Brighthouse Adds a Registered Indexed Universal Life Policy

Brighthouse Financial has introduced a life insurance policy that may help clients tie policy growth to the performance of the stock market while holding down their federal income taxes.

The Charlotte, North Carolina-based company’s new Brighthouse SmartGuard Plus policy is a registered indexed universal life insurance (RIUL) policy.

The policy’s growth can depend on some combination of the S&P 500, Russell 2000 and MSCI EAFE indexes, along with the performance of a fixed account.

A client can use a “guarantee distribution payment” policy loan mechanism to pull cash out of the policy over a period of 10 years, 20 years or for the rest of the policyholder’s life. Under current rules, a U.S. policyholder can take policy loans without paying federal income taxes on the distributions.

What It Means

The new RIUL policy could appeal to clients who want higher returns than they might get from a non-variable indexed life policy, like index-linked products and hope to hold down their tax bills.

Registered Universal Life Insurance Policies

An actuary and an actuarial analyst drew attention to the RIUL product concept in 2020, with a paper suggesting that the product could produce better results than a non-variable indexed universal life policy during a period of low interest rates.