After getting slammed by the stock market, investors have become more risk-averse — and New York Life Insurance Co. wants to capitalize on this flight to safety.
Last week New York Life launched a print advertising campaign that highlights the financial benefits and long-term guarantees of its whole-life insurance product. The first ad appeared in the December issues of Newsweek, Kiplinger's, BusinessWeek and Forbes and in the January issues of National Geographic and Smithsonian. Two additional ads will run in a variety of other publications. The ads are in addition to a national ad campaign.
New York Life said it increased its 2009 advertising budget by 24%, to more than $35 million.
"I find it interesting that previously the industry's ads were for variable annuities, and now all of a sudden, the advertising is being aimed at whole-life insurance," said Harold Evensky of Evensky & Katz Wealth Management. "It's a sign of the times. The bloom is off the market, so insurance companies seem to be going back to their risk management core instead of the get-rich products. For many years the focus was on getting rich rather than keeping what you have, so this is probably a healthy change."
The first ad in the new series shows the cash value of a New York Life whole-life policy by putting its average annual return next to that of the Standard & Poor's 500 index over the last decade, the company said in a press release. "What we're seeing is a thirst for guarantees in a world where few exist, and we felt it was time to remind consumers that a long-standing product has just the guarantees they seek," Mark Pfaff, executive vice president in charge of U.S. Life and Agency at New York Life, said in the release.
Through Sept. 30, New York Life was 2009's top seller of fixed annuities in the bank channel, according to Kehrer-Limra, a financial services and research company.