Thrivent Financial for Lutherans has introduced variable universal life and universal life products that it is selling through its nearly 3,000 financial associates nationwide.
The products have a few enhancements from the company's standard models, including a term benefit within the contract.
"At the time you purchase the contract, a term payout can be added to make the life insurance benefit more valuable," said Bill Idzorek, the director of product marketing at Thrivent in Minneapolis. "At the time of purchase, you can also add a spouse to the policy. It's a spouse rider, so the spouse's life is covered. That's another thing we didn't offer before."
"I don't think that the spouse rider is" that unusual, said Arthur M. Fliegelman, a vice president and senior credit officer in the life insurance group of Moody's Investors Service in New York. "You get one contract, instead of two. So there is less paperwork. But what if you get divorced and remarried? I am sure that can be taken care of, but it could become a hassle."
Thrivent has also added risk classes, including a "super preferred" class.
"We realize that this doesn't seem all that exciting, but it is a way to reward healthier people," Mr. Idzorek said. Thrivent now offers five risk classes, instead of three.
The variable product also has a dollar-cost-averaging fixed account that lets investors put some of their principal in fixed investments. During the first 12 months, however, the fixed investment would have to be shifted into the equity market buckets.
These accounts are similar to the fixed buckets that numerous variable annuity providers offer. Fixed subaccounts in variable annuities were often credited for last year's rise in variable annuity sales through banks.
Many investors bought variable annuities because the guaranteed returns on their fixed subaccounts were 3%, while fixed annuity providers were cutting their return guarantees below 3% for a time to match the market rate environment. However, because of the low market rates, variable annuity providers have limited how much of an initial investment could be put in the fixed subaccounts.
Still, nearly half of all money invested in variable annuities sold through banks in last year's second half went into fixed subaccounts, according to data from Kenneth Kehrer Associates, a Princeton, N.J., consulting firm.
Mr. Fliegelman said that putting a fixed subaccount in a variable universal life product is not nearly so risky as creating one for a variable annuity.
"With a VUL policy, someone might put $5,000 into a dollar-cost-averaging fixed bucket, and in a year, it all has to be invested in equities anyway," he said. "With the annuity, we're talking about a $50,000 investment, and the money could sit in the fixed subaccount for a while."
