Securian – 7702 Changes For SecureCare UL

Effective November 1, 2021, the guaranteed interest rate on new SecureCare Universal Life (SecureCare UL) applications will be updated to comply with the Consolidated Appropriations Act of 2021, which lowers the interest rate assumptions used in Section 7702 of the Internal Revenue Code.

How will these changes impact SecureCare UL benefits?

Long-term care (LTC) benefits: The new guaranteed interest rate will have no impact on the LTC benefit pool. Regardless of whether an applicant receives the old or new guaranteed interest rate, the amount of LTC coverage they receive will be the same.

Death benefit: The change to the guaranteed interest rate reduces the minimum required death benefit factors used in the Cash Value Accumulation Test (CVAT). While some plan designs are not affected by these changes, this can result in lower death benefit amounts for some SecureCare UL policies in the corridor:

• Generally, single-pay policies impacted by the 7702 changes will see a death benefit reduction immediately, while impacted multi-pay policies will see a reduction towards the end of the premium payment schedule.
• If a policy’s death benefit amount is impacted by the 7702 changes, the difference between the old guaranteed interest rate’s death benefit and the new guaranteed interest rate’s death benefit diminishes over time until they eventually match up.

Cash surrender value: Some policies may see a slight increase in the cash surrender value. However, some plan designs are not affected by the changes.

7702 changes go into effect Nov. 1 for SecureCare UL

Effective November 1, 2021, the guaranteed interest rate on new SecureCare Universal Life (SecureCare UL) applications will be updated to comply with the Consolidated Appropriations Act of 2021, which lowers the interest rate assumptions used in Section 7702 of the Internal Revenue Code.