With New Product, the New England Targets Bank Sales of Life Insurance

The New England is betting that a life insurance product called single- premium variable life will give it entree into the difficult business of selling life insurance through banks.

The product is more cost-effective and simpler to obtain than are whole life and other life insurance products, said Ken Schweiger, vice president of bank distribution for the Boston-based insurer, which is a subsidiary of Metropolitan Life.

It carries no up-front charge, as do other kinds of policies.

"It's priced like an annuity, so it's easier for the rep to sell," Mr. Schweiger said.

The product has a guaranteed death benefit, meaning that even if the policy's cash value were theoretically wiped out by some market calamity, the death benefit woud remain.

And because the single-premium variable is designed to pass wealth to beneficiaries rather than be used during the client's lifetime, a needs- based assessment is not required, he said.

If single-premium variable life, introduced in the first quarter of this year, catches on at banks, it could pave the way for other life insurance products through the bank channel, Mr. Schweiger said. That would be a coup because insurers have struggled to sell life insurance through banks.

"I really think the product will fit well as a transition," he said.

The New England already sells variable annuities through its network of about 30 banks.

As relatively simple as the single premium variable product is, it still requires more time for reps to sell, compared with annuities or mutual funds. To win over banks and their reps, the New England is paying gross commissions that Mr. Schweiger said exceed those for funds and annuities.

All but four states-New York, New Jersey, Pennsylvania, and Oregon-have approved the new product for sale, and Mr. Schweiger said he expects it will be approved in all 50 states within two months.

The New England, created 165 years ago, is the oldest mutual insurance company in the nation. It operated exclusively through a dedicated career agency system until a year and a half ago, when it got into the bank distribution business with variable annuities. Last year the bank channel generated more than $3 million of premiums, Mr. Schweiger said.

Companywide, the New England brought in about $600 million of variable annuity sales last year.

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