Many field reps note that the sagging economy has had an impact on consumers’ attitudes towards risk.

“What’s a little different now is clients are looking for guarantees,” says Bob Kaiser of Kaiser Financial Group, Inc., Fanwood, N.J.

Kaiser says people now have a better understanding that interest rates fluctuate and that mortality charges and expenses can change–his clients want to know what their premium will be regardless of these factors.

Insurance companies have responded to these demands with the development of guaranteed products–most notably, through offering secondary guarantees on universal life products.

“There’s a shift in product,” says Kaiser. “If you’re buying insurance for a death benefit purpose, I feel that UL with the guarantees are just more competitive.

“People like the guarantees, they don’t want any surprises,” he says.

Bob Buxbaum agrees. “We’re seeing a turn back toward more traditional guaranteed type products, as opposed to variable universal life.”

Buxbaum describes how his clients’ attitude toward variable products has changed. “When returns are in the double digits it’s hard to say no,” he says. “But all of a sudden reality has given us a big slap in the face and it isn’t always double-digit returns.”

Buxbaum’s clients have begun to view their insurance holdings as an area where they do not want any exposure to risk. “When you talk to people who have already built their wealth, they lay off the risk when talking about their estate tax picture.

“Almost invariably, our clients say, ‘No, let’s not take risks here, we’ll take risk someplace else,’” he says.


Reproduced from National Underwriter Life & Health/Financial Services Edition, March 4, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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