Insurers Scale Back Living Benefits: Study
An increase in life expectancies has prompted some U.S. insurers to scale back their contract guarantees.
According to The Cerulli Edge - Retirement Edition, a report from research firm Cerulli Associates, half of the insurers surveyed indicated they are planning to decrease the number of product offerings that include living benefits in the next three years. Another 27% said the number of offerings will remain the same.
Cerulli warned that one of the major retirement concerns is the possibility of investors outliving their savings, either because of insufficient accumulation or increasing life expectancies.
“Asset managers have realistic expectations for insurers' plans for guaranteed retirement income opportunities,” said Bing Waldert, director at Cerulli. “Managers may benefit from collaborating with insurers to design the next generation of retirement income products focused on placing the consumer back at the center of the value proposition, and emphasizing how it will help investors retire more securely.”
The Cerulli Edge - Retirement Edition examined alternative retirement income solutions, with a close look at the new retirement income products that exist outside the traditional scope of mutual funds and variable annuities with guaranteed riders, according to Cerulli.