Magazine article American Banker

Variable Life Products Fuel Leaders in Bank Sales

Magazine article American Banker

Variable Life Products Fuel Leaders in Bank Sales

Article excerpt

Nationwide Financial Services Inc. was the top seller of life insurance in the bank channel last year as measured by weighted premium; Hartford was No. 2; and both companies have devised a fixed-rate version of the variable universal life product that is their staple in the channel.

The top three sellers in total premium were Liberty Life, Aegon, and Allstate. All three are predominantly single-premium fixed sellers, according to Kenneth Kehrer, the president of Kenneth Kehrer Associates, a Princeton, N.J., consulting firm that tracks life insurance and annuity sales through banks.

The life insurance industry generally discounts single-premium products because historically they are much less profitable than recurring-premium products. Weighted premium is calculated from 100% of recurring-premium sales plus 10% of single-premium sales.

Nationwide of Columbus, Ohio, sold only recurring-premium products, and most of its sales were of variable universal life policies. Nationwide had $38.1 million of recurring-premium sales through banks last year, according to the Kehrer firm.

The bank channel is a good market for Nationwide's variable universal life products, said Matt Riebel, the president of Financial Institutions Distributors Agency Inc., the division of Nationwide Financial that distributes life insurance and annuities through banks.

"There are many affluent clients who use it as a wealth transfer vehicle, as well as for retirement planning needs," Mr. Riebel said.

Hartford Financial Services Group also sells variable universal life, and the Connecticut insurer gave many of the same reasons as Nationwide did for offering it. …

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