Using products in new ways to serve client needs is a topic that was threaded through a number of sessions during the annual meeting of the National Association for Variable Annuities here.
For instance, the use of variable life insurance as an alternative to long term care insurance was discussed by Norse Blazzard, a principal of Blazzard, Grodd & Hasenauer, P.C., Fort Lauderdale, Fla. It is a product concept that is being developed by Cary Lackenbach, president of Actuarial Strategies Inc.
Registered reps are more likely to sell variable annuities than they are to sell variable universal life insurance because they do not always understand VUL underwriting and they are concerned about having to give bad news if a client fails medical tests. Also, these reps, particularly in bank channels, can sell annuities and complete the transaction on the spot, he added.
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And, while Blazzard noted that VAs are valuable because they offer living benefit guarantees, he also explained that Lackenbach’s work illustrates how VUL policies that are not modified endowment contracts can be used to draw a post-retirement income stream using policy loans.
Implosion of a contract can be avoided by creating an overloan provision that is usually established through a life insurance rider, he added. The overloan provision when triggered creates a form of nonforfeiture status, according to a slide accompanying the presentation.