As I'm frequently reminded by pop-up windows depicting a young girl weeping by a gravestone, fear is an important sales tool for life insurance and retirement benefit products. Scientists at Stanford University are working on a new twist on traditional fear tactics through virtual technology that enables young adults to see images of how they will look at retirement age, according to a Wall Street Journal report. Allianz Global Investors is already planning to devise what the article calls a simpler version of the Stanford technology.
The Stanford researchers suggest that simulations of individuals in their old age makes that phase of life seem more real and less conjectural, and also encourages a certain empathy for the elderly self. Experiments conducted by the research suggests that young people exposed to the virtual experience of their retirement-age self will be more likely to curb spending urges and make decisions to save:
In one experiment, young people who saw their elderly avatars reported they would save twice as much as those who didn't. In another, students averaging 21 years of age viewed avatars of themselves that smiled when they saved more and frowned when they saved less. Those whose avatars were morphed to retirement age said they would save 30% more than those whose avatars weren't aged.
The WSJ article reports that Allianz Global Investors Center for Behavioral Finance wants to create a simpler version of the Stanford technology by the end of 2011, according to Cathy Smith, co-director of the Allianz Global Investors Center for Behavioral Finance:
The firm would make it available free of charge to financial advisers "so they can incorporate it into their practice to encourage clients to save," Ms. Smith says.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio