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What comes after the GMWB?
By Steven
The GMWB has been extremely successful, and is the best selling living benefit for insurance carriers. Forward-thinking clients don't want to rely solely on GMWB's success and have begun to think about what the future holds for the industry - beyond the baby boomer generation. They are strategically exploring which riders need to be developed for those who were born after the baby boomers (born 1943-1960, now age 47-64).
kasina develops new products along with our clients by looking at the characteristics of a specific target audience. Each generation has a new set of goals, and faces fears that didn't affect previous generations. Gen X (born 1961-1981, now age 26-46), the next generation after the baby boomers, is moving quickly towards a future where they expect to face:
- Escalating health care costs in the face of increasing longevity
- Devaluation of the real estate market
- Massive inflationary pressures
This generation also:
- Gravitates toward highly customizable products
- Is committed to charity and philanthropy
- Has grown up with rewards programs
VA product innovations have to reflect these needs and preferences.
To market to GenX, annuities need to be customizable, while still addressing a diverse array of social concerns. Simple, intuitive solutions will be the most sought-after.
Variable annuities are too complex for the average investor and advisor. Generation Xers, more so than their predecessors, like to understand and be involved in their purchases.
The next generation of riders will have to:
- Address their specific interests and concerns
- Be customizable, with transparent pricing
- Offer various insurance ties
- Offer "rewards," such as a % of return given to charity, or cash back
The next generation is looming. It is now time to start thinking about their needs and retirement fears to build the rider for the future.