Single Premium Variable Life Insurance

I’d like to go through a bit of history and cover some of the challenges that are coming up and see what we might be able to do with them.
- Let’s start with October 1987, which, in my mind, started a nifty period for the annuities — the “golden age,” as I would call it.
- There was a period of time, 1985 through most of 1987, when single premium fixed life insurance and single premium variable life insurance were really coming on strong.
  - These products were offering the potential for tax-free income through wash loan features, and the indication was that the SPDA product was going to be left behind. Things changed rather abruptly – within a two-week period.
  - There was a 500-point Dow Jones decline in October of that year, and a big challenge emerged on the tax front with Stark and Rostenkowski. Ultimately, a year later, the tax laws were changed to preclude tax-free income through use of the loan feature.
So it was back to basics for agents and stockbrokers. The good, old tax-deferred annuity concept wasn’t that bad after all, so they got re-energized.

— Michael Winterfield, partner with Ernst & Young in New York City

1991 – SOA – Annuity Product Development Update, Moderator: Philip Polkinghorn, rsa91v17n218 – Society of Actuaries – 22p

The wirehouse channel has seen several interesting developments. A new product just came out early in 1995 from The Hartford. It is a single-premium variable life insurance product that is available in either single-life or joint-life form.
It is a very streamlined product. The charges are easy to explain. You don’t need illustrations to go with the product, and it simply delivers the life insurance and tax benefits that are available from that kind of a product.

— Marc G. Verrier

1995 – SOA – Innovation in Savings Product Design, rsa95v21n217 – Society of Actuaries – 18p