Now that 2011 is coming to a close, life insurers are looking ahead to the new year to try to find out what they can expect from their near future.
Though this process is a very cloudy one, as it is impossible to make precise forecasts about the way this market segment will perform, it is still important to try to get an image of what the future may hold. Among the more common predictions are the following:
• A larger number of consumers will be starting to think about their futures – There are already many indicators showing that consumers are being more careful with their money, because they feel uncertain about the future. For example, Forbes released a report that said that consumers are being “understandably conservative” in their credit card use, and the Federal Reserve has noted that the household liabilities how have a 119.3 percent disposable income, where it was at 135 percent in 2007.
• Estate tax actions should be rapidly taken – Beginning on December 31, 2012, the tax exemption for the $5 million per person estate, gift, and generation skipping, will come to an end, and it will return to its previous level at $1 million on January 1, 2012, with a maximum tax rate of 55 percent.
• Life products will become more capable of meeting consumer expectations – with the continuing focus of insurers on the needs of the consumer, the life insurance products available will evolve and increase in popularity.
• Competition will grow – a larger number of players are expected to enter into the life insurance marketplace, including wire houses, banks, property & casualty agencies, accountants, online marketers, and many others.