Longer life expectancies and increased uncertainty in the government-sponsored retirement programs, like social security, make lifetime income planning an increasingly important consideration for Americans. Figuring out how you’re going to support yourself once you reach retirement can be daunting, especially considering the wide variety of financial products available on the market.
An important piece of many consumers’ lifetime income plan includes annuities. The appeal of a financial product that continuously delivers a steady check across the course of its lifecycle is obvious. However, the complexity of the product, as well as the number of options available to consumers, can make purchasing one a seemingly difficult task. This is where Alliance for Lifetime Income comes in.
Alliance for Lifetime Income
Launched in 2018, Alliance for Lifetime Income is a nonprofit organization comprised of some of the largest financial services organizations in the country. Some of the organization’s members include AIG, Allianz, AXA, Global Atlantic, MassMutual, Milliman, Pacific Life, and Prudential. While other organizations like this exist within the financial service industry, like National Association of Insurance and Financial Advisors or Million Dollar Round Table, Alliance for Lifetime Income is one of the few that focus on consumer education, rather than industry standards and regulation.
Its primary function is to help educate the public on the benefits and importance of secured lifetime income through education programs, resources, tools, and insights. Considering the number one fear of Americans approaching retirement is that they will run out of money, organizations like this can provide much needed support and help raise awareness for the many different options available when beginning to prepare and save.
Despite claiming to be ‘not product-specific,’ there’s one piece of the lifetime income portfolio that the organization is particularly interested in educating the public about. One of the key stated objectives for Alliance for Lifetime Income is to help educate Americans on annuity products, which have the reputation of being tricky to understand and purchase.
Expanding the conversation about lifetime income and annuities
Organizations like this play an important role in helping make Americans aware of their options when approaching retirement. Despite the fact that most Americans are nervous about running out of money once reaching retirement, most haven’t even begun preparing themselves for that time. Whether it’s through financial products like an annuity or a diverse retirement savings plan, it’s important to plan for life beyond your career.
Luckily, we live in a time when consumers have access to innumerable options when it comes to saving for their retirement. Because of the sheer number of options, however, education concerning what these options are, what they mean, and whether or not they’re a good fit for an individual’s specific situation is important. That’s why one of the main focuses of Alliance for Lifetime Income is to encourage financial service providers to have these conversations with their consumers during the sales process. “It’s time for them to have a dialogue with their clients about planning for retirement income,” says the organization’s education advisor Colin Devine.
Easing consumer’s through the development of a retirement income plan
This comes back to one of the key issues facing the annuity and life insurance industry today: how do these companies embrace new analytical solutions and tools to better serve their customers?
Moving away from the focus on pure asset accumulation and towards best serving their new and existing customers is vital for an industry looking to stay relevant in an increasingly interconnected marketplace. It’s no longer enough to simply sell a financial product to a consumer, it’s now expected that the company support that customer throughout the lifecycle of that product through value-added services.
Helping customers prepare their lifetime income portfolios can be one piece of that puzzle. With life expectancy increasing, as well as the number of options available, it’s harder than ever for customers to know what’s best for them when it comes to retirement planning. Alliance for Lifetime Income hopes to address this by educating consumers on how to help themselves, and financial service providers on how to help their consumers.
How does the changing nature of financial service products influence the conversation?
Not only is the number of options available to consumers increasing, but the nature of those products, and how consumers can access them, is also evolving. Financial services and products are changing, becoming more interactive, personalized, and accessible, even within the annuities space. New, innovative approaches to these products makes it easier than ever for consumers to get a product that fits their unique needs. It also means it’s even more important that there’s an easy place for consumers to learn about their options when planning their lifetime income portfolios.
The changes in these products leads to a natural change in the conversation surrounding them. This is where organizations like Alliance for Lifetime Income become so important. Providers must keep the conversation relevant to new and existing consumers who may want help or more information concerning their retirement plans. Not only will this help the financial service industry mature to suit today’s market, but it will also deepen the relationship between these companies and their consumers, resulting in happier customers and more relevant financial products in the market.