The insurance industry isn’t exactly known for its innovation. Basically everything is just a version of something else – and for good reason, because such basic protection products as life insurance already work without having to reinvent the wheel.

One area where insurance producers can inject innovation into their practice is through creative applications of specific product types, such as using whole life insurance to plan for retirement, or exploring options for health coverage on impaired risk clients.

Marketing and prospecting present additional opportunities for new tricks.

Now, the annuity market also appears poised to begin driving innovation in the insurance industry through the increased use of such features as guaranteed lifetime withdrawal benefits, survivor benefit riders, and other bells and whistles.

This year, our 2010 Annuity Market Study found that 38 percent of producers anticipate selling GLWBs on their annuity products in the next 12 months. In addition, 23 percent plan to market and sell income riders.

So why the sudden drive for something different?

As Craig Hemke, president and founder of Buyapension.com, told our associate editor this month, the industry is going to have to innovate just to keep up with all the differing needs and life situations of the 4 million people turning 65 in 2011 alone.

The fact is, however, that many of these special features and add-ons come at an additional cost to your clients. Not only that, but some consumers may be looking for a more classic product rather than an updated, complicated twist on the tried-and-true.

So the key, then, is taking stock of your clients’ needs and proclivities. Are they more conservative, or are they open to risk? Are they financially savvy, or might they be frightened away by the pages of information just one rider can add to their contract? Do they really know what they’re getting into, or do they require more explanation from you? And are you poised to deliver that explanation?

With any new technique, product, or strategy, there is a learning curve. And with annuities, as with anything else, there are clients who will benefit from new approaches, and those who would be well suited by something simpler.

What about you: How do you meet your clients’ needs with annuities?

Christina Pellett is the editor of the Agent’s Sales Journal.