ITT Life Plans IRA-Linked Insurance: Policy for Banks Would Pay Retirement Account in Case of Death or Disability
Sudo, Philip T., American Banker
NEW YORK -- ITT Life Insurance Corp. Has announced plans to provide life insurance for banks to sell with individual retirement accounts (IRAs).
The program, dubbed the "IRA Builder Account," allows banks to offer IRA completion insurance, which guarantees retirement benefits to customers in the event of disability or death.
ITT Life, based in Minneapolis, Minn., will introduce the product during the American Bankers Association annual meeting here Oct. 20-24.
Robert Macdonald, ITT Life president and chief executive officer, said his firm will provide all marketing responsibilities; partners need only endorse the effort and manage the assets it brings in.
ITT Life receives underwriting revenues on the product, while partners keep all other revenues the IRAs generate. There is no other cost to the bank, Mr MacDonald said. "If the program takes off, we might ask for a percentage of the deposits we bring in," he said, "but we think it's a nice even wash as it is."
In a telephone interview, Mr. MacDonald said, "Banks have two things insurers don't have: credibility and a customers base. We have things that they don't have: product knowledge and marketing savvy. When you put the strengths together, it's a powerful thing."
ITT Life solicits IRA customers through telemarketing and direct mailings, he said, using the name of the bank. He added that the program gives partners exclusive market coverage and sells only to the bank's non-IRA customers.
"We believe there's no regulatory problem," Mr. …