This is the third in a series highlighting some special “players” in the financial services industry. The focus this month is on product manufacturers, and more specifically, the insurance companies who design and manufacture insurance and annuity products.
Those manufacturers have the very difficult task of designing products that must be competitive and offer benefits that will resonate with the consumer. These products must be easy to understand, offer substantive advantages for the consumer that will add value to their overall financial situation, and, of course, offer enough compensation to be attractive for the agent to sell. They must also be designed to be actuarially sound so that they do not implode on either the company or the consumer.
An insurance company today must also stay on the cutting edge of product design, or risk being left behind by the rapid change and evolution happening in all facets of the industry. Imagine an insurance company in the indexed annuity space that chose not to add a lifetime income benefit to their products. Just four short years ago, these living benefits did not even exist in the fixed annuity business. Today, they are one of the primary reasons why agents sell them.
Indexed universal life insurance and the combination life insurance/long term care policy are great examples of attractive products that insurance companies are designing to fill a particular need that exists.