We’re still early in 2007 and it’s a good time to revisit the insurance product lingo juggernaut. So that “everyone is on the same page,” as the saying goes.
Of course, getting the insurance sector on the same page about anything at all is no job for mere editors. However, in the spirit of new beginnings, here goes.
Index annuities or equity index annuities? The products started out being referred to as equity index annuities because the first versions of the policies linked their gains to an equity index. But since then, fixed index annuities also link to other types of indexes. And, by the way, they are not securities. As a result, many index pros are now urging the industry to settle on the term “index annuities” as most suitable. For the sake of clarification, simplicity and accuracy, I agree.
LTC or LTCi? Insurance nomenclature has long taken the first letters of coverage names and written the word insurance after it. For example, disability income insurance is DI insurance, not DII or DIi. Likewise, whole life insurance is WL insurance, not WLi. For the sake of consistency, it would be nice to see generic references to the long term care product be LTC, not LTCi. (Those who use LTCi in their business name should continue to do so, of course; business is business. But for industry-level conversations, LTC insurance makes more sense.)
Insurance company or what? Many times, consumers say “insurance company” and/or “home office” when they really mean their own insurance agency or a local or regional branch of an insurer. This is irritating and confusing. It has occurred so often, in fact, that I now routinely ask for clarification before answering questions or providing feedback to statements made about the “insurance company.” Changing the public mind is no easy task, but it might help if the people who work at local and regional insurance offices and agencies make it clear what they are and do.
Customers or investors? If you are talking about securities (including variable insurance products), the buyer is definitely an investor. But if you are talking about fixed interest insurance products, the buyer is probably better referred to as a customer, consumer or saver–terms that are not closely associated with securities.