What must an agent have to sell variable life insurance policies?

To sell variable life insurance policies, an agent must have SEC registration. Variable life insurance falls under both state insurance regulations and securities regulations because it includes an investment component along with the life insurance coverage. The investment portion allows the policyholder to allocate premiums to various investment options, which introduces a level of risk and the potential for fluctuating cash values.

This dual nature requires agents to comply with both the requirements set forth by state insurance departments and the Securities and Exchange Commission (SEC), as well as any applicable regulations from the Financial Industry Regulatory Authority (FINRA). SEC registration provides the necessary credentials for agents to legally sell products that are considered securities, such as variable life insurance policies.

While having a state license is essential for any insurance sales, the key differentiator for selling variable life policies is the necessity of SEC registration, which is specifically required due to the investment aspect of these policies. This registration helps ensure that agents are qualified to provide advice and recommendations regarding the variable investment options included in the insurance product.

Thus, the correct requirement for agents selling variable life insurance is to hold SEC registration, enabling them to operate within the regulatory framework governing both insurance and securities products.