Pru Debuts VUL For BGA Distribution At NAILBA Annual Meeting
Why do insurers debut products at meetings for brokerage general agents? Prudential Select Brokerage, Newark, N.J., provides some insight.
Last fall, Pru rolled out a variable universal life policy at the annual meeting of National Association of Independent Life Brokerage Agencies, Fairfax, Va.
Called PruLife Advisor Select, the policy is like traditional full-featured VULs with this exception: It is designed for sale through BGAs who have clients interested in active trading inside an insurance product. To this end, it allows policyholders to make unlimited transfers among its 29 index funds, in unlimited amounts, without transfer fees.
The prospectus actually encourages owners to use a registered investment advisor (RIA) to do this trading, points out John Howard, president of Prudential Select Brokerage.
“The subaccounts are set up to trade at the end of the day,” he adds, “and the product has an online trading platform to make the trades more efficient for the RIA.”
Why debut it at NAILBA? Because Pru believed its new VUL was something that the BGAs there would like to see.
Many BGAs have clients who are turned off traditional VULs, Howard explains. These clients dont like the traditional VULs equity exposure and its “buy and hold” investment strategy, he says. Many BGAs have turned to universal life insurance as an alternative, he allows, but he says UL doesnt work for all BGA clients.
Many BGA clients today still want equity-linked products, Howard explains, but they want ones that reduce volatility and improve risk-adjusted returns.
Pru built its new active traders VUL to meet those requirements and then decided to debut it to the target distribution channel (BGAs) at NAILBA.
Reproduced from National Underwriter Edition, March 10, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.