Ben Baldwin
Jr., President
Baldwin Financial Systems, LLC
Thomas R. Holt
Vice President
TIAA-CREF Life Insurance Company
TIAA-CREF Individual & Institutional Services, LLC.
Paul J. Yakoboski
Principal Research Fellow
TIAA-CREF Institute
December 2008
The life industry is in the midst of fundamental restructuring of how life products are structured and delivered that should improve the scope and adequacy of life insurance coverage across U.S. households. The traditional distribution model of commission-based sales is yielding to new models.
Basic, consumer-friendly life insurance providing pure income protection is becoming increasingly commoditized. Simultaneously, investment-related, no-commission life products providing wealth management capabilities are becoming increasingly sophisticated. Pure-protection products are consistent with a world where people “do it themselves” through direct channels such as the internet. Proper use of investment-related life insurance in the development and execution of holistic financial plans is typically beyond the current training and skill-set of traditional life insurance agents. Proper selection and management of investment-related life products can be profitably managed by individuals or groups with a fiduciary client relationship, such as fee-only registered investment advisors (RIAs).
In this environment, service becomes a primary requirement for meeting the needs of both consumer types. For the buyers of investment-related life products, the life insurer must effectively service the RIA by providing the required product lineup accompanied by real-time information and product control, as well as all required in-house services and competency-compensated agent services.
