Insurance carriers over the years have experimented with innovative ways of educating consumers about saving for retirement and buying life insurance. We look at three great examples of thinking out-of-the-box and imparting serious messages in a fun way through ‘Games.’

New York Life’s Game of Life

New York Life Insurance Company, in collaboration with Hasbro, has created a customized version of the popular Game of Life, calling it the ‘New York Life’s Game of Life,’ which simulates key financial decisions that people make. Skillfully combining the ‘choice’ that one needs to make (e.g., “Return to School and pay $50,000 or Continue on Path of Life”) at various life stages and the ‘chance’ events that occur during one’s life (e.g., “Hit by a bus. Need Surgery. Pay $10,000″) the Game  illustrates the importance of saving for retirement, purchasing life insurance and long-term care insurance.  The game is also branded with New York Life’s brand message – ‘The Game you Keep, from the Company you Keep’. Ken Hittel, Vice President Corporate Internet, says that the “overriding purpose of the game is teaching the basics of financial prudence and responsibility to children and adults alike.” Darryl Speach, human resources corporate vice president innovation,  goes on to add that:

“Ted [Mathas] (CEO of New York Life Insurance) challenged us to attract the ‘disinterested consumer’ in a new way. These are people who aren’t quite ready to buy life insurance today but who will be at some point. We want to make sure our brand is top of mind for them when they are ready”.

MassMutual’s Right on the Money and Save! The Game

MassMutual’s Right on the Money focuses on teaching kids the importance of earning, saving, budgeting, and charitable giving. A key pillar of this education campaign is the differentiation between wants and needs. A major part of this campaign is the iphone 3-D adventure game called Save! The Game. In this free iphone app the player runs, jumps, and dodges obstacles to collect virtual money before time runs out. The 3-D world is filled with iWannas! - impulse items candy, sodas, etc. that drain cash. The player has to continuously get the collected money to the Bank before one collides with the iWannas! to lose the money. As Nick Fyntrilakis, assistant vice president, corporate responsibility, says:

“Interactive games can be a powerful educational platform for engaging kids on serious topics, and Save! The Game harnesses that potential to bring the concept of wants versus needs to life”. “Our research and experience show that parents are actively looking for new ways to educate their children about the importance of properly managing their finances.”

Visa’s Practical Money Skills for Life and  Countdown to Retirement

Visa as part of  its Practical Money Skills for Life has an interesting game called Countdown to Retirement. This game has a rich set of chance events that occur through different stages of life (e.g., meeting with an accident or medical emergency) and players make choices that fall under three major categories – spending money now for immediate gratification (e.g., going on a holiday), retiring debt or saving money for the future (e.g., transferring the entire bonus into a 401k plan). The player goes through different life stages and based on the choices made and arrives at a point at the end of his or her working life where they have enough for retirement or not. This fun game is a great way of illustrating the trade-offs between current consumption and saving for the future – a key behavioral finance principle called hyperbolic discounting where people prefer rewards that can be enjoyed sooner, rather than latter.

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All these three examples illustrate how to take complex and serious concepts and bring them to life by way of concrete examples in a fun way. The first example educates users on complex products such as life insurance,  long-term care insurance etc., while the second and third get to the heart of trade-offs between spending and saving.

While these games are interesting they barely scratch the surface of what is needed to educate as well as motivate consumers to stop procrastinating and start acting. What other techniques have you considered in addressing some of the behavioral barriers to retirement savings? Do you plan to launch similar interactive and fun ways of educating consumers?

Behavioral Finance in Retirement Planning Part 2: Learning Serious Concepts in a Fun Way is a post from: Connections