An agent marketing variable life insurance must be licensed as what?

An agent marketing variable life insurance must be licensed as both a life and variable contracts agent and a broker-dealer due to the inherent complexities and regulations surrounding these financial products. Variable life insurance combines features of both life insurance and investment accounts, allowing policyholders to allocate funds in various investment options, which introduces investment risk.

To properly sell variable life insurance, an agent must possess a thorough understanding of both the insurance aspects and the investment elements involved. This dual licensing ensures that the agent is regulated under both insurance and securities law, thus providing consumers with a protected and knowledgeable selling environment. The requirement for a broker-dealer license is critical as it enables the agent to handle the investment components inherent in variable contracts, keeping in compliance with the regulations set forth by the Securities and Exchange Commission.

In contrast, simply being a life agent would not provide the necessary licensing to manage the variable aspects of the insurance policy, while being a property and casualty agent or a financial advisor would not suffice either, as those roles do not encompass the specific licensing required for variable life products. This requirement aims to safeguard consumers by ensuring that agents possess the appropriate knowledge and qualifications to navigate the complexities associated with variable life insurance.