When life insurers lecture us about our inability to save money, it's time to tune out. Last month the President and CEO of LIMRA, Robert Kerzner, told the Federal Insurance Office that Americans "choose immediate gratification over long-term well-being" and, consequently, aren't planning for retirement.

In case you're wondering, LIMRA used to be the acronym for the Life Insurance Marketing and Research Association, but it no longer refers to itself that way. So, with life insurance ownership at a 50-year-low, it's not surprising that Kerzner is telling us what we're doing is wrong: Not buying life insurance.

Product placement

But just because we’re failing to buy life insurance – including whole life insurance with with low interest rates -- doesn't necessarily mean that Kerzner and LIMRA are right.

LIMRA's own figures show that when people find a product they like, and one that works for them, they buy. And that is exactly what happened when life insurance companies sold very appealing variable annuities in the earlier 2000s. These annuities provided not only a lifetime guarantee of income but also the advantage of investing in rising stock funds during the boom years when the DJIA nearly doubled, while still offering a fixed rate of gain, usually 7 percent, even if the market dropped.

Sales set an all-time record of $184 billion in 2007 and this product provided welcomed relief when the market plummeted in 2008 -- which would have otherwise wiped out these gains.

And because of that downside protection, when the stock market took a tumble it wasn't the public that took the fall. It was the life insurers. Thanks to their generosity, variable annuity policyholders were well protected and some insurers, like The Hartford, almost went bankrupt from the losses.

Smarter than the average insurance company

Here's the irony. Many life insurers now are trying to wiggle out of these variable annuity contracts by offering annuitants a one-time cash payout. Simply said, "We want you to choose immediate gratification over long-term well-being."

Another irony: Most long-time policyholders aren't taking the bait, according to The Wall Street Journal. As a result, these life insurers now "face charges against earnings potentially totaling billions of dollars."

Why? Insurers thought that most of these annuitants would let their policies, and the lifetime-income guarantees that came with them, lapse. As a result, two of the largest sellers of annuities, MetLife and ING, already owe nearly $3 billion. So insurers are fighting back. The Hartford is literally forcing owners of these variable annuities to switch part of their holdings to bond funds or lose their guarantees, and AXA Equitable is trying to shift its policyholders into index funds.

Losing their luster

According to LIMRA, sales of variable annuities have been declining for a year and a half and were down 6 percent in the first quarter of this year due to the fact that variable annuities are losing their luster. Llife insurance companies now offer guaranteed returns about 2 percent lower, management fees are higher and stock fund investment choices are meager at best.

Life insurers seem more than willing to accept the decline in sales if it means not having to give up that much in the future. In fact, you could say these insurers are finally heeding their own advice and paying more attention to their own "long-term well-being."

Variable annuities co-mingle an investment account, usually positioned in the stock market, with an insurance policy that assures a guaranteed rate of return, as well as funding for retirement.

Fixed annuities offer a CD-like investment with a guaranteed rate of interest which is usually more than what a bank would pay due to its longer duration. Payment can be immediate or deferred depending on age and need.