Big winners: those life insurers who can successfully make the transition from helping consumers accumulate wealth to helping them distribute it stand to win, and win big, in the future.

The future presents the insurance sector of the financial services industry with an opportunity for success that dwarfs all that has come before. This potential bonanza comes in the form of some $25 trillion in accumulated personal wealth that will need to be "decumulated" during extended retirement years and then transferred from one generation to the next. Those who break the tape in the race to the future with solutions to these needs will collect the winnings.

Until now the focus of Financial services has been on providing products designed to encourage the accumulation of assets and methods for efficient asset management. While these efforts have been successful, they represent only two legs of the financial stool and overlook what may be the most profitable segment of financial planning. That is the systematic distribution and transfer of accumulated personal Financial wealth. This is evidenced by the fact that more than 95% of all current benefit distributions from financial institutions are in the form of lump sum payments. This at a time when the most significant emerging need is for systematic income.

We all seem to accept and understand that the most pressing financial issues facing today's consumer revolve around the financial risks and uncertainty of living too long, rather than dying. Yet, for the most part, the response has been a chorus of lip service recognition of this need that has resulted in little concrete action to meet it. Many remain comfortable with what they know best and that is accumulating and managing rather than distributing assets. The price for this complacency will be high.

During most of the 20th century, insurance companies dominated the landscape of Financial services because they met a social need--financial security for survivors--by offering a reliable, safe and secure solution. Life insurance companies forfeited this leadership when they failed to acknowledge and respond to a fundamental change in consumer Financial needs. This opened the door for banks and investment companies to become the stop of choice for the consumer dollar. Now, need and desire of the consumer to distribute and transfer accumulated wealth presents an opportunity--maybe the last one--for life insurance companies to reassert their leadership in financial services.

With retirement time now projected to be measured in decades rather than years, the financial needs are simple:

* Income to live as long as the retiree.

* Income that can be insulated against inflation.

* Income that can be sheltered against the ravages of catastrophic illness.

* Unused wealth must be effectively transferred. The company or industry segment that gets out to the future first with products to meet these needs will be feted and rewarded as a leader.

Once again, life insurance companies have an advantage when it comes to meeting consumer needs. Greed-the desire to have more--is replaced with fear--the concern that there will not be enough. And, insurance companies always do better selling from fear than greed. Only a life insurance company can guarantee that the accumulated wealth will be around when it is needed. Only a life insurance company can guarantee distribution over a lifetime--no matter how long that may be. Only a life insurance company can create protection against the ills of illness. Life insurance companies also can design products indexed to offset inflation and provide an efficient transfer of wealth at death.

In order to take advantage of this opportunity companies must be bold enough to step up and design new concepts that leverage from their strength rather than me-too products that accentuate weakness. For example, why not a single-premium fixed annuity product that offers variable payouts, with a minimum but not a maximum? Why not a single-premium variable annuity that guarantees the initial deposit and shares the upside? What about Fixed and variable products that automatically increase the payouts to offset the costs of catastrophic illness? What about a life insurance policy that pays more for living than dying? It is important to understand that being better means being different.

So, there it is. These may not be all the answers, but failure to find them will doom the life insurance industry to a future of following rather than leading. The life insurance companies have an opportunity to move back into the forefront of the financial services industry, simply by doing what it is they do best. There is only one problem here. Lip service is not going to get you to the future on time.

Robert W. MacDonald, a Best's Review columnist, founded Life USA, which later was acquired by Allianz Life. He currently runs CTWConsulting LLC, and can be reached at [e-mail].