Finetre (Nee AnnuityNet) Looks To 529s, Funds And Life Insurance

"We were very anxious to have VARDS," Chalke says. "In addition, it made sense for AnnuityNet and Info-One to focus on a single technology solution. So we decided to get together and collapse our technology into a single platform."

Chalke's company does business with 31 VA carriers, which represent the vast majority of the companies in the business.

Finetre will expand into 529 plans next because they are the products that are most like annuities, Chalke says.

"There is a broad selection of funds," Chalke says. "It's heavily paper based, and the information you collect is similar."

The problem with Finetre's plan to expand eventually into life insurance sales is that the product does not yet have much of a foothold in the bank and broker channels, Chalke points out.

"So the play for us is to add a limited transactional capability that would not require the bank or broker to acquire all of the required information from the customer, but just to get the application started," he says.

In Chalke's view, the carriers or a service bureau should follow up the application by contacting the customer to ask the underwriting questions that many salespeople are embarrassed to ask.

"You are not going to have a lot of [life insurance] product distribution through banks and brokers if they have the same administrative burden as life agents, with a lot of questions and forms," says Chalke. "The number one thing for life insurance is to change the way the industry does business. It has to change from data collection at the point of sale to a post-sale data collection model. This is a point of controversy, because while there are a number of simplified underwriting programs [for life insurance], the product is expensive and typically carries a small face amount. For most high-level buyers, with a simplified product, they'll immediately notice the price difference."