Talking index products with
Genworth’s Charlie Gipple
Index products have become a welcome option at a time when persistently low interest rates continue to challenge
cash accumulation opportunities, according to Charlie Gipple, national director of
index products at Genworth. That’s because
index products provide clients with an opportunity to receive index-linked interest,
potentially capitalizing on the upside of the
market without the downside risk.
As clients experience flashbacks to 2008
— and even the early 2000s — Gipple says
it’s no wonder even risk-tolerant customers
are still relatively hesitant about reentering
the market. So, between fear of market fluc-
tuation and confusion over the multitude of
life insurance and annuity options, consum-
ers are in need of professional guidance
now more than ever. In the following Life
Insurance Selling Q&A, Gipple addresses the origins of index products, offers advice on
educating clients, answers “why now?” and more.
Life Insurance Selling: What was the impetus for creating index products?
Charlie Gipple: It began in 1994, the year Fortune magazine dubbed the “Great Bond
Massacre.” The market ended on a down note, and consumers realized the perceived safety
of bonds wasn’t a sure thing. Additionally, interest rates had fallen steadily since the early
’80s. Insurance companies recognized an opportunity to provide products that benefit from
a strong market — and thus provide more upside than traditional fixed products — while
at the same time, eliminate downside market exposure. In 1995, they developed index annuities, followed by index UL in 1997. With the introduction of these products, consumers
finally had options that allowed them to safely build value without the risk of losing their
principal solely because of market downturns. The environment that was the genesis of
these products is eerily similar to the environment we find ourselves in today.
LIS: Despite being nearly 20 years old, index products are still a source of confusion
for consumers. To what can you attribute this and how can advisors provide a simple
explanation of what these products do?
Gipple: Perhaps one of the most important roles advisors and agents play is that of fi-