The carrier's reproposal and monitoring systems are inadequate. For instance, there is limited in-force policy illustration capability. Another example is when there is limited in-force concept (i.e., split-dollar) illustration capability.
There is no or limited ongoing monitoring. Client situations change, investment performance impacts the product, and policy structures are affected. These and related issues must be considered.
Conclusion
PPVL insurance has the potential to be a very strong product for advisors and for clients. Without question, the product will broaden in appeal. More affluent clients will hear about the product and become enticed by its potential benefits. More advisors will look to market PPVL insurance to their clients.
If we reach one conclusion, however, it is the need to approach PPVL insurance carefully. This brief survey demonstrates the range of problems that can occur. With due diligence in client assessment, implementation and servicing, adverse results for all involved can be avoided. With care in mastering the intricacies of PPVL insurance, advisors will be able to compete more successfully for high-net-worth clients.
Russ Alan Prince is president of the high-net-worth consultancy Prince & Associates and co-author of eWealth (www.iihighnetworth.com).
Richard L. Harris CLU, AEP, is a principal of BPN Montaigne, a boutique financial-advisory firm specializing in developing unique solutions for high-net-worth individuals.