Taken literally, the statement is quite true. But, while he appears to understand the basics of gifting those policies to an ILIT during the insured's lifetime, he evidently hasn't thought of the possibility that the ILIT could have been the purchaser in the first place. I have NO problem on that point. I am very serious in that question. Lifetimes are getting longer.
Centenarians are no longer rare, and getting less so.
I can find nothing to argue with you about in your post because it is very important to factor in how the advisor is to get paid. My real beef with VA's is like VUL, most agents that I come across, don't understand the product well enough to sell it in the most suitable siuations. They are more concerned about easy commissions. Add what you consider to be a FAIR fee, as a percentage of Assets Under Management. Many financial advisors haven't.