Bragg Comer, an advisor with Laurus Financial Advisors in Dallas, says clients are usually comfortable with paying a fee for insurance preparation after they get an explanation of the differences between load and low-load life insurance. "They can see where the money goes, so to speak," says Comer.
Comer says his firm views variable universal life as an ideal investment for clients who have hit the maximum contribution limits on their retirement plans, but have extra money they want to put away for retirement. Comer says he also prefers that his clients overfund their variable policies.
"A variable universal life policy is dealing with the volatility of the market, and you just need to have more dollars to deal with that," he says. "If the market is down, you want to make sure you're not in a situation where you don't have enough money in your VUL to pay the insurance costs."
But while he's certain variable universal life policies are useful in financial planning, he's not as sure that more insurance companies are eager to introduce fee-based product lines. "You're almost talking about a cultural change for most insurance agents," Comer says. "So much of their compensation is built around first-year commissions, which is so much different from how the investment industry works."