic Illness Rider: Provides access to a portion of the death benefit if diagnosed with a chronic condition requiring substantial care.Terminal Illness and Critical Illness Riders: Enables benefit acceleration for diagnosed terminal or critical illnesses, providing support during challenging times.Additional Customization Options: Riders like Disability Waiver, Overloan Protection, and Income Protection add layers of security for business continuity or lifestyle maintenance.
Who is FFIUL II Best Suited For?
Growth-Focused Individuals: Those interested in a growth-oriented yet risk-averse policy can benefit from index-linked cash value accumulation with built-in market safeguards.Legacy Planners: Clients aiming to provide a secure future for their loved ones, reduce estate taxes, or plan business continuity.Retirement Savers: Individuals looking to supplement retirement income with tax-free withdrawals or loans will appreciate the FFIUL II’s accessible cash value and tax advantages.Health-Conscious Clients: For those with concerns about potential health costs in the future, the FFIUL II’s riders offer resources to ease medical and long-term care expenses.
Why Schedule an Appointment Today?
Booking a consultation is the first step to understanding how TransAmerica’s FFIUL II can be tailored to fit your personal financial needs. This session will cover:
A review of your financial goals and how FFIUL II aligns with themAn exploration of index account options, growth potential, and policy flexibilityA walk-through of optional riders, showing how they add value and protection based on your life stage
Secure your financial future with TransAmerica FFIUL II. Book an appointment now to see how it can provide both security and growth for you and your loved ones.
TransAmerica Financial Foundation IUL II - Product Specification Sheet
Product Overview
Product Name
: TransAmerica Financial Foundation IUL® II (FFIUL II)
Type
: Index Universal Life Insurance (IUL)
Primary Benefits
: Life insurance coverage, tax-efficient cash value growth, and flexible access options.
Issue Ages
: 0-85 (varies by risk class and state).
How FFIUL II Operates in the Market
Index-Linked Accounts: FFIUL II provides cash value accumulation based on changes in selected indexes (e.g., S&P 500, Global Index), which allows growth potential tied to positive index performance without direct stock market investment.Guaranteed Minimum Interest Rate: Each index account includes a 0.75% floor rate, which ensures cash value doesn’t decrease when markets underperform. This offers clients security by mitigating potential market losses.Participation and Cap Rates:Participation Rate: Applies to Balanced Uncapped Index Account, currently at 113%, allowing for growth that surpasses index increases.Cap Rates: Capped accounts limit maximum credited returns. For example, the S&P 500 Index Account has a 12.25% cap rate, ensuring growth while balancing risk and return potential.Account Options:Global Index Account: Weighted across S&P 500, EURO STOXX 50, and Nikkei 225 indexes.Balanced Uncapped Index Account: Includes an uncapped option with S&P 500, Fidelity SMID Multifactor, and Nikkei 225 components.Basic S&P 500 Index Account: For clients preferring simplicity without additional charges (no Index Account Monthly Charge).
Cash Value Mechanics and Limitations
Premium Flexibility: Premium payments can be adjusted, skipped, or stopped if there’s sufficient cash value, but stopping or reducing payments may limit cash value growth and increase the risk of policy lapse.Access via Loans and Withdrawals:Loans: Tax-free loans up to the available cash value, with guaranteed loan interest credits of 2% and a charge of up to 3% (varies over time).Withdrawals: Available after the first policy anniversary, with a minimum of $500. Excess Index Interest is not credited on amounts taken as loans or withdrawals mid-segment.No Lapse Guarantee: Ensures coverage remains in force if the cumulative minimum no-lapse premium requirements are met. Coverage periods vary by age group (e.g., up to 20 years for issue ages 0–45).
Key Limitations
Cap on Index Growth: The cap rate limits the maximum index-linked growth, reducing the potential for high returns in exchange for greater stability.Charges and Deductions:Monthly Policy Fee: $10-$12 monthly.Cost of Insurance (COI): Deducted monthly, based on age, gender, risk class, and coverage amount.Index Account Monthly Charge (IAMC): 0.72% annual charge applied to select accounts.Policy Lapse Risk: Lapse risk increases if the policy’s cash surrender value is insufficient to cover monthly deductions or if premiums are not consistently paid.Loan Interest Implications: Outstanding loans reduce the death benefit and cash value, with interest charges applying.
Regulatory and Tax Considerations
Tax Treatment:Death Benefit: Generally passes tax-free to beneficiaries (IRC Sec. 101(a)(1)).Cash Value Accumulation: Grows tax-deferred within the policy, avoiding annual taxation unless the policy lapses or is surrendered.Withdrawals and Loans: Tax-free if structured correctly and if the policy remains in force. Excess loans or withdrawals may lead to policy lapse, incurring taxable events.Modified Endowment Contract (MEC): If the policy exceeds IRS limits for premium contributions, it may be classified as a MEC, leading to taxation on loans and withdrawals.Regulatory Disclosures:Index Performance: While index accounts can yield higher growth, they do not directly invest in stocks or securities and do not guarantee returns beyond the floor.IUL Limitations: As with all life insurance policies, guarantees are based on the insurer’s claims-paying ability. Market fluctuations can affect the index-linked cash value, though the minimum interest floor offers some protection.Loan Risks: Loans are subject to interest, and taking large loans or withdrawals may lead to policy lapses. Policyholders should consult financial professionals to ensure loans align with long-term plans.Riders:Accelerated Benefits: Riders may be subject to additional fees and eligibility requirements. For example, the Long-Term Care (LTC) Rider requires certification of chronic illness or cognitive impairment.Federal Tax Implications: While riders like the Chronic Illness Accelerated Death Benefit are generally tax-free, clients should consult tax advisors, especially if benefits are received from multiple LTC sources.
Additional Features and Rider Options
Long-Term Care (LTC) Rider: Allows access to death benefits for qualified long-term care expenses, up to a specified amount.Chronic Illness Accelerated Death Benefit Rider: Provides funds if the policyholder is unable to perform ADLs (activities of daily living).Critical Illness Rider: Allows benefit acceleration if diagnosed with a qualifying critical illness.Income Protection Option (IPO): Offers structured death benefit payouts as a lump sum, monthly income, or combination for beneficiary flexibility.
Target Market and Suitability
Ideal for:Clients interested in long-term protection with growth potential.Individuals prioritizing tax-efficient legacy planning and flexible access to cash value.Clients who want optional long-term care and chronic illness coverage for additional security.Not Ideal for:Short-term or high-liquidity needs. FFIUL II is designed for clients who can commit to a long-term policy.Individuals who require guaranteed high returns. Index-linked growth with a floor provides stability but caps overall gains.
Next Steps
An FFIUL II policy requires a detailed review to ensure it aligns with financial objectives and health coverage needs. Scheduling an appointment with a TransAmerica advisor can provide:
A personalized analysis of potential growth using various index accounts.Guidance on selecting optional riders based on lifestyle or health concerns.A clear understanding of how FFIUL II’s benefits and limitations meet specific goals.
To get started, reach out to schedule a consultation and see how TransAmerica FFIUL II can support your long-term financial strategy.
BlackIron Financial