According to Insurance & Technology’s Anthony O’Donnell, people say they will save more money for their future when they are shown a simulation of themselves in retirement age. His article “New Life & Annuities Sales Tool: Aging Simulation” says that Allianz Life is likely to be one of the first financial companies using the tool. Stanford University researchers are using virtual technology to basically scare young people into saving more money for annuity products and other investments in retirement. Traditionally, insurers have used fear to get people to save more and purchase insurance products like life insurance and annuities. It works because no one wants to die early and leave their family in a difficult position or retire without any way to pay their bills.
At Stanford, they are showing young people images of themselves at retirement age. They have even gone so far as to show the avatars smiling when they save money and frowning when they do not. In one of the experiments, the young people who saw their aging avatars said they would save twice as much money as those who did not see theirs. By the end of this year, Allianz is hoping to have a similar yet simpler version for their advisors to use free of charge. This may prompt more investors to turn to a death benefit annuity, offering survivors the monthly payouts that the deceased would have received. Of course Allianz is hoping that they will see an overall increase in their sales as investors young and old worry not only about their retirement future but the future of those who outlive them.