According to Bloomberg News, more than 6.6 million Americans over the age of 65 either worked or looked for work in the first half of 2010. A staggering number of people in their mid-60s or beyond either haven’t retired yet or have returned to the workplace in the last 10 years.
What stands out here is a correlation between “retirees” not retiring, and the rise of guaranteed insurance products, especially guaranteed universal life (UL). As the number of seniors in the workplace has more than doubled, the demand for guaranteed products has boomed.
Guaranteed UL products continue to increase in popularity and number. Understanding why clients want them — and will continue to, at least in the near term — is essential to successfully selling them and effectively serving clients.
The low-interest rate consequence
Retired and pre-retirement Americans have more debt and obligations than ever. And millions of people age 65+ are returning to work because they need to, not because they want to.
For years, our industry’s “current assumption” UL products remained popular, while fixed interest rates stayed high. Now, not only have interest rates dropped, but most market forecasts indicate that rates will remain low while financial leaders try to create conditions that favor market growth.
The low-interest rate consequence for current assumption contracts sold in past years is that performance reality hasn’t lived up to illustrated assumptions. And for new UL sales, illustrations based on current low interest rates are unexciting.
The move to guaranteed UL