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October 23, 2003 at 08:00 PM
For Now, Its Guarantees And Flexibility
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It is said that when times are uncertain, consumers demand flexibility. Presumably, thats because consumers want to be able to move around as the winds change.
You know the drill: “Give me something that works today but also something that I can change or exit if circumstances change.”
But, where insurance products are concerned, one wonders if that old saw is true. And, what does that mean for your marketing efforts?
The prevailing trends in the life insurance and annuity sector over the past three and a half years suggest exactly the oppositethat, in uncertain times, consumers want safety and security.
We have covered this in-depth in National Underwriter, as the recession twisted and turned through the economy.
For example, fixed annuity sales soared. And other forms of guarantees picked up steam, too. The various guaranteed death and income benefits in variable annuities are one example. In universal life insurance, the lifetime death benefit guarantees and the wide assortment of level term premium guarantees won the day. In disability income, term life and long term care, the various return of premium guarantees turned some heads.
But, thats not the end of the story. Another product development not discussed much lately but that has been here for quiet a while, is the use features that allow for “temporariness” in consumers lives.
That is, plenty of products are very “now” oriented. Well look at some examples in a moment. But first, Id like to tell what brought this point home to me.
In speaking with a newly minted college graduate recently, I learned some things about this persons first job and next goals. When the discussion turned to job-related “bennies,” including health insurance, it turns out this graduate had purchased a short-term medical plan to fill the gap from graduation to benefit start-up at the employer. The reason? “The economy is so bad, I wasnt sure Id get a job right away.”
As for savings, my graduate friend has set up a small but carefully structured savings plan. The hallmark of this plan is flexibility–”I can stop and start it or even cash out to pay graduate school, which I plan to do if I can arrange it or if….”
The remaining discussion revealed more of the same ifs, ands, and ors.
As a point of comparison, I explored the subject with some middle-aged people in my community. (After all, my young friend is just starting out in the world of work. One would expect less permanent orientation at this stage.)
The surprising thing is, I found a similar pattern in many older folks, too. Many say they do want safety and guarantees, and they do make some buys with that in mind (the house, the life insurance, etc.). But, they actually are living and planning for “now.”
