NU Online News Service, Sept. 26, 7:32 p.m. – Variable life insurance sales could fall to about $4.5 billion this year, down from a high of $6.9 billion two years ago, according to Tillinghast-Towers Perrin, New York.

But consultants at the firm say life insurers might increase variable life sales to as much as $10 billion by 2006, if the stock market improves and insurers strengthen distribution.

The consultants estimate that fewer than 10% of investment-oriented advisors are actually selling variable life, and they argue that the stock-market slump has frightened many career insurance agents and insurance-oriented independent agents back to selling fixed products.

Life insurers that want to pump up variable life sales will have to do a better job of reaching out to the investment advisors and regaining the confidence of the agents, the consultants say.

But the consultants note that life insurers might still have to contend with legal uncertainty. In addition to market volatility and a weak economy, sellers of variable life face upheaval in the federal laws and regulations that govern estate planning programs, corporate-owned life insurance programs, split-dollar programs and other programs that make heavy use of variable life coverage, the consultants say.