Insurance companies are beginning to retool their variable annuities to offer less-generous benefits, possibly at higher costs. The Wall Street Journal reports these changes stem from falling markets that can make it harder for insurers to meet the investment guarantees frequently built into these products, which are tax-advantaged mutual-fund-like financial offerings that often promise a minimum return.

At the same time, the cost of hedging strategies insurers have adopted in recent years to limit their downside on variable annuities has spiked due to market volatility, according to the Journal.

“Retrenching, even to a small degree, on the generosity of variable annuities represents a reversal for the insurance business. Insurers in recent years have chased the potentially lucrative baby-boomer market by making more elaborate promises to ease the boomers’ concerns of outliving their money in an age when life spans are increasing and traditional pensions are on the decline.

“But amid the bear market, insurers’ shareholders have fled the stocks on concerns about the mounting costs of making good on the guarantees, many of which are complex and difficult for consumers and investors alike to decipher. Analysts also are worried about the hedging strategies insurers adopted to protect themselves against the cost of the guarantees,” the Journal reports.