The same thing applies at the consumer level. A standard immediate annuity is a relatively simple product — a consumer pays a lump sum up front and gets back a

The same thing applies at the consumer level. A standard immediate annuity is a relatively simple product — a consumer pays a lump sum up front and gets back a stream of payments for the rest of his life. Ditto for standard term life insurance — consumer pays a premium and he dies his estate gets a payout. Both of these markets are competitive, products from different sellers can be directly compared, and margins are relatively tight. But as you add more and more riders, variants, bells, and whistles the products become less comoditized and more profitable for companies that issue them. Their profit is your cost.