Trends that will shape insurance in 2011 include guarantees, hybrid/combination long-term care products, voluntary coverage, product riders and flexible income options, predicts Mark Konen, president of Lincoln Insurance and Retirement Solutions.
"In today's environment, we see a shift towards protection products that offset volatility and solutions that offer flexibility," Konen says. "The need for guarantees has become a compelling driver, along with an increased awareness of risk. As people near retirement, understanding the risks that may lie ahead and planning for the unknown becomes more critical. There is also a movement towards worksite products; as employers search for cost-effective solutions, voluntary coverage continues to grow in importance."
No matter the market condition, 2011 will be strong for:
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1) Guarantees
Consumer risk awareness is rising, and employers are likely to provide more options to protect employees, which include guarantees in universal life, survivorship life, variable universal life and variable annuities.
2) Hybrid/Combination LTC Products
Traditional LTC is typically seen as a "sunk" cost, but a hybrid policy with a LTC rider provides an option by allowing the customer to reallocate cash reserves to a product that offers various benefits, including an optimized LTC benefit, a leveraged death benefit when combined with a life insurance policy and access to cash if needed.
Though employers are still faced with tight budgets, benefits continue to attract and retain top employees, and voluntary plans offer employers an economical option with high-quality coverage.
4) Term Life
Term life provides consumers with a cost-effective plan for immediate protection and will still be used to complement permanent life insurance, which helps wealthy clients meet other needs and goals. Additionally, term life can be a temporary solution for protection with an option to transfer the policy to permanent insurance in the future.
5) Flexible Income Options
Many providers will look to offer variable and fixed annuity solutions to clients, especially those looking for stability, in 2011.
6) Estate Planning
In 2011, carriers are expected to continue to pull their estate tax repeal riders as they become gradually more irrelevant. It seems an estate tax will become a permanent fixture and result in companies re-emphasizing solutions for this market.
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