National Financial Partners, which has bought up a slew of financial advisers to the rich, has started distributing its first exclusive product for that market - an estate planning insurance policy custom-developed by Phoenix Home Life of Hartford, Conn.

Creating custom variable insurance products is part of the New York firm's long-term strategy, said Anne Long, senior vice president of marketing for NFP Life and Benefits in Austin, Tex., its product distribution arm. National Financial Partners, which is headed by Jessica Bibliowicz, plans to create several custom-designed products for its 700 reps, Ms. Long said.

The Phoenix policy, called Estate Strategies, is a second-to-die variable universal life product - one that is generally sold to married couples and pays a portion of the death benefit to the surviving spouse and the rest to others at that person's death.

Robert Primmer, Phoenix's senior vice president for distribution, said the product will be profitable for his company even though it is going into a small, closed distribution system.

"These are high-level producers," he said. "They are the equivalent of any insurance company's top 20 agents."

One element of the policy that Mr. Primmer said was specifically designed for National Financial Partners' reps is an adjustable split depending on what happens with the tax law in the future. Most second-to-die policies lock buyers into a specific split.

A second element is that the surrender period, during which the insured must pay a penalty for cashing out of the policy early, is an unusually short five years. Also, that penalty, known as the surrender charge, does not decrease during the surrender period.

Another difference is that the policy will be sold to people as old as 90. "People are getting older. We need to provide for this," Ms. Long said.

Like Phoenix's other variable universal life products, National Financial Partners' has 42 investment options. But it is aimed at a people in a narrower age group and with higher incomes.

"If we tried to adjust our shelf product to this market, we'd alienate two-thirds of our buyers," Mr. Primmer said.

Ms. Long said National Financial Partners also plans to take portfolios managed by some of the fund-of-fund managers it has acquired and put them into the variable products. "It's another piece of distribution," she said. "As you acquire insurance and investment capabilities, you want to have products that can deliver them both."

High-net-worth consultant Russ Prince said that offering custom-designed insurance products as well as custom-managed investment products within the policies is a good business move for National Financial Partners.

"Producer groups have been doing this for ages - creating custom products for their reps," he said. "It's a logical thing to do, because it creates recurrent revenue for NFP."

Phoenix is one of seven insurers that had a relationship with Partners Financial, the Austin producer group that was one of the first purchased by National Financial Partners.

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