InsuranceNewsNet Magazine - September 2021

SPECIAL SECTION: LIFE INSURANCE THOUGHT LEADERSHIP • PAGE 27

How 9/11 Changed One Agent’s Business Forever PAGE 12

Celebrations Such As LIAM Mix Fun With Facts PAGE 63

Arwen Becker: The Female Market Is Not A Niche PAGE 8

Looking Amid COFor Life VID-19 PAGE 18

Feeling T Closing The Need, he Gap PAGE 2 2

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IN THIS ISSUE

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SEPTEMBER 2021 » VOLUME 14, NUMBER 9

18

HEALTH/BENEFITS

FEATURE

50 The 3-Part Plan To Attract Gen Z Employees

Looking For Life Amid COVID-19

By John Hilton and Susan Rupe With consumers more aware of their mortality, there has never been a better time to sell life insurance, experts say.

INFRONT

12 When The World Came Crashing Down

By John Hilton An increasing number of states have adopted some form of the new NAIC update of the Suitability in Annuity Transactions rule.

By Susan Rupe An advisor who lost 51 clients in the 9/11 terrorist attacks reflects on how 24 hours changed his life.

27 Life Insurance Thought Leadership Series Special Feature Section

LIFE

42 The Zero Estate Tax Plan: The Cure For Planning Fatigue

INTERVIEW

By James Cassidy and Ron Sussman Properly structured life insurance is the glue that holds this plan together.

8 The Female Market Is Not A Niche

If you want to market to women, you have to be someone they can trust with their financial concerns. Arwen Becker, author of She Handled It, So Can You!, tells Publisher Paul Feldman that women need advisors who will help them overcome their fear and shame around money.

By Kim Buckey Generation Z employees have a longgame perspective when assessing their benefits packages.

ADVISORNEWS

54 What Same-Sex Partners Need To Know About Estate Planning

By Filomena Gomes Give clients the confidence that their plan is comprehensive and legally binding.

IN THE FIELD

6 NAIC Giving States The Answers

online

www.insurancenewsnetmagazine.com

INBALANCE

56 Don’t Wait To Beat Procrastination

By Susan Rupe Putting off the things we dread doing only leads to increased stress and anxiety.

BUSINESS

58 Marketing: You Need To Be Uncomfortable To Succeed

By John Pojeta Too often, marketing plans are based on ideals instead of facts.

ANNUITY

46 R etirement Strategies Pre-Retirees Can Plan Now

By Mark MacGillivray Annuities can play a major role in planning for savings growth.

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InsuranceNewsNet Magazine » September 2021

Life Insurance & Long-Term Care

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WELCOME LETTER FROM THE EDITOR

This Is Real Life!

A

couple of nights before Thanksgiving 2016, I took a break from holiday preparations to sit down at the computer and read some stories. These weren’t just any stories — they were the entries in the Real Life Stories Client Service Award program sponsored by Life Happens. I was one of the judges for the award program that year, and my job turned out to be a little more difficult than I had expected.

I certainly was familiar with Real Life Stories. When I worked for an insurance agents’ association, a member I knew well had been selected as a winner in 2005. The advisor had convinced a client to keep his coverage at a time when money was tight and he wanted to drop it. A few years later, the client died from cancer and the life insurance death benefit helped his family rebuild.

Another member I knew well was chosen as a winner a few years later. Same situation — a client wanted to drop coverage to save money and the advisor convinced him to keep it. Only this time, the client was a police officer who was killed in the line of duty, leaving behind his wife and two young daughters. Again, the death benefit gave the family members space to grieve and pick up the pieces.

The Real Life Stories we reviewed described many different situations. Thanks to life insurance, a family-owned restaurant was able to keep going after tragedy struck the owner. The cash value in a life insurance policy helped pay for a young man’s care after he developed a debilitating medical condition that ultimately took his life. A husband’s life insurance proceeds helped his disabled widow buy a specially equipped van and maintain her independence.

It was difficult to read all these stories and decide which were worthy of being honored. Each story described a different scenario. But they all had two things in common. The first was that a trusted advisor recommended something that ultimately made a difference in someone else’s life. The second was love. You buy life insurance because someone you love 4

will be hurting after you’re gone. You can’t take away their emotional pain, but you can leave them something that will alleviate their financial pain and help them on the path to healing.

September is Life Insurance Awareness month, and we at InsuranceNewsNet thought this was a good time to welcome The American College of Financial Services back to our pages for the first

Center at the time the first plane hit the tower. Buckwald describes how 24 hours can mean the difference between life and death. Although he said his experience of delivering death benefits to his clients’ widows and parents changed the way he views his profession, he remains haunted by the belief that he should have been able to convince many more Cantor Fitzgerald employees to buy coverage.

As we turn the calendar to a new month, we enter still another month of the COVID-19 pandemic. In many ways, the virus serves as another reminder of the need for coverage.

Even though consumers are hungry and they know they have a need, they still need you to help them fill that need.

time since 2018. The president and staff of the college had contributed a monthly column to our Insights section for a number of years. During that time, they covered topics ranging from diversity in the industry to the #MeToo movement to planning for families of children with special needs. In this month’s column, Steve Parrish recalls his experience delivering a death benefit to a client and discusses how buying life insurance is an act of love.

This month also marks the 20th anniversary of the 9/11 attacks in the U.S. This tragic event drove home the points that life can change in an instant and people must prepare for the unthinkable.

In this issue, Dave Buckwald tells the story of how he lost 51 clients who worked for Cantor Fitzgerald in the World Trade

InsuranceNewsNet Magazine » September 2021

This month’s feature article describes how the industry is facing what some call “the opportunity of a lifetime” as more consumers consider their need for life insurance and as the industry responds by making it easier to obtain coverage.

As longtime advisor Chris Pirtle summed it up, “Consumers are hungry.”

But even though consumers are hungry and they know they have a need, they still need you to help them fill that need.

Make the call.

Susan Rupe Managing Editor

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INFRONT

NAIC Giving States The Answers Regulators are prodding states to adopt best-interest annuity sales rules. The long-term implications could be huge.

higher compensation structure. Consumer advocates say the rule has no teeth and falls well short of true consumer protection.

By John Hilton

Regulators worked on the FAQs for many months in the Annuity Suitability Working Group. One question in particular generated different proposed answers and attempted to address the very issues that make annuity sales uncomfortable for many:

I

nsurance regulators are having substantial success in pushing to get states to adopt a best-interest update to annuity sales rules.

Whether it is enough success and happening fast enough is yet to be determined.

As of press deadline, at least 15 states had adopted some form of the new NAIC update to the Suitability in Annuity Transactions rule. Several more states are in the process of adoption, said Iowa Insurance Commissioner Doug Ommen during a summer meeting.

The National Association of Insurance Commissioners adopted the rule update in February 2020. It articulates a best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation.

With industry representatives and regulators agreeing on a best-interest compromise standard, it was expected that states would give the new standard significant momentum through quick adoption.

But with the outbreak of COVID-19 in 2020, states were slow to adopt the update in the months that followed.

Meanwhile, the Biden administration began making noise about pushing for a fiduciary standard through Department of Labor rulemaking. Always wary of federal encroachment on insurance regulation, state regulators began lobbying harder for faster adoption of the best-interest update.

The NAIC began lobbying state officials last summer and began work on a series of 25 frequently asked questions to help nudge the decision-makers. Those FAQs were adopted recently by the NAIC Life and Annuities Committee.

“This FAQ document has proven valuable as those states have moved forward,” Ommen said.

The NAIC model rule specifically does not establish a fiduciary duty, nor does it ban agents from recommending products with a 6

The Key Question

Why did the NAIC determine that “cash and non-cash compensation” is excluded from the requirement to “identify and avoid or reasonably manage and disclose” material conflicts of interest?

The annuity update determined that “most forms of producer compensation do not present a material conflict of interest with the purchaser, and that purchasers expect producers to be compensated,” the final answer reads.

A disclosure form is also required with all annuity purchases to clearly outline the relationship between producer and consumer as well as all compensation. With that in mind, the NAIC “determined that general incentives regarding production levels with no emphasis on any particular product do not create an unanticipated conflict of interest,” the final answer reads.

The NAIC concluded that sales contests, sales quotas, bonuses and noncash compensation based on sales of specific annuities within a limited time frame “should be avoided.”

The Fiduciary Red Line

New York is the outlier state in annuity sales regulation. The state ignored the NAIC and adopted its own regulation, which applies to life insurance sales as well and sets a high bar for a sale to be in the consumers’ “best interest.”

The future of that rule is cloudy after the New York Supreme Court Appellate Division reversed a lower court ruling that the state Department of Financial Services was within its authority when it issued Regulation 187. The DFS appealed that decision in May. Some are comparing the New York regulation to the dreaded fiduciary rule

InsuranceNewsNet Magazine » September 2021

put in place by the Obama administration. That rule was tossed out by a federal court in 2018.

With President Joe Biden putting the Democrats back in power, the Department of Labor announced in June that it would amend the regulatory definition of the term fiduciary “to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries.”

That has insurers concerned and could lead to further court battles.

In the meantime, Lincoln Financial pulled insurance products out of New York in July.

Lincoln is exiting because its electronic signature process does not comply with the state’s requirements, according to the company’s statement.

“Recently, as part of a review of its electronic signature processes, Lincoln Life & Annuity Company of New York (Lincoln) became aware that the application currently used for its life insurance products sold in New York, does not comply with New York’s requirements for use with electronic processes and platforms,” according to the statement. “Therefore, Lincoln will be suspending new sales of certain term and indexed universal life products in New York until a new, electronic-compliant application and process can be implemented.”

Lincoln is just the latest of many companies that have pulled products from New York under pressure from regulations as well as market conditions such as persistent low interest rates.

For example, John Hancock pulled several life products, leaving only Accumulation IUL and Protection Term as the products it sells in New York.

Where annuity sales regulation ends up might depend on how quickly states adopt best-interest rules in the coming months.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism.

John may be reached at john.hilton@ innfeedback.com. Follow him on Twitter @INNJohnH.

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content each year and have launched or are launching niche websites focusing on safe money investments, retirement news, indexed universal life insurance, estate planning, federal and state employee retirement, annuities, and Medicare supplements, to name a few. After publication, the same content is shared to the user’s social media account and can also be placed on their insurance agent or financial advisor website through automatic feeds and emailed to their drip email list, a service that we also offer.

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A: Our patent-pending processes create customized, original content that is exclusively for the use of one professional, uses content-to-user matching, and is optimized for greater search engine visibility. We publish over 1.5 million words of September 2021 » InsuranceNewsNet Magazine

7

INTERVIEW

8

InsuranceNewsNet Magazine » September 2021

THE FEMALE MARKET IS NOT A NICHE INTERVIEW

S

o you think you know how to market to women? It takes more than designing a pink invitation and sticking some flowers on it to get women to trust you with their financial concerns.

That’s the word from Arwen Becker, who has built an advisory practice on helping women answer their top financial question: “Am I going to be OK?” Becker believes the old ways of trying to reach women aren’t working, and that women need advisors who will help them overcome their feelings of fear and shame around money.

Becker’s first teacher was her mother, who raised eight children as a single parent. The lessons in financial resiliency she learned from her mother and other women inspired her to write the book She Handled It, So Can You! In this interview with Publisher Paul Feldman, Becker discusses her journey to serve women, ways that the industry is falling short in providing advice to them and why everyone needs to plan for the unexpected.

FELDMAN: I saw a video of you working at a wildlife refuge and how you were attacked by a cougar and how that led to your planning career.

Can you share that story?

BECKER: I use that story to help illustrate the need to plan for the unexpected. And I can’t say I’ve ever met anybody else who has been attacked by a cougar.

I had been working with Sasha, a cougar at the wildlife rehabilitation center that I ran after I graduated from college. I was one of four people who could go into her enclosure to work with her.

I used to go in and play with this big rope toy with her. And it was a blast. One day, I had a volunteer, Judy, ask me if she could come in and take pictures of her while we were playing. And I said that sounds great. Sasha was perfectly happy. She jumped down from her perch, and she just loved it, this big, 110-pound

cougar. But when the volunteer shut the door behind me, something changed, and Sasha’s ears went back, her big teeth came out, and she lunged at me and bit my left thigh. Then she let go. And she had these big, huge, enormous paws and these strong, amazing arms wrapped up around my waist.

She bit me on the left side of my chest, and she let go. And she bit me on the right side of my chest, and Judy screamed. She got herself out of the enclosure and left me there to defend myself.

Sasha dropped back down on all fours and bit the other remaining leg that she hadn’t bitten yet. So with one hand in her mouth and the other around her neck, I gave her a swift knee to the chest. And that threw her off a little bit. She let go, I got myself out of the enclosure, and she just went back to purring at the side of the cage. For her, it was just playtime.

That had never happened to me in four years of working with her. I had never had any issues with her, but it was an 85-degree day. I had jeans on, I was wearing a long-sleeved T-shirt and a denim jacket with wool lining on the inside. And so I had severe pressure wounds on both sides of my chest and both of my legs, and a one-inch gash on my palm of my hand, but really nothing too serious.

And I use that to illustrate why you plan for the unexpected. You don’t know if there is a black swan event out there.

You don’t know if we’re going to go through a pandemic or another Great Recession or something unexpected, but good planning really can’t plan for most of those things. So it’s reminding people that you have to plan for the unexpected, even though it might not happen.

That’s certainly one of the biggest challenges in helping people who are moving from their working years into retirement, especially in those early years where you’re trying to convince somebody to spend money while their health is good, when they don’t know how long they’re going to live. And yet they’re like,

“Whoa! Wait! I’m not working anymore. I have less income coming in, but now you want me to spend my money?” So it’s an emotional game to help people get past that because they’ve been thinking about saving and growing their money and now I’m telling them to spend it. That’s just part of an advisor’s job — to be able to get people to the point where they can understand that they are going to be OK long term with good planning.

FELDMAN: You do a lot of research about women and finances, and I was blown away by some of the research that you share.

BECKER: The funny thing is my biggest stance is that women are not a niche.

When you break it down to the facts, women hold more wealth in the country now than men do. Women are the largest segment of the U S population. Women are earning undergraduate and graduate degrees at a much faster pace than men are. And then when you think about the $20 trillion that baby boomers will pass on to the next generation in the next 20 years, that will mean 60% of U.S. wealth will be held by women in the next 20 years.

Yet women are often looked at as an afterthought, and we’re completely guilty of it. We didn’t do any women’s events before 2017. I didn’t do seminars. I didn’t do lead generation. That’s what Randy, my husband, did for 17 years. So I was at the point where I wanted to sell our practice because the strain had just become too much, trying to generate enough leads, the same issue that the majority of advisors have. And I just kind of was done.

I called off the sale of the practice because I really did feel that that was going to be the end of my marriage. However, something had to change. I had this fire that awakened on the inside and said I needed to do something different. I told my husband I wanted to take over lead generation. But I didn’t know how to do this. I had never done a seminar in my life.

I had never done any public speaking. I don’t know why he agreed but I guess he loved me enough to let me make that crazy decision.

About six months later, after getting into seminars and totally sucking at it because I didn’t know what the heck I was doing, I was encouraged to do a women’s event.

September 2021 » InsuranceNewsNet Magazine

9

INTERVIEW THE FEMALE MARKET IS NOT A NICHE I learned, I practiced, I sought out Women are putting less money into re- the father of our three sons. coaches. I learned the basics of how to tirement plans and Social Security than Randy has been in the industry now give a good seminar. And I realized with- men are. Then we saw what COVID-19 for 34 years. We have a holistic practice in 12 months that this was a crazy benefit did; 2 million women left the workforce, in which we do securities and insurance for our 17-year-old practice. So we shifted and that was because of child care issues. products and everything in between. We from 0% of our focus on women to havThe statistic that I hang the majority have a full-time CPA on staff, and we speing 80% of our marketing dollars going of my marketing on is that 80% of men cialize in serving clients ages 50 and older toward women less than two years later. die married, yet 80% of women die sin- — those who are in or nearing retirement.

I was conducting 36 events a year, and gle. She’s going to be left to handle it at About 60% of our business is annuities 30 of those were for women only. We were some point. And yet, so many women and life insurance, and about 40% is sefilling them over and over. I hadn’t seen still don’t think that they know how to do curities. That’s because people are getting this in our practice since the into that arena of less risk and Great Recession. Before then, of wanting consistency as they we couldn’t fill a seminar. And move out of their working years we had the worst response rates and into retirement. We’ve found to mailers consistently for years.

— through the ups and downs of So I saw something different, the market, the dot-com bomb, but I started hearing different the Great Recession, that comthings as well. I heard all these bination of insurance products stories of the thousands of womand securities tends to be a great en I was meeting and the hunmix for clients. dreds of women I was sitting down and talking to who really FELDMAN: How do you felt left out by my industry. It market and what marketing started changing my focus and advice would you give to our focus as a company. And other advisors?

The statistic that I hang the majority when we moved 80% of our of my marketing on is that 80% of marketing to women, we douBECKER: Our biggest focus men die married, yet 80% of women bled our company’s revenue. has been on seminars, whethdie single. She’s going to be left to We went from profitability of er through direct mail, digital handle it at some point. between 29% and 39% to 45% in marketing, Facebook advertistwo years. I saw that in my coming, things like that. That has munity, there was this huge vein of gold of it. They don’t trust their instincts. They still been a very successful part of our women who weren’t coming to tradition- don’t trust their ability to learn, or they practice. Yet the challenge that so many al events. They were getting the invita- aren’t hearing a message that resonates advisors — male or female — face in martions, but they just weren’t coming to the with them. keting to women is not intuitive. So they events. It wasn’t until they finally received That’s why it matters so much to me. change the color of the materials. Maybe an invitation that said “women only” that That’s why I now train advisors how to be they change a little bit of the wording. they felt safe enough to be there. successful at this, because a lot of people But the delivery of the message in the Nothing against men. But it’s just that really struggle at marketing to women event itself is still very generic or it’s not there are some women who think they because they try and do it the same way tailored to them. And it doesn’t resonate don’t understand things, or maybe they as they market to men. with the single, divorced, never-married went through a divorce and they feel like and widowed women who tend to attend they have nothing. BlackRock did a study FELDMAN: Can you tell us about your a women-only event. So it does take edulast year, and I looked at their statistics current practice? cation and training to know how to do it that said 55% of women say investing is successfully. not for “people like me” — 55% of women BECKER: Becker Retirement Group has Then, of course, there are challenges. think that it’s not for them. All that tells been in business for more than 21 years. How do you work with married women? me is that what they’re hearing doesn’t I actually came into the industry with a Because 30% to 50% of my attendees are resonate with them. So they just opt out zoology degree — as a 24-year-old di- married. How do you convert them to an of planning. vorced zoology grad — and I needed to appointment if their spouse or partner But yet you have all these statistics make more money than I could make isn’t there? So there’s no quick fix. I mean, about women, about how the average age doing wildlife rehabilitation. So I ended that’s why so many advisors fall short and that a woman becomes widowed is 59; up getting introduced to somebody, and fail, and then they say it doesn’t work bethat women live longer, so they need more that led to a job interview that turned cause they think that they’re going to apmoney; that 15% of a woman’s working into this 21-year career. And that man ply the same technique that is successful years are spent caring for children or ail- I met — Randy — became my business at their general seminars that are open to ing parents, compared to 1.6% of men’s. partner and eventually my husband and everybody. It doesn’t work.

10

InsuranceNewsNet Magazine » September 2021

THE FEMALE MARKET IS NOT A NICHE INTERVIEW

FELDMAN: What are some of the things men do that make them fall short?

BECKER: I would say being gimmicky — the pink invitations, offering flowers, having people there wearing tuxedos, there are chocolate or champagne fountains. All of these things kind of feel like a Valentine’s Day effort or something like that. They don’t work.

Or presentations that are too data heavy. They either have too many slides or they don’t have enough personal stories or client stories. Women really resonate with those stories.

My book is called She Handled It, So Can You! “She handled it” was a term I used to talk about my mom in an interview once. Because my mom started from less than zero at age 40 and she managed to still make it through, even with all the external circumstances she was dealing with at the time.

There are a lot of women out there the message isn’t crafted for, and so they tune out really fast. There’s not enough personalization in the connection with whoever the speaker is, male or female.

I have a good friend who excels at presenting because he was a pastor in a previous vocation. So he gets the fact that you have to talk to women differently.

And he’s also a father of four daughters.

So when he opens, he talks about his daughters and being a daughter dad. And so it’s about having this connection.

That’s the same thing that we’ve had to teach our advisors as well, because most of our advisors are male.

And so when they start the first appointment, I generate the leads, they sit with a male advisor or we have one other female advisor. They open with their own personal story.

That could be this advisor’s mom had eight kids, and the advisor talks about what it was like for their mom to have to schlep the kids to office parks at night, to help clean, to be able to keep a roof over their head and food on the table.

That story connects people. That makes women say, “OK, well, if they’re starting with something personal, I think I can get myself to the point where I can open up a little bit and tell you something that maybe makes me feel a little bit uncomfortable or that I have shame around.” And a lot of women have

shame and fear around money.

FELDMAN: What are some strategies to get women to overcome their shame and fear around money?

BECKER: You have to take more time in that initial visit. You ask what brought them in to see you or what they remember about the lead source. What resonated with them from our radio program or our seminar or whatever it was. So we get them to open up with that.

Then the next thing our advisors do is go into their own personal story. I tell them my mom took us to an office park at night and we had to help clean because she had to figure out a way to make it work with eight kids.

Going into that personal story right away starts to rip down some of the barriers that we often face. And then we go from that to having this great conversation about their mom or however it resonated with them. We then go into tell me a little bit about your perfect day, when you get to wake up and do what you want to do, go where you want to go — what does that look like?

And so we give them a little bit of time to talk about that. It might be travel, it might be volunteering, or maybe they’re not really sure because they haven’t thought much about it.

But by the time we actually get to the point where we say, “This is the process that we’re taking you through today,” I ask, “Do you mind if I just ask you some questions about how you’re managing your personal finances?” It’s already 25 minutes before I ever ask her for something that might make her feel a little bit uncomfortable.

FELDMAN: It looks like you paint the picture first and then the process comes later.

BECKER: Yes, exactly. And even when we start asking for specifics about their situation, we are very deliberate. We always start with, “Oh, tell me a little bit about your job” and then, “Do you own your own home? How much is its value?” So we go through real estate first, before we ever finally get to that last bit — “How much cash do you have in the bank?” That’s a scary thing to ask

people, because a lot of people don’t think that they have enough savings, or there’s a misconception among women that they need to have X amount saved before they are valuable enough to talk to a planner.

And this is the part that needs undoing. It’s not about first being valuable enough to go sit down with somebody.

Instead, it needs to be: There are people like me and like our company who value you enough to say we need to sit down and talk about this.

Even if now is not the time, I’m going to be able to give you some direction on where you’re going. So you don’t think that all hope is lost for you, because so many women think that it is, and it’s not as bad as they think.

FELDMAN: How do you feel the industry is doing in speaking to women?

BECKER: I’d say it’s doing better. But it’s really struggling.

I’ve been in the industry long enough.

And yet I’m still amazed at how many people disregard or they kind of look at “that little cute thing that I do over there” in serving women, but they don’t take it seriously. They don’t think that it’s a valid lead source. They don’t take time to really pursue it. And that continues to perpetuate a narrative.

I think it’s just we do what we do. I go to these events, and there are almost always men who are talking onstage. So they’re going to talk through their view.

And when I approach it more from “Let’s start with the heart and then go to the head,” it kind of leads to the eye-roll type of thing. And I think that that’s where the disconnect is.

A woman wants to know the answer to one question: “Am I going to be OK?” If we can answer that question for her — not how are we going to do it or what products are going to be most effective — we will be able to communicate in a way that resonates with the woman.

In my book, I’m still talking about financial concepts, but I do it all for story.

And when we can start changing and seeing women as really the predominant force that must get the attention that they need and deserve, it’s going to help everybody.

September 2021 » InsuranceNewsNet Magazine

11

the Fıeld

A Visit With Agents of Change

O When The World Came Crashing Down DAVE BUCKWALD lost 51 clients when terrorists attacked the World Trade Center on 9/11.

Twenty years later, he discusses how the experience changed the way he looks at the life insurance business and describes his biggest regret.

BY SUSAN RUPE 12

InsuranceNewsNet Magazine » September 2021

ne of Dave Buckwald’s clients was fired from his job. That firing saved the client’s life and probably saved Buckwald’s life as well.

In 2001, one of Buckwald’s biggest sources of clients was Cantor Fitzgerald, an investment firm whose headquarters was in the north tower of the World Trade Center in New York. Cantor Fitzgerald lost 658 people — two-thirds of its New York workforce — when terrorists flew an airplane into the tower on Sept.

11, 2001.

Buckwald lost 51 clients that day — 30 of them were life insurance clients, while the others had only disability insurance through him.

Today, Buckwald is CEO of OneTeam Financial in Cranford, N.J. But back then, he was 13 years into an insurance career that was beginning to snowball after a rough start.

Looking back 20 years after the 9/11 attacks, Buckwald said he realized 24 hours can make the difference between life and death.

Buckwald had been scheduled to spend the day meeting with clients at Cantor Fitzgerald beginning at 8 a.m. on Sept. 12. But one of his clients there was fired from his job on Sept. 10. A difference of 24 hours either way, and both men could have been on the 105th floor of the north tower when the plane hit.

In addition, Buckwald had been married for only two weeks when 9/11 occurred. “It made me realize that in two weeks, my wife could have gone from being a bride to becoming a widow,” he said.

‘I Didn’t Have A Lot Of Options’

Buckwald had been in the life insurance business for about 13 years at that point. He started out in 1988, about six months after graduating from Rutgers University, where he played baseball. A former teammate suggested he give the business a try.

“It was not exactly my lifelong dream to be a life insurance advisor, but I didn’t have a lot of options and I saw a lot of young guys doing pretty well at it,” he said. “So I took a go at it, but it was tough starting out — a lot of cold calling.

None of my friends or family had any money, so I wasn’t able to sell to them.”

After a few years, he said, his career began to gain momentum. Things took off when a friend advised him to start selling disability insurance to high net worth professionals.

Buckwald found success selling DI to attorneys before selling voluntary guaranteed-issue multi-life DI to those working at Cantor Fitzgerald. While meeting with the employees

WHEN THE WORLD CAME CRASHING DOWN — WITH DAVE BUCKWALD

IN THE FIELD

RAY STUBBLEBINE/REUTERS/Newscom

“I called a friend who had some clients in the World Trade Center, and he screamed and said, ‘The towers just crashed!’ And I just said, ‘What do you mean the towers just crashed?’ Because you couldn’t even wrap your head around it.” face to face to enroll them in DI coverage, he also cross-sold life insurance and other products. “So I was on the 105th floor once or twice a week,” he said.

He worked with clients at Cantor Fitzgerald for two years prior to 9/11.

“Things were great,” he recalled. “Every year, we would do a new enrollment.

And every time they hired new people, I would talk with them about benefits, and disability insurance was part of it.

“Every year, there would be 30 or 40 new people for me to meet with to let them know about this benefit. It was an ongoing, recurring stream of new people. And when people left Cantor Fitzgerald, they would call me to ask how they could continue this disability benefit because it was discounted, the rates were guaranteed never to go up, and it was portable. It was a great business.”

And then came Sept. 11, 2001.

Life Changed In An Instant

Buckwald was driving through northern New Jersey to an appointment when he heard on the radio that a plane had hit the north tower. Like many people, he assumed it was a commuter plane or a helicopter accident. But when a second plane flew into the World Trade Center’s south tower, he realized the U.S. was under attack.

“I couldn’t even process what that meant,” he said. “But I went to my appointment and afterward, I called a friend who had some clients in the World Trade Center, and he screamed and said,

‘The towers just crashed!’ And I just said, ‘What do you mean the towers just crashed?’ Because you couldn’t even wrap your head around it.”

Buckwald said his initial hope was that everyone he knew who worked in the World Trade Center made it out safely, but he soon realized that wasn’t so. More than 2,600 people in the towers and surrounding areas died on 9/11.

“I just totally lost it,” he said when he realized how many people he knew were dead. “Everybody in my office was hoping and praying. I was crying hysterically in my office, and my manager came down and I was trying to explain to him the magnitude of what happened, of how many of our clients were dead. And I had friends who died as well. I was a mess.”

With so many of its employees dead or missing, Cantor Fitzgerald created an online survivors list where loved ones could go to see whether an employee’s name popped up as being alive. “But not many names showed up,” Buckwald said.

The person in charge of employee benefits at Cantor Fitzgerald set up a hotline where the families of those who died could obtain information on life insurance or other benefits the employees might have had. “I worked with so many other people helping all the widows who were calling and asking, ‘What does my husband have?’” Buckwald recalled.

Survivor’s Guilt

Buckwald said the survivor’s guilt he felt over 9/11 led him to seek therapy. But

he didn’t have much time to process his feelings. He had 30 life insurance clients whose families needed his help.

“I went to a lot of funerals and then I went to work to get the death benefits delivered to the families,” he said. “I delivered more than $30 million in death benefits — mostly to widows. But I had a few clients who were single and I delivered death benefits to their parents.”

Although Buckwald had been in the business for a while at that point, he had never delivered a death claim prior to 9/11.

“Up until then, selling life insurance was just a job,” he said. “I never really understood the impact of what we do for a living. But Sept. 11 changed my life, and what I do has become my passion.”

Buckwald said 9/11 drove home his belief that everyone should plan for the unexpected.

“When I look at some of the families that did the planning — bought life insurance, had their legal documents in place — they did the right thing,” he said. “But I was selling to a tough crowd. You had a lot of 35-year-old A-plus-plus personalities, and they thought they were going to live forever and they were always going to make the money. And a lot of them would say, ‘Call me later,’ ‘I’m busy right now,’ ‘Talk to me after I get my bonus.’ That was the mindset I was dealing with. Some of them were too busy and never quite got around to it.”

Adding to the stress faced by the families of those Cantor Fitzgerald employees who died was that the employees

September 2021 » InsuranceNewsNet Magazine

13

the Fıeld

A Visit With Agents of Change

typically were high earners with young children and stay-at-home wives. When the employee died, the high income and the lifestyle that came with it came to an abrupt end.

Buckwald said that when he delivered the death claims, he didn’t know what to do or say to the beneficiaries. “But I just knew I had to deliver them in person,” he said. The parents who received death benefits from their children “were almost catatonic,” he said. Meanwhile, among the wives who received money, “I think some were a little surprised because they didn’t know their husbands had life insurance and some were grateful that I delivered the money to them in person.

“I look at some of the families 20 years later and for those who did the planning, their lives turned out very differently than those who did not do the planning,” he said.

Haunted By Regret

When Buckwald looks back at 9/11, he has two regrets: The first is that he was not able to sell life insurance to more people at Cantor Fitzgerald; the second is that he failed to develop business relationships with his clients’ wives.

“I’m really haunted by the fact that I was not able to convince more people at Cantor Fitzgerald to buy life insurance,” he said. “And when I think about the death benefits that I delivered — more than $30 million — really, it should have been triple that amount. A million dollars in death benefit to the family of a man who was making a half-million dollars a year and has young kids — that’s not nearly enough.”

In selling insurance to his Cantor Fitzgerald clients, Buckwald said he would meet them in their office during their workdays and their wives were not part of the discussion. As a result, he did not have a continuing business relationship with most of them after their husbands’ deaths.

“What I learned from this was, I’ll never do it that way again. Not having a relationship with the spouse — big, big mistake,” he said.

“But it’s not about how much money I paid out to families,” he said. “What about the guy who canceled his policy? Or what about the guy I couldn’t convince to buy life insurance? Those are the things that haunt me to this day.”

14

A Renewed Passion

When Buckwald was a senior in college, his father died unexpectedly at the age of 50. “He had no legal documents, no life insurance, no planning,” he said.

Between that experience and his 9/11 experience, Buckwald said he found a passion for the industry.

“I started thinking, maybe this is my true calling — I can help many people in this world, and I can do it through life insurance,” he said. “It’s not just about selling life insurance; you’re protecting a family.

And by doing that, you’re giving their kids an opportunity and their grandkids, and it goes on down the line. I love the product, but I love how it can change people’s lives.”

Buckwald founded OneTeam Financial in 2019, assembling a team of experts from a variety of disciplines to help successful professionals preserve and protect wealth using life insurance and tax strategies.

Andrew Serzan is managing partner at OneTeam and has known Buckwald for 20 years. “He is always coming up with new ideas and always looking to make life better for our clients,” Serzan said of Buckwald.

Serzan started in the insurance business right after 9/11 and said he too witnessed the impact of proper planning on a family.

“Because I saw Dave’s passion for protecting families after his 9/11 experience, I also saw the importance that our industry has,” he said.

Buckwald enjoys spending time at the beach with his wife and two children. His family has taught him the importance of protecting the ones he loves.

“I always said that I never want my kids’ last memory of me to be the same one that I had of my dad — that he dropped the ball.

He didn’t take care of us, and now we’re suffering,” he said. “I know people don’t intentionally do it, but I look at it as being irresponsible. You get married, you bring a child into the world — you have to take time to plan and protect those you promised to protect.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

InsuranceNewsNet Magazine » September 2021

1. WriteFit and WriteFit Express are available under our WriteFit Underwriting™ program. These statements apply to WriteFit only.

2. After completion of the teleinterview. Information from teleinterview helps determine whether client qualifies for WriteFit Underwriting.

Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods.

These materials are for informational and educational purposes only and are not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

Securian Financial Group, and its subsidiaries, have a financial interest in the sale of their products.

Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer.

Minnesota Life is not an authorized New York insurer and does not do insurance business in New York.

Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state.

Each insurer is solely responsible for the financial obligations under the policies or contracts it issues.

Securian Financial is the marketing name for Securian Financial Group, Inc., and its subsidiaries. Minnesota Life Insurance Company and Securian Life Insurance Company are subsidiaries of Securian Financial Group, Inc. For financial professional use only.

Not for use with the public. This material may not be reproduced in any form where it would be accessible to the general public.

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September 2021 » InsuranceNewsNet Magazine

15

NEWSWIRES

QUOTABLE

Fed Chief Seeks Patience As Prices Rise

As prices rise for everything from a gallon of gas to a box of cereal, Federal Reserve Chair Jerome Powell told Congress: Just give it more time and those price gains should slow, or even reverse.

“This particular inflation is just unique in history,” Powell said to the Senate Banking, Housing and Urban Affairs Committee. “We don’t have another example of the last time we reopened a $20 trillion economy. We’re humble about what we understand.”

The Fed chief blamed surging consumer prices on an unparalleled economic reopening on the heels of a pandemic-induced recession. The result is that it’s more difficult to anticipate how things such as inflation and unemployment will play out. The U.S. reported that prices paid by Americans in June increased more than they have in the past 13 years. Powell acknowledged that the price hikes have been larger than he — and most economists — anticipated.

WILLIS TOWERS, AON CALL OFF BLOCKBUSTER MERGER

Aon and Willis Towers Watson are abandoning their $30 billion merger plan, terminating an agreement that could have made the combined company the world’s largest insurance broker.

Announced in March 2020, the merger hit trouble in June when the U.S. Department of Justice sued to block it, saying the buyout would reduce competition and lead to higher prices. The proposed merger was to bring together two of the “Big Three” global insurance brokers — the third is Marsh & McLennan — and eliminate competition in five markets, Justice Department officials said.

The companies said they would end their litigation with the U.S. Department of Justice, and Aon would pay $1 billion in termination fees to Willis.

GEORGIA INSURANCE CHIEF CONVICTED IN $2.5M FRAUD

A jury convicted Georgia’s suspended insurance commissioner, Jim Beck, on all 37 counts of fraud and money laundering against him at a federal trial.

DID YOU

KNOW

?

16

Beck was convicted of wire fraud, mail fraud, money laundering and tax fraud. He had been indicted months after taking office in 2019.

Prosecutors presented evidence at trial that Beck orchestrated a scheme to embezzle more than $2 million from the Georgia Underwriting Jim-Beck Association (GUA). Beck managed the state-chartered private insurer of last resort for years before he took office. Beck took the stand in his own defense, testifying that subcontractors he controlled provided valuable data that helped GUA increase its profits. However, prosecutors argued the companies did little real work.

LIFE EXPECTANCY SEES BIGGEST DROP SINCE WWII

The COVID-19 pandemic shaved about a year and a half off of U.S. life expectancy, marking the largest annual decline since World War II, according to the Centers for Disease Control and Prevention.

The CDC showed that life expectancy dropped from 78.8 years in

We expect the economy to carry strong momentum into 2022, with growth underpinned by strong consumer and corporate fundamentals.

— Lydia Boussour, lead U.S. economist at Oxford Economics

2019 to 77.3 years in 2020. Hispanic Americans experienced the largest decline in life expectancy in 2020, followed

by Black Americans. Life expectancy for American men declined 1.8 years from 2019 to 2020, while life expectancy for American women dropped by 1.2 years from 2019.

COVID-19 deaths accounted for nearly 75% of the decline.

But COVID-19 wasn’t the only factor to blame for the drop in life expectancy. About 11% of the decline stems from a rise in deaths from accidents or unintentional injuries. Drug overdose deaths, which spiked 30% during the pandemic, made up about one-third of unintentional injuries last year. Other factors that contributed to the decline in life expectancy in 2020 include homicides, which accounted for 3% of the decline, as well as diabetes and chronic liver disease, at 2.5% and 2.3%, respectively.

What’s Behind The Drop In Life Expectancy?

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

75% COVID-19 11% Accidents

SOURCE: CDC

(including drug overdoses)

3% Homicides 2% Chronic liver disease 2% Diabetes 6% Other

COVID-19 scams cost Americans nearly $500M. Source: LIMRA

Source: Federal Trade Commission Source: National Association for Business Economics

InsuranceNewsNet Magazine » September 2021

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ENSURING NO FAMILY IS LEFT BEHIND

By Victor Sanchez

I. THE WHY

My why happens to hit close to home. On May 18, 2017, a little after 5 a.m., my cell phone started ringing. If you’re like me, any time your phone starts ringing in the middle of the night or early morning, my heart starts racing. Most times, though, it’s nothing serious. This time was different.

When I grabbed my phone and looked at who was calling, I saw “Mom.” It was at that moment, before I even answered, I knew something happened to my dad. When I answered, my mom was crying hysterically, telling me she thought he had a heart attack and the paramedics were working on him in the room as we spoke. I asked what hospital he was going to, got dressed, and raced out of the house to a hospital that was only 30 minutes away. That drive still haunts me to this day for a couple of reasons. First, because I can remember the exact street and restaurants around me, seven blocks from the hospital, when I got the call from my sister saying, “Dad didn’t make it.” The second is that my greatest fear of the previous 20 years was about to come true.

2

“You don’t buy life insurance because you’re going to die, but because those you love are going to live.”

ANONYMOUS

3

II. THE BEGINNING As a newly minted life insurance agent and registered representative at the age of 24, I began my financial services career like most rookies — with friends and family. Commonly referred to as your “warm market,” my top 100 list was filled with people who were willing to give me a shot at helping them with their life insurance needs — all except one.

After my first couple of months in the business, I became adept at overcoming some of the objections every insurance agent will hear at some point:

I already have life insurance at my job I don’t need life insurance

I don’t believe in life insurance

It’s too expensive

My dad used every objection in the book and at some point, I realized my “skill” at overcoming objections was not going to prevail. Like many of you, I was trying to overcome years of stubbornness and belief that life insurance was pointless. It was then I saw the responsibility I had — the responsibility every agent has — to emphasize the true power and comfort owning life insurance offers.

And the fact that I could never convice my dad to make the purchase haunted me.

4

III. THE REALIZATION

I began to stress over the logistics… who is going to pay for everything?

After five minutes of sobbing, I gathered myself and drove as fast as I could to the hospital. On the way, I could not help but hark back to the beginning of my career and the arguments with my dad over the importance of life insurance and how he needed to do it for his family. I began to stress over the logistics — where is he going to be buried, at what church will the services be held, and — more importantly — who is going to pay for everything? My own dad did not have life insurance.

IV. THE REGRETS

It’s often said that those who have been diagnosed with a terminal illness and have life insurance have one regret — they didn’t buy more.

My dad started to experience a similar emotion when he realized after his first heart attack, stroke, and diabetes diagnosis that qualifying for a policy was next to impossible. I remember those conversations vividly. We both had regret, but for different reasons. He regretted not heeding the advice of his son the young insurance agent, and I regretted not trying harder.

For most agents, the initial sting of not closing the sale and generating a much-needed commission pales in comparison to the pain they feel when they hear of the individual who said “no” passes away prematurely. On the flip side, when delivering a death claim, the furthest thing from the agent’s mind is the commission they made all those years ago on the sale of that life insurance policy. It is at that moment the agent realizes our purpose is much more important than the premium.

5

V. ‘LIFE INSURANCE IS SOLD, NOT BOUGHT’ This is one of the most common phrases used in our industry. Looking back, maybe this was one of the reasons my dad refused to buy life insurance — he didn’t want to be “sold.” But is it true? Let’s change our perspective and think of it in a different way. I would argue “life insurance is bought when awareness is high and the opportunity to do so presents itself.” Not as catchy, but perhaps a more realistic description of the role you play in the buying experience.

Seasoned life insurance professionals generally don’t have a problem closing a sale once they are at the kitchen table or meeting in their office with a prospect.

The ongoing challenge for most life insurance professionals, and financial services in general, is ultimately having enough prospects to meet with. The approaches thus far have been referrals from existing clients, seminars or lunch & learns, buying leads, direct mail, and of course, the dreaded cold call. For decades these approaches have produced long-lasting careers, billions of premium dollars for carriers, and most importantly, millions of families have been protected.

Why the record lows in terms of life insurance ownership? One reason is the lack of recruitment of new agents into our industry (but that’s a whole different discussion). The other is lack of awareness of the true impact of death, which ultimately influences how life insurance is prioritized in the more dynamic makeup of the modern American family. The mortgage (or rent), car payment, car insurance, health insurance, electric bill, and so on, all take priority over a solution that is voluntary and one that many believe is covered through their place of employment.

That’s why I believe our role really is about creating awareness about what life insurance can do and providing the opportunity for a customer to give his or her family what may be the most important gift they ever receive.

IN 2020,

VI. PANDEMIC BOOSTS LIFE INSURANCE AWARENESS While COVID-19 has impacted millions of lives, families, economies, and livelihoods around the world, there has been one silver lining in the life insurance industry — it has increased life insurance awareness to an all time high.

of people shopped for life insurance because of COVID-19.

This is a higher percentage than a life event (23%) such as marriage or the birth of a child.1 6

That boost led to an 11% increase in policies sold year-over-year in the first quarter of 2021 — the highest quarterly growth since 1983!2 But COVID-19 and awareness were only part of the story when it comes to explaining why life insurance sales increased.

VII. COVID-19: THE DISRUPTOR It’s common knowledge that the life insurance industry has not harnessed the power of technology and evolved at the rate of other industries. While there have been a few enhancements such as e-applications and even instantdecisioning, the overall process consumers endure when applying for life insurance has not changed much over the past several decades.

Invasive personal and medical questions, strangers coming to your home to draw blood and other fluids, and waiting 30 to 45 days, sometimes longer, to get a policy issued. And look out if an attending physician statement is ordered.

However, up until the point the pandemic brought the world to a virtual halt, much of the industry didn’t feel the urgency to innovate and improve the buying experience. Many companies had started experimenting with accelerated and automated underwriting, mostly due to the fear that insurtech companies will disrupt the industry.

It wasn’t until March of 2020, when paramedic services were not considered “essential” businesses and could not remain open, that life insurance carriers had a decision to make — pivot or suffer a significant impact on new sales.

Thankfully, companies who were dipping their toe in the nonmed/automated/ accelerated underwriting process finally jumped in. In fact, about 77% of life insurance carriers surveyed by LIMRA said they accelerated their digital plans due to COVID-19’s impacts.3 With awareness at an all-time high and an improved customer experience, there has never been a better time to help families get the protection they deserve.

“Serving the needs of others is the only legitimate business today.”

Beyond the Claim Check

A.P. GIANNINI, TRANSAMERICA FOUNDER

VIII.

As I learned firsthand, when the worst of the worst happens, most families have three immediate issues to deal with: emotions, financial stability, and logistics (planning and executing the service). When losing a loved one, the family’s only responsibility should be to mourn the loss of someone that meant the world to them. We can help take care of the rest.

Transamerica founder A.P. Giannini once said, “Serving the needs of others is the only legitimate business today.” That was more than a century ago, but today his credo rings true at Transamerica. We measure success by how well we help families save, invest, protect, and build a retirement income, and we are committed to providing solutions that go beyond a death benefit claim check.

7

07/21

IX. PURPOSE OVER PREMIUM

We all know the value life insurance provides. Saving a family from financial ruin, allowing children to realize their college dreams, and keeping a roof over their heads.

While I wasn’t able to get the protection my dad needed, I’m honoring his memory by doing everything I can to help protect families through all of you, the life insurance agent — or as I like to think of you, my partner in leaving no family behind. Winston Churchill summed it up perfectly when he said, “We make a living by what we get, but we make a life by what we give.”

Thank you for all you do.

Victor Sanchez Transamerica Vice President and Managing Director, Wholesale Distribution Dedicated to my dad — Joe F. Villanueva, Sr.

When preparing for your clients’ futures, there’s no time like the present.

Let’s get started today.

Visit: transamerica.com “The COVID-19 Effect: High Tech With Human Touch to Optimize Life Insurance Customer Experience,” LIMRA and BCG, 2020.

2 “LIMRA: First Quarter U.S. Life Insurance Policy Sales Highest Since 1983,” LIMRA, May 27, 2021.

3 ”COVID-19 Impact on Digital Transformation Efforts,” LIMRA, May 2021.

1

8

1695238 © 2021 Transamerica

COVER STORY LIFE DOUBLE FEATURE

Special Section: Life Insurance Thought Leadership • PAGE 27

Looking For Life Amid COVID-19

With pandemic mortality concerns driving high interest, there has never been a better time to sell life insurance, analysts say. But agents must keep up with significant regulation, underwriting and tax changes.

By John Hilton

E

laine Tumicki has tracked life insurance sales data for decades and has never been more excited than right now.

Her enthusiasm is rooted in the new post-pandemic realities. To keep it simple, life insurance is a hot property.

“Even personally, I get excited to see the next month’s sales,” said Tumicki, vice president for insurance product research for LIMRA, during a recent webinar. “I don’t think I ever would have said that before.”

Sales are up by double digits across many products and lines, with records being smashed. Life insurance application activity ended the second quarter up 7.3% for the year, the MIB Index reported, after record-setting year-overyear second-quarter growth.

All signs point to a heightened mortality awareness brought on by the trag18

ic COVID-19 pandemic. The global pandemic’s true costs will undoubtedly end up in the hundreds of billions, with tens of millions of victims straining the health care system.

Nearly everyone is feeling those human costs in some way, with many turning to life insurance for future protection.

“The bottom line is COVID had people worried and thinking about their mortality,” Tumicki said, which LIMRA confirmed with its annual surveys. “In fact, almost a third of consumers said that they were more likely to buy life insurance because of the pandemic than they were before the pandemic.”

IUL Is King

The Dow Jones Industrial Average is up about 80% from a pandemic low of 19,174 on March 20, 2020. Stocks are up more

InsuranceNewsNet Magazine » September 2021

than 30% in a one-year lookback and about 16% from six months ago. In short, the market is flying, with seemingly no end in sight.

It’s no surprise that indexed universal life policies that give owners an opportunity to play the stock market are selling well. In fact, extremely well. May 2021 IUL sales were up 24% over the previous May, LIMRA reported.

“IUL and fixed UL are a much more face-to-face kind of a sale,” Tumicki explained. “It’s a lot harder to sell a product like that online, so it took a while for producers selling those products to adapt.”

A big positive in the insurance business is the versatility of products. The pandemic continues to prove the truth of that statement. In addition to the market-driven IUL products, term life is also selling well, largely through direct-to-consumer channels.

LOOKING FOR LIFE AMID COVID-19 COVER STORY

Indexed UL: 2021 – 2022 Forecast (+) Crediting rate floors (+) Sales momentum (+) IRC 7702 updates (–) Interest rates (–) Flat equity markets Source: Unpublished data, LIMRA, 2021

Risk: AG49-A

U.S. Individual Life Insurance Sales

Source: LIMRA’s U.S. Individual Life Insurance Sales Survey and LIMRA estimates * preliminary estimate

Overall life insurance premium was up 17% in April and 24% in May, Tumicki said, with nearly all channels reporting strong growth.

“My guess is that in 2021, what we’re seeing is more organic growth,” she added. “People are buying life insurance not to replace an existing policy but because they’re suddenly concerned about mortality. They’re recognizing the importance of life insurance and how it can protect their families.”

Illustration Updates

Global Atlantic is a big seller of IUL and has been for many years. The company made a series of deals in 2021 to strengthen its hand in the market. KKR put private equity might behind Global Atlantic by acquiring the insurer in a $4.7 billion deal that closed Feb. 1.

Dave Wilken, co-head of individual markets for Global Atlantic, said the company is going full speed ahead with its life sales strategy. Getting younger people to convert their concerns into actual policy purchases is a priority, he added, one made easier by the versatility of life insurance today.

“We’ve evolved to really have life insurance bring so many different pieces of value not associated with the death benefit,” he explained. “So I think the one thing we’re focused on is to continue the innovation that brings multiple pieces of value to consumers.”

Global Atlantic was one of several insurers that participated in an update of Actuarial Guideline 49 by the National Association of Insurance Commissioners.

The update will restrict IUL illustration guidelines going forward and surely will have an impact on sales.

After a monthslong, at times contentious process, not everyone was satisfied with the resulting compromise.

“I can see the positive in it,” Wilken said. “I think there were some things about it that really limited the opportunity for a consumer, to be honest.”

In the biggest change, IUL products with multipliers or other enhancements cannot provide better illustrations than non-multiplier designs. Also, the new AG 49A permits the IUL illustration crediting rate to be 50 basis points higher than the policy loan rate.

“I think we get to the right spot where there aren’t these more wild illustrations by carriers that were driving some inappropriate potential performance demonstration,” Wilken said. “And there was disparity among carriers, so I think we got back to a level playing field.”

Regulation remains fraught with landmines, and insurers are not opposed to pulling out of markets. Lincoln Financial pulled its insurance products out of New York in July because its electronic signature process does not comply with the state’s requirements.

“Lincoln will be suspending new sales of certain term and indexed universal life products in New York until a new, electronic-compliant application and process can be implemented,” the company said in a statement.

Other insurers are simply exiting the market under pressure from analysts and investors. Principal Financial Group announced in late June that it will stop selling consumer life insurance products and pursue sales of a block already in force.

These trends are likely to continue into 2022.

Tax Changes

It is certain that life insurance products will change in 2022 thanks to a provision included in a pandemic relief bill last year.

The bill changed the IRS Rule 7702 minimum interest rate required on cash value. The rule was originally designed to keep cash value at a certain level below the face value in order to consider it life insurance, rather than purely an investment vehicle.

The rate can now float in relation to actual market rates, but it had remained unchanged since 1984, despite near-zero interest rates of the past several years.

September 2021 » InsuranceNewsNet Magazine

19

COVER STORY LOOKING FOR LIFE AMID COVID-19

COVID-19: Temporary Underwriting Changes Postponed for future travel plans

62%

Required a statement of good health

60%

Allowed medical test results in place of paramedical

55%

Allowed electronic health records in place of an APS

44%

Suspended issue of substandard risk classes

42%

Added questions on COVID-19 exposure

38%

Waived paramedical exam requirements

35%

Postponed for past travel

33%

Expanded automated underwriting face amount limits

25%

Postponed exams until staff can conduct them

25%

Issued at a worse underwriting class in lieu of exams

20%

Expanded automated underwriting age limits

16%

Reduced older age automated underwriting availability

13%

None of these

5%

Source: LIMRA’s “COVID-19 One Year Later: The Impact on Individual Life Insurance,” 2021

2021–2022 Premium Forecast • 2021 sales to date

• Interest rates to stay low for next couple • Consumer interest, of years, but better accelerated outlook than late underwriting, vaccine last year rollout • Consumer interest • IRC Section 7702 after the pandemic changes Source: LIMRA

OVERALL POSITIVE OUTLOOK

“That interest rate was basically hard-coded into the tax code,” Timothy Pfeifer of Pfeifer Advisory told InsuranceNewsNet in April. “The net effect is that people could put less money into their contracts, or, set another way, they could accumulate less money, before violating the definition of life insurance. The industry was at a disadvantage because people couldn’t put in as much money.”

The new rule means consumers can put more dollars into their cash value insurance, but they will also see less face value. Lower face value also means that producers will get less commission, unless companies change the compensation structure.

Carriers are scrambling to reprice 20

products and recode systems because the rule went into effect on Jan. 1, despite industry requests to postpone the effective date until July.

Uncertain Future

Agents have spent a significant amount of time since the onset of the pandemic dealing with change — in particular, application and underwriting changes forced by COVID-19 restrictions as well as a desire by insurers to reduce risk.

Some of those changes will be made permanent, and some things will return to the old ways. There is some speculation that insurers might require a COVID-19 vaccination as part of underwriting. As this issue went to press, no insurer had taken that step.

InsuranceNewsNet Magazine » September 2021

Change is the theme, from the first sales call to the final regulatory approval, but Tumicki and LIMRA remain bullish on life insurance sales for the remainder of 2021 and into 2022.

“We’re thinking right now, low- to mid-single-digit [sales increases] for next year and higher for this year,” Tumicki said. “We’re looking at probably high single digits, maybe even double digits overall for premium growth for 2021.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.

Follow him on Twitter @INNJohnH.

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Special Section: Life Insurance Thought Leadership • PAGE 27

COVER STORY

Feeling The Need, Closing The Gap

The industry faces ‘the opportunity of a lifetime,’ since COVID-19 made consumers consider their need for coverage.

By Susan Rupe

A

s the world emerges from the pandemic, the life insurance industry is hoping to continue riding the wave of renewed consumer interest in the product.

COVID-19 made consumers consider their own mortality — and provided an incentive for many of them to buy life insurance.

The 2021 Insurance Barometer Study

by LIMRA and Life Happens showed that nearly one-third of consumers said they are more likely to buy life insurance because of the pandemic. More than two in five (42%) of those who had the virus said they are interested in purchasing coverage, and one-third of those who know someone who had COVID-19 said they are likely to buy.

The perceived need for life insurance is at a high point, the study showed, with 22

70% of Americans saying in 2021 that they need life insurance, up from 66% in 2019.

But despite people recognizing they need life insurance, the coverage gap remains real, with only half (52%) of American adults owning any life insurance. Of that group, one in four has only group coverage from their employer.

Faisa Stafford, president and CEO of Life Happens, called the study results “the opportunity of a lifetime” for the industry.

“We want to make sure that we capture this moment and not leave Stafford this on the side,” said Stafford. “We know that wants and needs are now aligned more closely together. And we need to jump on that.”

InsuranceNewsNet Magazine » September 2021

“There are so many more people in the market wanting insurance than ever before. So the market is great,” she said. “But when we look at those who don’t own insurance as well as those who are severely underinsured, we see there are more than 100 million people to market to. That means we have a lot of work to do.”

Stafford said her organization was encouraged by the Barometer Study statistic that showed 30% of Americans bought life insurance for the first time in 2020. Those first-time buyers were mainly men, millennials, Blacks, high-income households and couples.

But other market segments — particularly Generation X, Hispanics and women — are underserved.

She called for the industry to continue its use of digital channels to reach consumers where they are and to make it easier for them to buy.

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September 2021 » InsuranceNewsNet Magazine

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COVER STORY FEELING THE NEED, CLOSING THE GAP

Obtained Life Insurance For The First Time In 2020

Source: 2021 Insurance Barometer Survey

More Likely to Buy Life Insurance Due to COVID-19,

by Generation and Gender Total 31% Millennials 45% Gen X 31% Male 33% Female 29% “Consumers have become comfortable living their lives online, and we’ll be happy to be there with them. But we also have to be a step ahead of them,” she said.

“Digital platforms are where the newer generations are headed, and we need to get them educated and ready to take the next step to becoming financially secure.”

‘Consumers Are Hungry’

“Consumers are hungry for information; they’re hungry for products — they want life insurance!”

That was the word from Chris Pirtle, managing director of Peake Financial in Silver Spring, Md. Pirtle was a panelist at Pirtle LIMRA’s 2021 Advanced Sales Forum and gave his predictions on selling life insurance in the post-pandemic world.

Pirtle told InsuranceNewsNet “the consumer wants what we have to sell.”

“They’re hungry, they want to be called, and we have to reach out to them.”

But even though consumers may be eager to obtain coverage, that doesn’t mean they are beating down advisors’ doors.

24

Source: 2021 Insurance Barometer Survey

“Clients aren’t going to come to us, even though they want to talk to us,” he said.

“We have to go back to the basics. We have to make the calls. If we do our activity, our app-tivity will happen as well.”

After 31 years in the business, Pirtle said he has received more calls and referrals than ever before since COVID-19 hit.

“That tells me consumers want to talk to us. But we have to give them the information and meet them where we are,” he said.

With the days of cold-calling prospects behind them, advisors should get up to speed on LinkedIn to reach potential clients, Pirtle said. “It’s the best marketing and prospecting vehicle out there,” he said. “LinkedIn enables you to connect with anyone.” Pirtle said he uses the networking platform to obtain referrals and endorsements from his connections. He also posts information that he believes is relevant to clients and prospects, and makes sure to keep his LinkedIn network updated on his accomplishments.

Accelerated underwriting, which came into its own during the pandemic, is removing one of consumers’ biggest reasons for dragging their feet about purchasing life insurance, Pirtle said.

“With a good portion of underwriting

InsuranceNewsNet Magazine » September 2021

now being done electronically, we can write up to $2 million, $3 million in coverage without having to take any body fluids,” he said. “That’s huge. A lot of folks previously used the underwriting process as a reason not to get life insurance, and now that reason has been taken away.”

Looming Tax Issues Are An Incentive

A new adm inistration and a new Congress bring the prospect of new tax legislation. And that could launch “a perfect storm Stallings for a real renaissance in estate planning and the need for life insurance,” according to Wendell Stallings, advanced sales markets director with Ameritas.

“Advisors really need to be aware of the potential for tax reform, and they need to help clients prepare for it,” Stallings told InsuranceNewsNet. President Joe Biden has called for reducing the estate tax exemption amount back to $3.5 million per person, immediately or retroactively to Jan. 1, 2021. Biden

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September 2021 » InsuranceNewsNet Magazine

25

COVER STORY FEELING THE NEED, CLOSING THE GAP Awareness has led some to take 13% of consumers saying they purchased life insurance for the first time in 2020.

There Is A Heightened Awareness Of The Need For Life Insurance • 59% who don’t own life insurance say they need it.

• 31% say they’re more likely to buy life insurance because of the pandemic.

• 48% of millennials say they plan to buy coverage in the next year.

• 42% of Americans would face financial hardship within six months if the primary wage earner were to die unexpectedly.

Source: 2021 Insurance Barometer Survey

Life Insurance Ownership,

by Types in 2021 has also suggested increasing the estate tax rate from 40% to 45%.

Likewise, Biden proposed doing away with the “step-up in basis” that allows people to minimize or avoid capital gains taxes on inherited assets. But no legislation has been proposed yet, and such a change could have a tough time getting approved by a divided Congress.

But Stallings believes advisors should be proactive and discuss ways their clients can maintain liquidity in their estates should these tax reform proposals come to pass.

“Advisors who have these conversations with their clients now will put themselves ahead of the game should tax reform happen,” he said.

The pandemic taught advisors two lessons that can impact the way they do business in the year ahead, Stallings said.

“One was that successful agents were able to pivot because we were in a situation where we couldn’t see clients in per26

Group life only 26% Individual life only 52% Both group & individual 22% son, we had to do everything virtually,” he said. “Although it did lead to a lot of logistical challenges, it left advisors and clients with greater latitude as far as being able to set up appointments and to be able to discuss and have conversations about the planning needs. And I think that virtual meetings will continue to be an option for clients and advisors in the future.

“But the second thing is that the pandemic provided people with an opportunity to understand they have a significant need for coverage,” Stallings said. “This really has awakened people to the fact that, yes, your mortality is a real thing. And I think for advisors going forward, they need to be able to modify their practice management, to be able to adapt to this new world and environment of being able to work more remotely and virtually with clients, and understand the efficiencies that that can bring about in their practice.”

Consumers’ increased awareness of their mortality, combined with aging

InsuranceNewsNet Magazine » September 2021

Owns life insurance 52%

Does not own life insurance 48% Source: 2021 Insurance Barometer Survey

population demographics, means a bigger role for life insurance, Stallings said.

“We have a large number of baby boomers going into retirement and beyond. And life insurance planning is something that’s very important to them — not only from the standpoint of having life insurance dovetail with their own specific retirement planning but also from a legacy standpoint as well. And we have many baby boomers who have received assets from their parents, and it’s important for them to continue that legacy going forward. Life insurance plays a significant role in their being able to do that.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.

Follow her on Twitter @INNsusan.

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COVER STORY

YOUR ANNUAL “AWARENESS” BOOSTER In this year’s Life Insurance Awareness Month Thought Leadership Series, leaders throughout the industry offer perspective on the trending sales, strategies and products dominating an ever-changing life insurance marketplace.

INSIDE Introducing John Hancock’s All-New Protection VUL

by John Hancock PAGE 28 The Big Shift with Brian Schneier of Simplicity Group PAGE 30 How Allianz Can Help You Rise Above The Competition with David R. Foster of Allianz PAGE 32 How Data Was Life Insurance’s Quiet Hero of the Pandemic, and What’s to Come with Jeff Reynolds and Mike Moran of TransUnion PAGE 34

Indexed Universal Policy: Four Ways to Help Reduce Retirement Risks

by Ron Lee of Mutual of Omaha PAGE 36 Your Agency: Revived! with Elizabeth Kaplan of Crump PAGE 38 Rethink Retirement Planning to Focus on Sustainable Living Standards with Mary Lyons on behalf of OneAmerica PAGE 39

September 2021 » InsuranceNewsNet Magazine

27

The Life Insurance Issue • Special Sponsored Section

INTRODUCING JOHN HANCOCK’S ALL-NEW PROTECTION VUL

Meeting market demand

by offering customers potential value throughout the life of their policy As more life insurance customers seek a carefully balanced blend of security and opportunity, John Hancock is now offering its all-new Protection VUL, (a variable universal life insurance product).

With an age-100 death benefit guarantee, a full range of investment options and attractive living benefits, Protection VUL can help your clients meet their long-term goals for financial security and growth.

When Protection VUL customers pair their policy with the innovative John Hancock Vitality Program, they also gain access to tools, resources, incentives and rewards to help them live longer, healthier lives, including the chance to lower their guaranteed premium by up to 25% over the life of their policy.1 The new Protection VUL complements John Hancock’s portfolio of protectionfocused products, which continue to offer an attractive combination of strong guarantees, competitive premiums and cash value growth

28

potential. Now, Protection VUL stands out for those seeking even stronger guarantees and consumer value, giving it traction against market leaders.

“Our ‘Protection’ portfolio reflects our mission to provide long-term value through a variety of options that help customers address their specific goals,” said Neal Kerins, Vice President, Product Development, John Hancock Insurance. “By providing access to the equity market and a competitive

guarantee to age 100, Protection VUL offers a blend of security and opportunity we believe will appeal to many of today’s consumers.”

Protection VUL is an effective option for your insurance clients ages 35 and older who are looking for a balance of cost-effective, guaranteed death benefit protection

InsuranceNewsNet Magazine » September 2021

with equity-market growth potential.

With optional riders for long-term care and critical illness, Protection VUL also offers comprehensive living-benefit coverage for added financial protection against the unexpected. Additionally, customers who chose to engage in the Vitality program can improve their overall health and earn savings and other rewards — additional sources of potential value to be realized over an insured’s lifetime.

There are two versions of Vitality that your clients can choose from — Vitality PLUS (available for as little as $2/mo.) and Vitality GO (no additional cost) — each offering different levels of rewards and resources to match clients’ needs, goals and interests.

When added to a Protection VUL policy, in addition to the opportunity to lower the guaranteed premium by as

The Life Insurance Issue • Special Sponsored Section

much as 25%1, participation in Vitality PLUS also offers: • Choice of discounted or complimentary wearable fitness device • Savings on eligible healthy foods at the grocery store • Exclusive discounts from Hotels.com • Discounts from popular retailers • And much more!

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control of their financial and physical health,” added Mr. Kerins. “The new Protection VUL with John Hancock’s engaging Vitality program gives customers that exact opportunity.

We fully expect to see thousands of Protection VUL customers take advantage of Vitality to realize significant premium savings and other rewards for their everyday healthy activities like regular exercise and restful sleep.”

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1. Premium savings are in comparison to the same John Hancock life insurance policy without Vitality PLUS. The level of premium savings is cumulative over the life of the policy and will vary based upon underwriting status, issue age, policy type, the terms of the policy and the Vitality Status achieved. Premiums savings are only available with Vitality PLUS.

Variable universal life insurance has annual fees and expenses associated with it in addition to life insurance related charges (which differ with the product chosen), including surrender charges and investment management fees.

Variable universal life insurance products are long-term contracts and are sold by prospectus. They are subject to market risk due to the underlying sub-accounts, and are unsuitable as a short term savings vehicle. The primary purpose of variable universal life insurance is to provide lifetime protection against economic loss due to the death of the insured person. Cash values are not guaranteed if the client is invested in the investment accounts. There are risks associated with each investment option, and the policy may lose value.

Please contact 1-800-827-4546 to obtain product and fund prospectuses The prospectuses contain complete details on investment objectives, risks, fees, charges and expenses as well as other information about the investment company. Please read the prospectuses carefully containing this and other information on the product and the underlying portfolios and consider these factors carefully before investing.

Insurance policies and/or associated riders and features may not be available in all states. Protection VUL is not available in New York.

Some riders may have additional fees and expenses associated with them. Refer to the product prospectus for additional information.

Vitality is the provider of the John Hancock Vitality Program in connection with policies issued by John Hancock. Vitality Rewards may vary based on the type of insurance policy purchased for the insured (Vitality Program Member) and the state where the insurance policy was issued. John Hancock Vitality Program rewards and discounts are only available to the person insured under the eligible life insurance policy. Rewards and discounts are subject to change and are not guaranteed to remain the same for the life of the policy.

HealthyFood savings are based on qualifying purchases and may vary based on the terms of the John Hancock Vitality program. The HealthyFood program is currently not available in Guam.

Protection VUL policies automatically include a no-lapse guarantee called Death Benefit Protection. This feature guarantees that the policy will not default, even if the cash surrender value falls to zero or below, provided that the Death Benefit Protection Value remains greater than zero and policy debt never exceeds the Policy Value. Once terminated, the Death Benefit Protection feature cannot be reinstated. See the product guide for additional details. Guaranteed product features are dependent upon minimum-premium requirements and the claims-paying ability of the issuer.

Products or services offered under the Vitality Program are not insurance and are subject to change. There may be additional costs associated with these products or services and there are additional requirements associated with participation in the program. For more information, please contact the company at JohnHancockInsurance.com or via telephone at 888-333-2659.

The life insurance policy describes coverage under the policy, exclusions and limitations, what must be done to keep the policy in force, and what would cause the policy to be discontinued. Please contact John Hancock for more information.

Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02210 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595, and securities are offered through John Hancock Distributors LLC through other broker/dealers that have a selling agreement with John Hancock Distributors LLC, 197 Clarendon Street, Boston, MA 02117.

Policy Form Series: 21PROVUL, ICC21 21PROVUL Rider Form Series: 20HER; ICC20 20HER, 18VCR; ICC18 18VCR MLINY060321715-1

September 2021 » InsuranceNewsNet Magazine

29

The Life Insurance Issue • Special Sponsored Section

THE BIG SHIFT

How the industry’s transformation to a digital landscape can help you place more business than ever before!

B

ig changes are underway in the industry.

And they could soon elevate your production and your clients’ satisfaction. As you read this, paper apps, products taking months to issue, invasive underwriting and legacy systems are on their way out the door.

And it’s being replaced with modern products that are easy to understand and explain, equipped with automated underwriting, and are issued instantly.

It’s part of a big shift that producers and clients have wanted for years. It’s a shift that came by force, seemingly overnight. And it’s one that’s forced some unprepared or unwilling to adapt to close their doors.

But not all suffered.

Companies remaining at the forefront of agent technology and consumer demands have continued to log month-over-month sales records. And for those like Simplicity Group, which has grown a reputation for creating amazing virtual sales strategies, sales records are growing even faster, thanks to the influx of producers eager to thrive in today’s digital environment.

It’s a smart move, considering where the industry is rapidly headed.

check a lot of boxes,” Schneier began. “This was going to be a revolutionary product. Something that consumers wanted — an IUL that performs well, is easy to explain and apply for, 100% digital, with automated underwriting and instant issue. And it couldn’t have come out at a better time,” he finished.

While the ExecuDex FIUL was released during the pandemic, its roots began long before COVID-19 was an everyday word. ExecuDex and all Simplicity Group’s proprietary initiatives have been designed to help producers excel in a modernized, digital landscape. A land-

“The future has never been brighter for today’s life insurance consumer — instant issue and simplified digital products are here to stay.”

Coming Shift 1: We’re Going Digital

According to Brian Schneier, executive vice president of Life Marketing, Simplicity Group, this new digital channel will soon be the only channel.

“I see three major changes Brian Schneier that are coursing through the industry as we know it. One is to make every aspect of a sale — from the product and underwriting to delivery — 100% digital,” Schneier explained. “You need to offer the products people want, the way people want them, in order to thrive today,” he added.

“When we launched our first all-digital IUL product, ExecuDex, in partnership with F&G, we knew it had to

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InsuranceNewsNet Magazine » September 2021

scape where products will be designed to prioritize a customer’s experience, without complicated formulas.

Coming Shift 2: Products Focused on Customer Experience

As digital continues to become the new normal, tools for digital sales will be enhanced. Customer servicing technologies 24/7 and instant-issue insurance products are prime for industrywide adoption.

“Insurers must evolve to compete and deliver tailored digital products that align with distribution partners.

At Simplicity Group, we have the needs of multiple channels with very different customers that need specific products that fit the advisor’s holistic planning process,” Schneier explained. “The future has never been brighter for today’s life insurance consumer — instant issue and simplified digital products are here to stay.”

Coming Shift 3: Reprioritized Training and Industry Events

While the thought of simpler digital products can be enough to stir panic and make some producers feel obsolete, those attending any of Simplicity Group’s virtual sales training, where attendees are paid for their

The Life Insurance Issue • Special Sponsored Section

time to learn how to thrive in a digitally-focused world, are finding their books of business stronger than ever, many logging record sales month over month, even during the pandemic. The events, open to any contracted producer, have become so popular that Schneier himself can hardly believe it.

“We’re always trying to offer insurance agents the most cutting-edge and relevant material, whether it’s sales strategies or product training. But the content and easy-to-follow advice producers are given at these

The answers Simplicity Group offers allow agents to go far beyond how to just use technology or digital products. In addition to sharing easy-to-follow lead gen and virtual sales ideas, the firm also dives into the most effective social media strategies of the day and provides volumes of bespoke, original content for producers to pull from and share with their audience, keeping themselves top of mind.

It’s a holistic approach that’s handing producers almost everything they need to be successful in today’s

The Big Shift...  Gambling on the next hot index  Archaic underwriting  Product pushing  Single channel planners

IS SHIFTING TO...

 Weighted returns  Instant coverage  Holistic planning  Virtual selling

And producers fortunate enough to adapt are already logging record IUL sales, month after month. virtual sales training events has been so valuable our attendance has increased tenfold,” Schneier exclaimed.

“Even better is that people are applying these methods we’re sharing and having phenomenal success with them,” he happily added.

With speakers such as bestselling author Patrick Kelly sharing the latest virtual selling tax-free retirement strategies and Shark Tank’s Kevin O’Leary, a.k.a Mr. Wonderful, detailing the secrets to online selling for producers, it’s not hard for anyone to find success, especially with a growing assortment of 100% digital products available and a powerful turnkey system for leads.

It’s an earned feather in the cap for any premier distribution group. The secret, according to Schneier, has been the structure of the content presented to producers. It’s a structure that he believes will spread throughout the entire industry.

“In the past, industry and training events have spent a majority of their time focusing on products and product features and less time adapting to and teaching producers how to use technology to work for them to help them see more clients and place more business,” Schneier said. “Those priorities are going to definitely change because what many producers want today are answers. Actionable answers and strategies to help them through this,” he added.

market. And the results speak for themselves. “It’s an absolutely incredible feeling to see these ideas put into practice one day and paying off the next, especially when it comes from a producer who shows up with a skeptical mind,” Schneier stated.

While the big shift may have had an impact for many producers, carriers and IMOs, it also has forced the insurance and financial industry into a new, modern era. For companies such as Simplicity Group, that means more satisfied customers and thriving producers.

For more information regarding Simplicity Group’s virtual product lineup or to register for the next paid virtual sales event, visit BigShift2021.com or dial 844-858-4498.

1734440-0721

September 2021 » InsuranceNewsNet Magazine

31

The Life Insurance Issue • Special Sponsored Section

How Allianz Can Help You Rise Above The Competition

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llianz Life Insurance Company of North America (Allianz) is helping producers position themselves as highly-experienced and knowledgeable in various industries. David R. Foster, JD, AEP, CLU, ChFC, CAP, FLMI, Advanced Markets attorney and Senior Director of Advanced Markets at Allianz, explains how.

supply chain interruptions. These businesses may be looking to recruit key employees with experience in navigating supply chains, and they may be looking for human resources talent to help them address labor shortages.

Understanding the current trends can help producers bring the best sales strategies to the table and generate opportunities.

INN: Dave, how can producers who work with smallto-midsize businesses differentiate themselves in the life insurance market?

INN: What are some other issues and solutions in other industries?

DF: Many producers know the business market in general, but they don’t develop specific knowledge of the various types of businesses.

For the business owners, their businesses are almost like a member of the family, like a child they’ve David Foster raised. They want to feel that their producers understand the unique nature of their business, are highly experienced, and have a high level of understanding about the challenges and issues they face.

This will open conversations and create opportunities.

INN: What exactly is Allianz offering to help producers?

DF: We can help in many ways. For instance, we compile semiannual reports on industry-specific trends, legislation, changing tax laws, and anything else that’s impacting the sector. These reports help producers not only stay informed but also be better prepared for meetings and better equipped to build valuable relationships that are productive and efficient. They give producers a leg up on the competition and maximize their opportunities.

INN: Are there specific concepts or issues producers should be familiar with?

DF: Their clients will need to work with qualified tax and legal advisors when considering various planning strategies, but producers certainly need to be familiar with the basics, such as the core estate planning strategies, key-employee compensation plans, and business succession strategies. But they also need to understand what keeps these business owners up at night.

For instance, if they’re working with manufacturing companies, they should be aware that these businesses are being hit hard by skilled labor shortages and recent

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InsuranceNewsNet Magazine » September 2021

DF: A good example is agriculture, where succession planning is key. A lot of farms have remained in the same family for generations. The owners have a strong emotional attachment to their land. They also want to treat all of their children equally — and some in the next generation may have little interest in continuing the tradition.

So a well-constructed succession plan for an agricultural business owner might pass the farming assets to those children who want to engage in farming and simultaneously purchase life insurance for financial protection.

The death benefit is generally income-tax-free to the clients’ beneficiaries.

Another big issue for agricultural business owners is conservation easements. By donating certain property rights to a charitable land trust or government agency, the landowner can realize a considerable income tax deduction. This might be an appropriate strategy if the client is anticipating a sizable income tax event, but it also lowers the value of the land. So producers might recommend life insurance to help replace that lost value for the client’s beneficiaries.

INN: Interesting. What about issues facing the construction industry?

DF: The construction industry should benefit from increased government infrastructure spending, if and when the government passes an infrastructure spending bill. But in these businesses, surety bonds are essential.

Business owners can’t do their job without them. Their contracts require them.

Surety bonds help provide assurances that construction projects will be completed. In order to obtain surety bonds, the business needs to be evaluated by the bond company’s underwriters. Producers can help business owners pass muster with the surety bond underwriters by reviewing the business’s succession plans and buy-sell agreements, perhaps recommending life insurance for key employees.

The Life Insurance Issue • Special Sponsored Section

Life insurance can also improve debt-to-asset ratios, since the cash-surrender values may count as working capital.

Interestingly, construction companies are having difficulties finding skilled labor at the moment as well. So they’re also going to need to hire human resources professionals to recruit and train more skilled labor. This, in turn, creates an opportunity to offer key-employee compensation plans such as nonqualified deferred compensation plans, bonus plans, split-dollar plans, phantom stock plans, and others specifically targeted to the HR talent they’ll be bringing on.

INN: I see. You mentioned the manufacturing industry. What else about manufacturing businesses should producers be aware of?

DF: A prevalent trend in manufacturing is the internet of things, which refers to linking together technologies to generate data that improves operational efficiency.

Companies need to adapt to that. They need to develop tech-related skills and bring on executives who can manage tech teams. Consequently, they too are going to need key-employee compensation plans.

What’s more, business owners should consider the additional cash flow needs the next generation will have in order to keep up with ongoing technological advances.

One potential solution is to create a trust that’s funded with life insurance. Upon the death of the owner, the trust receives the death benefit and the trustee may make distributions or low-interest loans to the business for keeping up with technology.

INN: Are there unique issues in the professional services space?

DF: It’s a diverse field made up of health care providers, attorneys, engineers, accountants, etc. Many of them are concerned about creditor protection. Generally speaking, they practice in areas that attract litigation.

Also, most serve their clients personally, without using employees or subcontractors, which increases the potential for legal claims against them. So assets that have creditor protection — such as life insurance in many states — may be appealing.

In addition, these firms are often top-heavy; the owners earn much more than the staff. This makes it difficult to contribute to qualified retirement plans for higher

paid employees, including the owner. Cash value life insurance may be the answer. It allows for tax-favorable withdrawals and loans from the available cash value1, as well as a generally income-tax-free death benefit.

INN: Lastly, what do professionals need to know about commercial real estate?

DF: Commercial real estate businesses regularly buy and sell property. As a result, capital gains taxes are a big concern. Producers should be familiar with capital gains tax deferment strategies — such as 1031 exchanges, which allow you to defer capital gains taxes when you sell an investment property and reinvest the proceeds in a similarly valued asset within a certain time period. Other options include Delaware statutory trusts or real estate investment trusts (REITs), which may appeal to clients who want to remain invested in the real estate market but don’t want to actively manage the properties anymore.

More aggressive strategies — such as deferred sales trusts — are often marketed as tax-deferment strategies, allowing property owners to sell assets to a third-party trust in exchange for a promissory note. Producers should proceed with caution, have the client work closely with their tax and legal professionals, and understand the IRS may challenge these arrangements. They also are not approved as a recommended strategy by Allianz.

INN: Thanks, Dave, for these fascinating and worthwhile insights.

It’s clear that getting to know each client’s specific business and market segment is vitally important for providing better service, generating ideas, and maximizing opportunities. Producers need to know not just the financial products available but the best applications of them.

By understanding clients’ businesses from the inside out, they can pinpoint potential solutions for every need and situation and outshine their competitors.

For more information and insights, visit AllianzAdvancedMarkets.com or call the Advanced Sales and Practice Platform Team at 888.900.1530.

1 Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse.

Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Fixed index universal life insurance requires qualification through health and financial underwriting.

Producers should encourage their clients to work with qualified tax advisors or attorneys when considering the various planning strategies.

This content is for general educational purposes only. It is not intended to provide fiduciary, tax or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote or recommend any tax plan or arrangement. Allianz Life Insurance Company of North America, its affiliates, and their employees and representatives do not give fiduciary, tax or legal advice. Customers are encouraged to consult with their own legal, tax and financial professionals for specific advice or product recommendations.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.

Products are issued by Allianz Life Insurance Company of North America, PO Box 59060, Minneapolis, MN 55459-0060.

September 2021 » InsuranceNewsNet Magazine

33

Offer greater acce in an increasingly d

The Life Insurance Issue • Special Sponsored Section

How Data Was Life Insurance’s Quiet Hero A new frontier for life ins of the Pandemic, and What’s toinsurance Comerisk scores (“in Credit-based

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key make-or-break factor for any business or industry during the COVID-19 pandemic has been the ability to shift business online and provide “contactless” service. This holds particular pain for an industry built on home paramedical exams and handshakes across dining room tables, but the solution has actually been here the whole time, and it all comes down to some innovative and powerful uses of credit-based and non-credit-based data.

This Q&A features TransUnion’s Jeff Reynolds, whose background and expertise center on insurance product development and strategy, and Mike Moran, a 45-year industry veteran — from life insurance to securities — who led their company’s shift into the life insurance space.

They tell the story of how TransUnion and digital data solutions are vitalizing the life insurance industry, including a behind-the-scenes look at how they custom-fit their solutions to position carrier success and customer satisfaction throughout the product life cycle.

Q: What is the importance of credit-based risk scores to today’s life insurance industry?

Reynolds: Credit-based insurance scores measure the behavioral responsibility of individuals. People who manage their finances well tend to also manage other important aspects of their lives responsibly, such as avoiding smoking or excessive Jeff Reynolds drinking, and instead maintain a healthy lifestyle. Insurance scores have been very stable as a risk indicator, and have shown stability even during the global pandemic.

Moran: Since it’s calibrated on long-term behavioral aspects, even though the death rate is up, the pandemic has not affected our TrueRisk® Life credit-based insurance scores one basis point.

Credit-based risk scores, specifically from our product TrueRisk Mike Moran Life (TRL), helped both the carrier and consumer during the pandemic, when no one wanted to let a paramedical professional into their house and doctors were unavailable to create the reports. By enabling accelerated underwriting, TRL helped our

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InsuranceNewsNet Magazine » September 2021

existing customersgoing do significantly more business scores” forward) haveduring been COVID-19 than they did previously.

succ to more accurately assess risk and pric Reynolds: Moving forward, this speed to market will personal automobile and insu continue to be crucial.

Consumers more andproperty more are gravitating toward online distribution channels. Using for more than insurance two decades. insurance scores ensures carriers areThe able life ins to accurately predict risk, and it provides products to industry, inthat contrast, has only recently customers at a price accurately reflects the cost of insurance, allowing products to be delivered much deploy them for life insurance underw quicker, which is what people want in the digital age.

Q: How are insurance risk scores calculated?

Insurance risk scores provide

significa in an digital-forward Moran: The increasingly gold standard has always been the Social indus Security Death Master file (pre-2012), which was our life insurance the source document when weproviders built TrueRisk also Life. Ofrealize the approximately 800 credit attributes of a consumer, we enable morethat accurate premium identified 25 categories were predictive of mortal- pricing ity, which can be put into four buckets. there may be concerns as to the releva The first provides a consumer’s credit profile, like the length credit history and number ofto credit lines. A onof credit information underwrite cu second bucket is shopping codes, which include applications for loans and as credit cards.

The third is the conespecially the COVID-19 pandemic r sumer’s utilization of credit, such as average balances, debt United to credit limit.

The fourth bucket is the derogatory States economy. codes, such as bankruptcies, collection delinquencies.

This is not a credit score.

The TrueRisk Life score is calibrated to mortality. We use long-term attributes. Somebody can’t just make changes in their financial credit management to move the TRL score.

Q: How else do data solutions benefit insurance carriers?

Moran: TransUnion is best in class with its matching capabilities. We have credit data on some 350 million credit-active consumers. To be able to identify the right John Smith is spectacular. Furthermore, we use non-credit data as well to provide a diversified solution suite from cradle to grave, through the whole life cycle.

Reynolds: We can help carriers target the most profitable customers. We can help them properly segment risk and underwriting, make sure that they can verify the identities, especially digitally, and also allow them to monitor policies to keep the information current and accurate, and fulfill their fiduciary responsibilities as a © 2021 TransUnion.

Allthem Rights | Page 1 | 20-866765 life carrier, by notifying if Reserved there has been a mor-

ess to financial security digital world

The Life Insurance Issue • Special Sponsored Section

tality event that they need to investigate and get the life Q: How are a life cycle’s worth of solutions tailored insurance proceeds to the hands of the beneficiary as to different carriers? soon as possible.

We just developed a solution for the group life marReynolds: Typically, if we’re building a marketing ket that allows those carriers to aggregate the individmodel, we’ll get what we call a seed file from a customer, nsurance risk ual risk level of employees up to the employer level so which includes as much data as they can provide from theyused can get a relative riskgood profile ofnews that employer.

It’s insurance a known group they’ve advertised to. It may include cessfully The is that risk scores increase a brand-new pricing solution. It’s much more granular response data, conversion data, the names of the people than just looking like an in SIC insurance code. who converted, conversionTransUnion channel, whether the conce coverage for at something objectivity decision-making. sumer had a loss or any other data points that support uranceQ:policies How are TRL scores leveraged for targeting capa- underwriting the key performance indicator theon carrie r’s trying to data shows that basing decisions these bilities on the marketing side? optimize. surance insurance risk scores helps Weproperly take that seed identify file and applyhighadvancedand modeling to Moran: The old paradigm was that many insurance it and then correlate the different datasets that we have y begunsalespeople to low-risk and does use or contain anyone of them, would typically quotecustomers a preferred risk rate here at not TransUnion, TrueRisk Life being level, and then once it went into underwriting, maybe and turn that into a predictive model that can score any 1 riting. something was picked information regarding or ethnicity.

The up and it ended up being issued income, consumer race in the United States. Then, based on that seed “other than applied for” at a standard higher rate level file, we can identify which data elements in our data data also shows that scores have been very stable — not a great customer experience. What’s happening library are the most correlative to that particular cusant advantages is that risk-based quoting isthe moving to the leftof intothe the pandemic, tomer who was a high converter, highthey’re lifetime value. overcarriers course indicating that stry, and mostspace, helping marketing reinforce brand repThere are many ways we can build and customize these utation and customer sentiment by metric delivering aover more the models andterm, marketing campaigns to deploy across difa valuable long even during ese scores seamless experience. ferent marketing channels.

Carriers can target specific customers based on an1 If the carrier is looking at a solution for their undereconomic downturns. g. However, insurance score that would qualify for their traditionwriting program, we can do a validation of the solutions and digital marketing programs, or they can utilize their historical book to evaluate the lift and protective ance ofal relying All in all, consumers gainon greater access, more financial aggregated data to target a broader group of consumers. value of the solution. TransUnion has a team of industry Every quarter, we score 350 million consumers with TRL experts who understand your business. We work in partustomers, protection and an improved customer experience when scores. We then bucket those TRL scores into ZIP codes nership with you, and you can test the solutions before with minimum aggregation rules strictly enforced.

Now, committing. ravages the life insurance companies use insurance risk scores as part there’s no personalization. That aggregated data can be used in marketing. of their underwriting process Moran: Yes, we can build every Insurance Risk Scores — all things provider for Life Insurance The consumer who hesitates to give any of their permarketing models for in the COVID-19 Era and Beyond should strive to seems deliver, in the era. sonal data, on a landing page for example, OK especially testing, at no cost.

Ulti-COVID-19 providing a ZIP code. This is how TRL has been reengimately, we try to be a neered to be a marketing solution that helps with the trusted advisor and not a Offer greater access to financial security in an increasingly digital world user experience, defining the journey, quoting the right data vendor, understandrate, and not surprising them at the end of the process. ing what our customers need in order to grow and Q: Just how many customers can ultimately get sustain a profitable busiaccelerated underwriting? ness. This collaboration informs our product stratMoran: Out of a pool of applicants, maybe 70% of them egy. We’re not in business get very attractive TrueRisk Life scores, and these can unless we’re helping you be fast-tracked. There is definitely a consumer benefit grow yours. when you triage like this. For those other 30% who have marginal TRL scores, they would be subject to more To see the evidence of insurance risk scores’ underwriting. stability and effectiveness, get the free white We were told by one regulator that the reason they paper, “Insurance Risk Scores for Life like TrueRisk Life is because it was consistently applied.

Insurance in the COVID-19 Era and Beyond” There was no judgment. There’s nothing wrong with the at www.InsuranceRiskScores.com. traditional underwriting model other than it’s time-consuming and expensive. Good underwriters are worth their weight in gold. Traditional underwriting is truly an art form. You should save only your tough cases for a traditional underwriter to review.

surance

Insurance risk scores increase objectivity

A new frontier for life insurance

Credit-based insurance risk scores (“insurance risk scores” going forward) have been successfully used to more accurately assess risk and price coverage for personal automobile and property insurance policies for more than two decades. The life insurance industry, in contrast, has only recently begun to deploy them for life insurance underwriting.

Insurance risk scores provide significant advantages in an increasingly digital-forward industry, and most life insurance providers also realize these scores enable more accurate premium pricing. However, there may be concerns as to the relevance of relying on credit information to underwrite customers, especially as the COVID-19 pandemic ravages the United States economy.

© 2021 TransUnion. All Rights Reserved

|

Insurance risk scores increase objectivity

The good news is that insurance risk scores increase objectivity in insurance decision-making. TransUnion data shows that basing underwriting decisions on these insurance risk scores helps properly identify high- and low-risk customers and does not use or contain any information regarding income, race or ethnicity.1 The data also shows that scores have been very stable over the course of the pandemic, indicating that they’re a valuable metric over the long term, even during economic downturns.1 All in all, consumers gain greater access, more financial protection and an improved customer experience when life insurance companies use insurance risk scores as part of their underwriting process — all things every provider should strive to deliver, especially in the COVID-19 era.

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September 2021 » InsuranceNewsNet Magazine

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The Life Insurance Issue • Special Sponsored Section

INDEXED UNIVERSAL LIFE (IUL) POLICY Four Ways to Help Reduce Retirement Risks

Minimizing the Risks to Your Clients’ Retirements

By Ron Lee JD CAP CLU ChFC, Vice President, Advanced Markets and Brokerage Field Relations Mutual of Omaha I think we can agree that there is a lot of uncertainty in our world right now. This uncertainty might do one of two things to your clients — it may make them proceed with their retirement plans without due regard to the risks they face, or it may paralyze them with fear. That’s why it’s more important than ever in today’s environment for you to help your clients make informed choices that move them toward a safer and more successful financial retirement.

In this article, we will discuss four retirement risks that your clients may face and how an indexed universal life (IUL) policy can help manage those risks.

Market Performance Risk – Let’s start with what’s on everyone’s mind right now and that’s the concern that the market will not perform well going forward. Of course, we know that it will go up this year. Unless it goes down. Or stays about the same.

If your clients are planning for retirement and make an IUL a part of their strategy, they can eliminate the risk of market loss with the money they have in their IUL policy.

Keeping a portion of the retirement portfolio where there is downside protection through a floor on the crediting rate can provide comfort to your clients and stability to their retirement plans.

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603838

For producer use only. Not for use with the general public.

Inflation Risk – Your clients could avoid all market risk with certain savings tools, but that doesn’t address inflation risk. Interest rates that hover not far above zero don’t provide nearly enough protection for your client’s purchasing power.

Groceries, utilities, health care, travel, etc. will surely cost more twenty years from now when they are in their retirement years. An IUL product provides the opportunity for greater gains without the risk of market loss which can help cover those cost-of-living increases over the years.

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The Life Insurance Issue • Special Sponsored Section

Sequence of Returns Risk – We all hope that while the market has ups and downs, it will climb higher as the economy begins to turn around. Imagine how your clients who retired right before a market shut down felt about the security of their retirement. The market dropped so precipitously, and fear set in, as many retirees realized they needed the money in their retirement account for basic expenses.

They would have to start spending down their retirement assets before their accounts had time to recover. Those with a properly-funded indexed universal life policy were not forced to take distributions from their retirement account because they could use the cash value in their IUL policy as an alternate source of retirement income.

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Health Care Risk – Perhaps even more importantly, what about the risk of needing longterm care? Spending down those other retirement assets prematurely to pay for long-term care services not only depletes those assets, it may also cause greater taxes, thus accelerating the spenddown even further. Some IUL policies include chronic illness and/or long-term care riders that can provide early access to the death benefit which can be used to pay for chronic illness and long-term care services so that the other assets can continue to grow. This is something their IRA investments won’t do.

Our Solutions* Whether your clients are just starting out or are looking to build a legacy, we have financial solutions you and your clients can count on.

Visit mutualofomaha.com/sales-professionals for details.

Medicare Solutions Medicare Supplement, Prescription Drug Plans, Dental Insurance with optional Vision Benefit rider

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These are just four of the risks that IUL can help manage for your clients. Help your clients manage these risks and know that they can have a better planned and more secure retirement.

Life Solutions Indexed Universal Life with optional Long-Term Care rider, Term Life Answers, Term Life Express, Living Promise (Final Expense), Children’s Whole Life

Health Solutions Long-Term Care, Critical Illness, Cancer, Heart Attack/Stroke, Disability Income *Coverage my not be available in all states.

Mutual of Omaha has a detailed Retirement Risks brochure that will help you understand the risks your clients might be facing or could face in an uncertain economy, and how an accumulation-focused IUL product like Income Advantage IUL could help them plan for these risks.

If you want to learn more about other risks or to get your own a copy of the Retirement Risks brochure, contact Mutual of Omaha’s Advanced Markets Team at advanced.markets@mutualofomaha.com.

September 2021 » InsuranceNewsNet Magazine

37

The Life Insurance Issue • Special Sponsored Section

YOUR AGENCY: REVIVED!

How Crump Life Insurance Services is using its general agency strength to give producers at all levels the support they need

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s most could attest, life as an independent producer the past 18 months has been met with significant and seemingly endless challenges. More than simply figuring out video conferencing, the industry as a whole has required one’s constant attention as new sales strategies, regulations, products and processes are continuously released, making it almost impossible to know whether you’re offering the best solution for your clients.

Add the isolation many independent producers have been feeling and it’s no wonder numerous financial professionals have struggled.

But what if that didn’t have to be the case? What if you could regain your sense of camaraderie and personal connections?

What if, every single day, you had the most up-to-date information, illustrations and product selection for your clients?

How much more efficient would you be if you had your own team — a concierge group of industry pros vested in your success and assigned to fulfill any back-office role you may need, from licensing and contracting support and case management services to current illustrations, sales ideas and access to accelerated underwriting programs?

If it sounds too expensive or too good to be true, then you’re in for a big surprise — and one that could take your production and your overall satisfaction to new heights.

And that’s only the tip of the iceberg of what Crump has to offer, said Elizabeth Kaplan, general manager and senior vice president of the Independent Channel.

Elizabeth Kaplan “Financial professionals are isolated — from their offices, from clients and from each other. It’s even more so with COVID-19. And that isolation makes it very difficult to do all of the research involved to come up with the best solution, the best underwriting based on a client’s health history,” Kaplan explained.

As a 30-plus-year industry veteran and producer herself, Elizabeth has experienced firsthand many of the challenges producers face. And she’s made it her mission to support financial professionals every way possible.

“At Crump, our objective is for the producers to be making connections with clients while we do everything else. We’ll free up their time and give them the welcoming concierge

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InsuranceNewsNet Magazine » September 2021

service available at boutiques, but with broader product selection, numerous product lines and depth of resources only available to the one of the largest GAs,” she continued.

Modular in design, Crump’s support structure works with producers of all levels, across multiple product lines, to supply whatever support, service or training one needs through assigned teams that are compensated based on production.

In other words, it’s in Crump’s best interest to make sure you service your clients and provide the most appropriate solutions for their situations. It’s a team that starts with your personal relationship manager, who works with you to help fill any gap in efficiency you have, leaving no stone unturned.

“Depending on what an agent needs, we’ll get it done, literally start to finish,” Kaplan said. “We can provide the latest sales strategies and marketing support. When a financial professional has a case, we offer competitive intelligence, [and] we’ll look at the clients’ needs and interests, analyze the latest carrier options from specialists who track products and regulations daily, run the illustrations, build presentations, you name it,” she continued.

Of course, not every producer needs or wants that level of support; every financial professional and situation is different. And for Crump, that’s just fine. Some producers have become so efficient that they only want access to the powerful underwriting and competitive product prices that Crump provides.

“We meet the financial professionals where they are at.

Some come to us with a large staff and don’t need a lot of work from a team. Others have no staff, and we fill in as their entire back office. Our goal is to help fill in the gaps in order to assist producers in solving their problems,” Kaplan stated.

It’s a highly modular structure, designed to make your business thrive and to return the feeling of camaraderie and personal connection that so many financial professionals have been missing.

For the full details regarding how Crump can breathe new life into your business, simply visit AgencyEnhancer.com for your free information packet.

The Life Insurance Issue • Special Sponsored Section

Rethink Retirement Planning to Focus on Sustainable Living Standards

Economics-based financial planning can smooth out the rough patches to achieve spending goals in retirement.

E

conomics-based financial planning helps clients meet a lifestyle spending goal for their lifetime, can provide a legacy, and maintains liquidity to cover unexpected expenses and contingencies in retirement. While it may sound like conventional financial planning, several key differences with economics-based financial planning benefit both clients and advisors during up and down markets.

Mary Lyons, the Wealth Woman, founder of Benchmark Income Group, a General Agency appointed with the insurance companies of OneAmerica®, discusses economicsbased financial planning and how it moves beyond an investmentonly mindset and focuses on postMary Lyons retirement spending targets.

What is economics-based financial planning?

An economics-based financial plan is based on a strategy that strives to work no matter what’s happening in the economic environment. It focuses on a household’s living standard as opposed to solely focusing on financial assets.

It’s a dynamic system that allows you to potentially have more income — whether you’re aggressively pursuing investments that are producing cash flow or stock market investments and insurance.

What is the most significant difference between economicsbased financial planning and conventional financial planning?

Economics-based financial planning allows for much more flexibility and focuses on optimizing income strategies. It’s much more holistic. The goal is to achieve consistent living standards — a reliable ability to spend — in good times and bad. You create a system in which the client’s dollars achieve multiple results instead of just parking them in an investment portfolio.

If you take the traditional approach, you may be advised that a safe withdrawal rate at retirement is between 3% and 4%. But with an economics-based plan the withdrawal rates can range from 5%-13%, depending on when you retire.

Because you divert some of the dollars that were going into investments into insurance, you’re withdrawing at a higher percentage of invested assets, but your asset base is smaller.

It typically equates to a 30-70% higher income each year.

How does life insurance factor into this approach?

Frequently, the vehicles that provide the most growth during the accumulation period are the most difficult from a distribution standpoint because of the volatility. The insurance component offers the stability that you cannot get anywhere else. It allows you to be more aggressive with the way you spend your other investments. In the years when your investments are nonperforming or you take a loss, the cash value can back you up, providing an alternate source for capital.

Can economics-based financial planning be used with varied risk tolerances?

You don’t have to take more risks if you are more efficient; however, if you like taking risks, the efficiency of an economics-based approach will still help you. So, it can be adapted across all risk tolerances.

Why does economics-based financial planning appeal to advisors?

The approach can offer advisors more credibility and clients more efficiency. The advisor can be measured beyond just the rate of return — relieving some pressure. You still have to grow the assets, but you can show the potential for more income even when returns may be down. When using economics-based approaches, we’re trying to preserve principal over time. Because it’s not a constant depletion of investments due to the complement of the insurance, the advisor is managing the assets longer.

How would an advisor who is new to this approach get started?

Advisors have a few options. A mentor who takes an economics-based approach can demonstrate the big-picture strategy. Software platforms can teach and provide economics-based financial advice. In our office, we teach advisors this approach via a rigorous six-month program.

Help Your Clients Move Through Life With Flexibility To learn more about how economics-based financial planning can help your clients meet the financial goals of retirement while also managing the risks, visit EconBasedPlan.com to download Help Your Clients Flex with Economics-Based Financial Planning.

Registered Representative and Investment Advisor Representative of and securities offered through OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC. Benchmark Income Group and The Wealth Woman are not affiliates of OneAmerica Securities or the companies of OneAmerica and are not broker dealers or Registered Investment Advisors.

Investing involves risk which includes potential loss of principal.

Life insurance should be purchased by individuals that have a need to provide a death benefit to protect others with insurable interests in their lives against financial loss. Life insurance is not a retirement plan, investment, or savings account

September 2021 » InsuranceNewsNet Magazine

39

LIFEWIRES

1Q UL Sales Hit ‘All-Time Low’ First-quarter non-variable universal life insurance sales were down

double digits, according to Wink’s Sales & Market Report.

Non-variable UL sales were $649.8 million, down 12.1% when compared with the previous quarter and down 15.6% as compared with the same period last year. Non-variable UL sales include both indexed UL and fixed UL products.

Noteworthy highlights for total non-variable UL sales in the first quarter included National Life Group gaining the No. 1 overall sales ranking with a market share of 11.9%. Allianz Life’s Allianz Life Pro+ Advantage IUL was the No. 1 selling product for non-variable UL sales, for all channels combined.

“Seeing universal life hit rock bottom is a personal low for me,” Sheryl J. Moore, chair and CEO of Wink Inc., said. She recalled developing a guaranteed UL product 17 years ago. “Back then, I never would have foreseen that sales would get this bad.” She added that “when product development is active, sales suffer.”

VACCINES: IF YOU SAY NO, WILL YOUR INSURER SAY NO?

Wit h u nvaccinated Americans at greater risk of dy i ng f rom COVID-19, will that impact someone’s ability to buy life insurance? Some of the largest life insurance companies say no.

Several insurers told Fortune that they are currently not taking COVID-19 vaccination status into consideration during the underwriting process, although some are asking consumers about vaccinations in select cases.

Lincoln Financial, New York Life and Prudential said they are not asking those who want to obtain coverage about their vaccination status. Northwestern Mutual said they are seeking vaccination information from a small number of people who have high-risk conditions.

But although vaccination status might not matter to some insurers, whether someone has had COVID-19 can factor into whether they obtain coverage. Consumers should expect to disclose whether they currently have COVID-19, or have recovered from COVID-19, as part of the general medical questionnaire or declaration of insurability, a Lincoln DID YOU

KNOW

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Financial spokesman said. In addition, whether or not someone has a vaccine does not impact life insurance costs for coverage already in place, according to Jan Graeber, senior health actuary at the American Council of Life Insurers.

PRUDENTIAL SELLS RETIREMENT BUSINESS TO EMPOWER

Empower will acquire Prudential’s defined contribution, defined benefit, non-qualified and rollover IRA business in addition to its stable value and separate account investment products and platforms in a $3.55 billion deal.

Empower Retirement, a GreatWest Financial entity, plans to combine the two companies’ retirement plans on a single technology platform when the deal closes in the first quarter of 2022.

Prudential Financial is expected to participate in the institutional and individual retirement market, serving retirees, annuitants and employers

QUOTABLE This was obviously going to be a tough quarter for life insurance sales.

— Sheryl J. Moore, chair & CEO of Wink Inc.

through its institutional investment products business, as well as through income and investments solutions provided by its individual annuities business and PGIM, a top 10 global asset management firm. Following the close of the transaction, Prudential’s retirement business will consist of pension risk transfer, international reinsurance, structured settlements and institutional stable value wrap product lines.

LINCOLN FINANCIAL PULLS LIFE PRODUCTS FROM NEW YORK

Lincoln Financial is the latest company pulling insurance products out of New York. The company said it is exiting because its electronic signature process does not comply with the state’s requirements.

Lincoln is just the latest of many companies that have pulled products from New York because of pressure from regulations as well as market conditions such as persistent low interest rates.

For example, John Hancock pulled several life products, leaving only Accumulation IUL and Protection Term as the products it sells in New York.

56% of Black Americans own life insurance, up 3 percentage points from last year and 4 percentage points more than the general population.

Source:The 2021Wall Barometer Survey Source: Street Journal

InsuranceNewsNet Magazine » September 2021

Kansas City Life Insurance Company’s winning IUL sales strategy can help you extol the virtues of including IUL in your client’s retirement planning.

Has AG 49-A put a dent in your IUL sales when attempting to create attractive tax-free retirement income scenarios for your clients?

Kansas City Life offers two competitive IUL products that include: • Simple design • Five different Indexed Account options to provide maximum upside potential while providing downside protection • Numerous policy riders designed to meet individual needs, situation, and budget • Competitive target premium

Kansas City Life’s winning sales strategy includes: • State-of-the-art illustration system designed to calculate maximum income with a click of the mouse • Historical Indexed Account performance • Excellent IUL marketing collateral that promotes client understanding which helps improve your closing ratio

For information about a vested independent contract with Kansas City Life Insurance Company, call Tom Morgan, Vice President, Agencies, 855-277-2090, or visit www.CompassEliteIUL.com September 2021 » InsuranceNewsNet Magazine

41

LIFE

The Zero Estate Tax Plan: The Cure For Planning Fatigue Life insurance is the bedrock of a plan to provide funds to charity while giving cash to clients’ beneficiaries.

By James Cassidy and Ron Sussman

A

famous quote says: “The definition of insanity is doing the same thing over and over again and expecting different results.” If this is true, and we do believe it is, then the ever-changing estate planning landscape for high net worth clients is insane.

Estate planning is, by definition, a long bet with an uncertain outcome, made riskier by employing tax strategies that work only if today’s laws remain unchanged. Which, in itself, is a rarity.

Planning for the disposition of your client’s highly appreciated assets is really more of an exercise in futility, since there is no way to know when or whether the tax laws will change or be abolished. This is convenient if you charge for advice, 42

since there is very rarely a time when the tax laws are not in flux. But it can be very frustrating to clients who are trying to achieve a specific outcome.

Take, for example, the rules under Internal Revenue Code Section 1031. If your tax planning involves serial 1031 tax-free exchanges, you may be in the crosshairs of the Biden administration’s efforts to curb perceived “abuses” of this perfectly legal tax benefit. And although it’s usually the abusers of any strategy that draw the most attention, everyone else who attempted to follow the rules will likely suffer.

Just look at this abbreviated list of solutions offered by creative estate planning practitioners: CRUT, CLAT, GRAT, GRUT, CLT, CRT, FLP, QPRT, QTIP, QDOT, SCINS, SLAT, etc. I’m sure you’ll find one or more that your clients are using.

These are just a few of the creative acronyms used to describe sometimes wildly complicated tax strategies that may or may not ultimately provide shelter from what many advisors perceive as avoidable taxation. Also, most high net worth

InsuranceNewsNet Magazine » September 2021

clients will cycle through many iterations of these over their lifetime, always trying to stay one step ahead of the IRS. It is not unusual to find clients who are trying to use or terminate trusts that were drafted decades ago, and cannot find the trust deed or it’s drafter, leaving them in limbo with assets that may be owned by an obsolete trust. It is equally common to find that the initial trustee is not a person with whom the grantor currently has a relationship — or even worse, has fallen out with. How do you solve some of these issues with trusts that are, in many cases, deemed “irrevocable”?

What we are noticing is that this endless cycle of chasing the tax law has become exhausting for clients who are lately becoming all too aware of the fees associated with maintaining them.

Clients are exhibiting planning fatigue, the result of which is frozen indecision, the worst of all decisions.

What if you could solve most of these issues with one extremely simple strategy that relies on only two of the most sacrosanct of all tax laws: The deductibility of contributions to a qualified charity and the tax-free receipt of life insurance death proceeds?

This strategy is one of the most underutilized, simple and efficient of all, and has been effective for as long as our tax code has been in existence. It can serve as a place holder for future planning, or function as the entire estate plan. It requires only a minimal amount of “planning” and can, when implemented correctly, eliminate all estate taxes and leave heirs with a pre-determined tax-free gift of cash.

The Zero Estate Tax Plan is something that dovetails nicely with an idea that was pioneered decades ago by a firm specializing in charitable planning. That idea, referred to as social engineering, assumes that families with significant wealth should be able to direct their tax dollars to causes they support and want to foster, rather than allow the government to make that decision for them. Essentially, by leaving your estate to charity you deny the government the estate tax (and other taxes that could be due) by leaving 100% of the estate to qualified 501(c)(3) charities.

Of course, the idea of leaving your entire estate to charity is a tough one to sell. Most families want their heirs to

THE ZERO ESTATE TAX PLAN: THE CURE FOR PLANNING FATIGUE LIFE

The Zero Estate Tax Plan is a fantastic place holder.

Properly Structured Life Insurance Is The Glue That Holds The Plan Together We understand everyone’s reluctance toward life insurance. Some clients only see life insurance as an unwanted expense. Others see it as a poor investment.

But what life insurance lacks in public perception, it more than makes up for in practical tax planning applications. A properly structured variable life insurance policy, private placement variable life insurance policy or whole life can be a fantastic investment if used and managed properly. Consider the benefits of an asset that can:

» Be liquid immediately after the death of the insured(s): In effect a death put. » Delivers tax-free dollars to the named recipient: No basis or step-up issues. » Allows the owner to specify the investment allocation. » Allows the owner to accumulate value tax-deferred during their lifetime. » Allows the owner to borrow against their asset at a cost of 1% or less. » Allows the owner to select a structure that meets their risk tolerance.

No need to be lured into risky life insurance products. Products like indexed life create more risk than necessary without commensurate reward. But a variable life insurance product (commercial or private placement), allows the client to make his or her own investment allocations, or even select specific hedge funds, making the policy(ies) just another well-performing and manageable asset in their portfolio.

The only real cost to these products is the mortality and expense component, which can be minimized by proper funding. The correct way to help clients assess these costs is to compare them to the tax that would have been paid during the accumulation and distribution phases of the plan. Here again, life insurance’s inherent costs are trumped by the tax benefits and investment return possibilities.

inherit the majority of their assets with minimal tax exposure, but they realize they might need to jump through some very difficult hoops to make that happen with minimal tax exposure.

The Zero Estate Tax Plan solves this problem in the most advantageous way by using life insurance as the asset that heirs receive. At the death of the second spouse, the entire estate is contributed to charity, eliminating all taxes. The heirs receive the death proceeds of life insurance tax free.

In the process of discussing estate planning with high net worth clients, we always ask, “How much would you like each child to receive when both of you are gone?” Lately, the response we hear the most is, “enough so that he or she will never want for anything, but not so much that they become unproductive citizens.”

This implies that there is an amount that would satisfy this wish, and in fact, most

clients have a fairly easy time identifying that number. Maybe it’s a set amount to each beneficiary, maybe the amounts are different based on the beneficiary’s relationship to the family business, or maybe it’s just the current value of the estate with all of the future growth going to charity.

The biggest benefit of this plan is its simplicity.

If the owner of the plan were to die one day after completing it, the plan would work beautifully. If they were to live longer than anticipated, none of their assets are tied up in complicated tax structures, so they can spend all they want. There is no need to specify the amounts going to charity; therefore they have full control of their assets to the end. In addition, the beneficiary’s bequests can be structured such that the amounts they receive will grow over time based on the insurance policy’s returns.

All estate planning changes as the tax laws evolve and as grantors and their ultimate beneficiaries age. Maybe the grantors want to be more charitable when they are alive. Maybe they want the beneficiaries to have access to assets before they die. All of this is possible. There is virtually no downside to using this plan as a place holder for future planning.

Time Really Is Money

One of the real difficulties with structuring a sophisticated estate plan is the time it takes to make it happen. Here again, we acknowledge that accountants and attorneys make a living by the hour, and that is not a bad thing. But, generally speaking, the fees associated with high-level tax planning tend to get onerous. And clients tend to experience planning fatigue rather early in the process.

Anyone who has tried to organize their estate planning, and has had to do the hard work of deciding who gets what and how, knows that the process is fraught with landmines. This is particularly true of people with very large and complicated estates. These projects always turn out to take huge amounts of time, often to no avail, as clients lose interest, change their minds or get lost in tax minutiae.

This where a responsible advisor comes in. Instead of throwing out the Zero Estate Tax Plan idea at the end of a fully fleshed out estate planning project as a sort of Hail Mary pass, make it the star attraction. Maybe it’s a great place holder for future planning, or maybe it’s the whole plan. Either way, the client will require wills and trusts (such as an irrevocable life insurance trust) and accounting, which provide the framework for whatever may come later.

James Cassidy is a certified public accountant with Schulman, Lobel. He has more than 30 years’ experience providing tax consulting to high net worth individuals. He may be contacted at james.cassidy@innfeedback.com.

Ron Sussman is CEO of CPI Companies. He may be contacted at ron.sussman@innfeedback.com.

September 2021 » InsuranceNewsNet Magazine

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ANNUITYWIRES

2Q Annuity Sales Climb Higher And Higher

Variable annuity sales

55%

Fixed indexed annuity sales

28%

Coming out of the pandemic, annuity sales were expected Deferred to be strong in the second quarter. Turns out they were so annuity 52% strong, Todd Giesing had to triple-check the numbers. sales Total annuity sales were $67.9 billion in the second quarter, up 39% from second-quarter 2020. First-half annuity sales were $129 billion, 23% higher than the prior year, according to preliminary results from the Secure Retirement Institute U.S. Individual Annuity Sales Survey.

“We’d have to go all the way back to the fourth quarter of 2008 to see better overall individual annuity sales than we saw here in the second quarter,” said Giesing, assistant vice president, SRI Annuity Research. “We looked at it really closely. All categories are up double digits, except for structured settlements.”

A significant factor was the lifting of restrictions for social distancing as vaccinations became widely available. Other factors Giesing cited were general improvements in economic conditions and a slight increase in bond interest rates with the expectation of slow, steady growth in the future.

But the biggest factor was the unleashing of pent-up demand in the first half of this year, he said.

ANNUITY GROUP SPONSORING ROLLING STONES’ TOUR

The Rolling Stones have been rocking out for more than 50 years and long past the time when most of their earliest fans have retired. So it makes sense that an annuity group would want to advertise with the band.

The annuity-focused Alliance for Lifetime Income is the sole sponsor of the band’s 2021 “No Filter” U.S. stadium tour.

The band’s new tour has been rescheduled from 2020. It will start on Sept. 26 in St. Louis and will travel to Charlotte, Pittsburgh, Nashville, New Orleans, Los Angeles, Minneapolis, Tampa, Dallas, Las Vegas, Atlanta and Detroit before concluding Nov. 20 in Austin, Texas.

“With the country opening up again, we’re excited to be a part of this iconic tour and one-of-a-kind show as we educate millions of Stones fans, now more than ever, about the need for protected income in retirement,” said Jean Statler, CEO of the ALI. DID YOU

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‘ANNUITY KING’ PARTNER TAKES PLEA DEAL IN FLORIDA FRAUD CASE

Kenneth Murry Rossman, 63, accepted a July plea deal in a federal fraud case that includes co-defendant and prolific annuity seller Phillip Roy Wasserman.

The self-described “Annuity King” in marketing materials, Wasserman, 64, maintains his innocence and is expected to go to trial in the fall in a Florida court.

If convicted, he faces up to 20 years in prison on mail fraud, wire fraud and tax Phillip Roy Wasserman evasion charges.

The government seeks a money judgment of at least $6.3 million, court documents say, the proceeds of the charged criminal conduct.

An initial indictment unsealed in June 2020 charged Wasserman and Rossman with conspiracy to commit wire fraud and mail fraud, as well as substantive counts of wire fraud and mail fraud. A superseding indictment in November 2020 tacked on charges of filing false income tax returns to the wire fraud and mail fraud charges.

According to court documents, Rossman pleaded guilty to one count

QUOTABLE AIG is “likely to buy other insurance companies” with the “substantial capital” raised from its deal with Blackstone.

— Charles Roame, managing partner of Tiburon Strategic Advisors

of conspiracy to commit mail fraud and wire fraud, and one count of “aiding and assisting the preparation and filing of fraud and false tax returns.”

The two counts carry a maximum of eight years behind bars.

Wasserman maintained his innocence and said he plans to call hundreds of witnesses at trial.

NAIC COMMITTEE PASSES ANNUITY SALES FAQS

In order to update annuity sales rules, you have to know what they are. That’s the idea behind a new set of Frequently Asked Questions being finalized by the National Association of Insurance Commissioners.

The Life Insurance and Annuities Committee, a group within the NAIC, adopted the FAQs in July. A working group spent much of the past year creating the informational questions and answers.

In February 2020, the NAIC adopted an update to the Suitability in Annuity Transactions rule that articulates a best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation. In the months that followed the outbreak of COVID-19, states were slow to adopt the update.

More than two dozen states have adopted the new rules so far, said Iowa Insurance Comm issioner Doug Ommen.

31% of baby boomers say that they have accelerated their retirement plans because “life is too short.”

InsuranceNewsNet Magazine » September 2021

Source: MetLife

ANNUITY

Retirement Strategies Pre-Retirees Can Plan Now Options for clients to consider now in order to make the most of their savings later.

By Mark MacGillivray

A

2020 economic study uncovered information that suggests many older workers chose early retirement because of the pandemic. Yet CNBC reported that as of the fourth quarter of 2020, Americans between the ages of 50 and 59 have an average 401(k) balance of only $203,600. However, people in this age bracket should aim to have at least six times their salary saved by that point.

This gap is why many people now need to consider how to stretch their retirement savings. Pre-retirees in particular — those age 50 and older — are likely considering retirement options and strategies that will provide them with the safety and security that currently feels more precarious because of the pandemic.

Pre-retirees should be in retirement planning mode. Although they cannot yet touch their 401(k) without penalty, now is the time to learn about the options that will bolster and protect their savings so that their money will continue to grow in retirement. Essentially, pre-retirees can plan for retirement now in order to make the most of it later.

they have it later (or when they need it).

Once someone is of retirement age and separated from the employment where they had their 401(k), they can roll over a portion of their 401(k) into an annuity to accumulate safe interest. Many annuities are actually purchased with pretax funds (also known as qualified funds) such as 401(k)s. For those who don’t have 401(k)s, Roth or traditional individual retirement accounts are also options that can be set up and contributed to by an individual and be used to purchase an annuity.

Here is an example of what that growth can look like: 31% Participation Rate on the S&P 500 Index $150,000 Deposit, Tax-Free Rollover From 401(k) – Female/Male Age 65 Year S&P 500 Return Annuity 2014 11.39% 2015 -0.73% 2016 9.54% 2017 19.42% 2018 -6.24% 2019 28.88% 2020 16.26%

Return Annuity Value 3.53% $155,295 0.00% $155,295 2.96% $159,892 6.02% $169,517 0.00% $169,517 8.95% $184,689 5.04% $193,997

$193,995 tax-free rollover into a single premium immediate annuity

Turning A 401(k) Into A Payment Stream

Many 401(k) accounts have pre-determined time frames for retirement, where asset allocation gets more conservative the closer one gets to leaving the workforce.

That sum of money has been built up over decades, and there are ways to protect it (and grow it) in case of market volatility.

Older workers don’t know what to do with their 401(k) beyond letting it sit and build interest, so it’s important to help them understand that there are options for protecting their savings so they can be sure 46

Even when in retirement, it’s a best practice to protect some of your savings and continue to let it grow. This is why a partial rollover from a 401(k) or other pretax account into a fixed annuity can be a good option. And for those who have potentially saved less, such as the majority of the American population, it’s more important to protect what is there now to help it grow later. (See chart.)

As you can see, the initial deposit of $150,000 grew by $43,000 into more than $193,000 over a 7-year period. Then it was

InsuranceNewsNet Magazine » September 2021

Female Age 72 Lifetime payout: $1,121.13 monthly payments Lifetime payout with a 15-year certain period $1,006.77 monthly payments Male Age 72 Lifetime payout: $1,216.79 monthly payments Lifetime payout with a 15-year certain period $1,048.39 monthly payments For example only. Actual payment amounts will vary. Income tax is assessed each year on the total amount paid out.

RETIREMENT STRATEGIES PRE-RETIREES CAN PLAN NOW ANNUITY annuitized into a monthly retirement payment stream of $1,121.13. Whether 401(k) funds are limited or not, putting a portion into a fixed annuity helps stretch those savings and make them last longer for a few reasons. Some annuity interest rates do not fluctuate during their fixed period. As interest is credited, those earnings are locked in; funds will never decrease if the market goes down.

By tying an annuity’s interest crediting to the index, the funds can participate in general market gains. At the same time, they are protected from downturns.

Short-Term Annuities

There are both short-term and long-term annuities to choose from, and for pre-retirees it’s good to consider the benefits associated with each.

Deposited funds in a short-term annuity, such as a fixed or index annuity, are protected and guaranteed, and the holder can choose to receive payments immediately or defer payments until a later date. While the annuity holder can

decide when to take payments from the amount that has accumulated, interest continues to grow tax deferred until money is withdrawn.

Short-term fixed annuities can make a great bridge for early retirement, providing income before the client touches their 401(k).

Long-Term Annuities

Long-term annuities, such as a fixed deferred annuity, can act as a future payment stream, similar to a pension. As referenced in the chart, as an annuity’s interest builds, so does its future payout. No matter what happens in the market during the chosen annuity duration, the annuity’s principal is protected, as is the guaranteed minimum interest rate.

Fixed annuities can act as a long-term savings plan that provides future income to supplement retirement income. Longerterm annuities typically earn a higher rate because those funds are used to make longer-term investments (which generally pay higher returns). They are a long-term income

replacement plan across a fixed amount of time to reduce the odds that someone will run out of money in retirement.

Making A Plan

Those who are approaching retirement age have much to consider, and it’s best to figure out a plan beforehand. Fortunately, it’s never too early to do so. Whether a client is forced to unexpectedly retire early or late, making their funds last is their fundamental goal.

Pre-retirees can educate themselves now so that by the time they retire they can do so with more confidence. After all, the closer one gets to retirement, the better it is to understand which options, such as annuities, help to make the most of it.

Mark MacGillivray is director of financial institutions for annuities at The Standard. He may be contacted at mark. macgillivray@ in n feedback.com.

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www.american-equity.com ● Call us at 888-221-1234 September 2021 » InsuranceNewsNet Magazine 47

HEALTH/BENEFITSWIRES » Average medical debt in lowest-income ZIP code — $677

Health Care: America’s » Average medical debt in highest-income ZIP code — $126 Largest Source Of Debt Forget credit cards or student loans. Health care is America’s largest source of debt

Source: Harvard Business School

that is in collections, according to new research from Harvard Business School, Stanford University, the National Bureau of Economic Research and the University of California at Los Angeles. The researchers found collection agencies held $140 billion in unpaid medical bills in 2020, up from $81 billion in 2016.

About 18% of Americans hold medical debt that is in collections, researchers said, making unpaid medical bills the largest source of debt that Americans owed collections agencies between 2009 and 2020.

Medical debt is different from other forms of debt, the researchers said, because those who owe that debt often didn’t have a choice in racking up those bills. Debt also appears to be more concentrated in ZIP codes that correlate to lower incomes, the researchers found.

Another way medical debts are different? They are much less likely to be repaid, researchers said.

AN END TO THE BIRTHDAY RULE?

New parents frequently find themselves snagged by something called the “birthday rule” — an obscure health insurance policy rule that often ends up costing them thousands of dollars soon after welcoming a baby into the world.

The birthday rule dictates how insurance companies pick the primary insurer for a child when both parents have coverage: The parent whose birthday comes first in the calendar year covers the new baby with their plan first. But the rule can strangle new parents with medical expenses if the parent whose birthday comes second in the calendar year has a policy with more generous benefits.

U.S. Rep. Sharice Davids, D-Kan., introduced the Empowering Parents’ Healthcare Choices Act, a bill that would do away with the birthday rule and a “coordination of benefits policy” that trips up first-time parents when it’s time to sign up a new baby for insurance. This

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model regulation was set by the National Association of Insurance Commissioners and adopted by most states.

GIG WORKERS PAYING MUCH LESS FOR HEALTH INSURANCE

Gig workers have traditionally lacked access to affordable, quality health insurance. But that appears to have changed, according to Stride, a benefits platform for independent workers.

The American Rescue Plan enabled more gig workers to enroll in coverage through Healthcare.gov, and those workers are paying less for health insurance. Stride’s data showed gig worker enrollment in health insurance increased sixfold in April 2021 compared with the same time last year.

QUOTABLE Clearly, there’s strong demand for quality, affordable health insurance among gig economy workers.

— Noah Lang, co-founder and CEO of Stride

More than one-third (37%) of independent workers are paying less than $1 per month for coverage. The vast majority (93%) of gig workers received subsidies to help them afford health insurance.

DOLLAR GENERAL MAKES PUSH INTO HEALTH CARE

Dollar General is the latest retailer seeking to become a health care destination. The company hired a chief medical officer as it plans to make a push into health care. In addition, the store’s customers will see more health products — such as cold medications and dental care items — on the shelves.

CEO Todd Vasos said Dollar General’s new push is inspired by customers who said they want more convenient and affordable health care products and services.

The discount retailer has more than 17,400 stores throughout the country, most of them in rural areas that don’t have many pharmacies nearby.

Missouri Supreme Court reversed a lower-court decision that found the state's Medicaid expansion unconstitutional. Source: St. Louis Post-Dispatch

InsuranceNewsNet Magazine » September 2021

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September 2021 » InsuranceNewsNet Magazine

49

HEALTH/BENEFITS

The 3-Part Plan To Attract Gen Z Employees The newest generation to enter the workforce is especially focused on their finances and well-being.

By Kim Buckey

B

y the year 2030, three in 10 of those in the U.S. workforce will be members of Generation Z (individuals born between 1997 and 2015). That’s the word from the U.S. Bureau of Labor Statistics. Although there’s nothing groundbreaking about segmenting employees by generation, given the sheer size of this latest workforce cohort, it may be worthwhile to focus on Gen Z as human resource departments consider their talent attraction and retention strategy.

Studies have shown Gen Z to be a very practical generation and particularly focused on finances. However, Gen Z’s priority on finances does not directly translate to salary alone. Having seen the millennials before them navigate significant credit card debt and student loans, this incoming generation is looking for financial support in every aspect of their lives. Gen Z employees have a long-game perspective when assessing their benefits packages, which means HR and benefits brokers should too.

Knowing that benefits are a vital piece of the attraction and retention puzzle, HR leaders should make sure they package their benefits offerings with Gen Z expectations in mind. And offering top-tier benefits is only the first part. HR and benefits brokers must also effectively communicate those benefits to Gen Z prospects and employees. They need to understand why and how the benefits are competitive in order to find them compelling.

PART 1: Make financial wellness the crown jewel of your benefits package.

Gen Z wants to be able to custom-tailor their benefits coverage, particularly 50

regarding financial wellness. With many starting off their careers while carrying student debt, they are all too aware that the world is an increasingly expensive place to live. For example, an Ameritrade Financial Disruptions Survey revealed nearly half (47%) of Americans believe that cost of living is the biggest threat to their financial security, and another 44% also fear the rising cost of health care.

Nearly one-third of Gen Zers prioritize health insurance as their most desired benefit, and one-quarter prioritize 401(k) and retirement benefits, according to the Zippia 2020 Generation Z Job Seekers Report. As such, employers featuring financial wellness in their benefits packages will certainly want to target this group, but this approach should not

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ployees and their (two- and four-legged) dependents.

PART 2: Demonstrate how your benefits packages support financial wellness.

To support employee financial wellness, employers should make clear exactly how their offerings can — both directly and indirectly — support and supplement their workers’ security. Benefits brokers should focus their communications on what employees want to know, what they need to do and what resources are available to help.

Keep in mind that for many Gen Z employees, this may be their first experience in selecting and using benefit plans. This provides a unique opportunity to provide

Gen Z employees have a longgame perspective when assessing their benefits packages, which means HR and benefits brokers should too. stop at Gen Z. In fact, a Prudential survey showed eight in 10 workers say they want their company to provide benefits central to their economic well-being.

Employees of all ages consider benefits such as health, disability and life insurance; paid family medical leave; and emergency savings programs important to their financial resilience, Prudential’s 2021 Pulse of the American Worker Survey revealed. That means HR and benefits brokers should stay creative and focus on how other benefits — especially health insurance — relate to employees’ overall financial wellness.

Offering voluntary benefits such as buyup life or disability coverage; critical illness, hospital indemnity and accident insurance; or even pet insurance can provide an important safety net for em-

InsuranceNewsNet Magazine » September 2021

education about choosing and using benefits coverage and to provide them with the decision-making skills they’ll need going forward. Explaining basic terminology and key concepts, as well as the economic impact of benefit decisions, will go a long way toward making workers — whatever their age — feel supported. In fact, almost 45% of respondents to a recent DirectPath study said that personalized education during the onboarding process would most improve their understanding of how health insurance works and what they should consider when choosing and using their benefits.

To start, brokers should spell out exactly how employees’ choice of coverage can make a major difference in their financial wellness — for example, demonstrating how the lowest

THE 3-PART PLAN TO ATTRACT GEN Z EMPLOYEES HEALTH/BENEFITS

Who Is Generation Z?

NO MORE OUT-OF-POCKET MEDICARE COSTS!

• Looking for a career that provides meaning in an environment that promotes equality.

• Desire career growth over higher salaries.

• Digital natives — prefer communicating electronically over face-to-face interactions.

Seniors on Medicare are often unknowingly exposed to a series of massive out of pocket expenses. Expenses that, thanks to North American Insurance Services, could be completely eliminated. And that’s not all.

• Risk averse.

• Entrepreneurial — 55% more likely than millennials to start their own business.

Source: Nebula.com

premium plan is not always the most cost-effective, and how health care flexible spending accounts and health savings accounts can provide funds to offset medical costs while helping to reduce taxes. Employees can especially benefit from one-on-one support during the enrollment process and throughout the year. Benefits educators or advocates can walk employees through enrollment and answer questions in real time throughout the year.

When it comes to using their plans, it’s critical for employees to learn that shopping for health care services is not only possible but important, given the immediate impact on their wallets. Brokers should clearly point out that there is no fixed cost for any health service, show how dramatically costs can differ within the same network and ZIP code, use examples to show why this matters, and promote the online tools and other resources available to facilitate cost comparisons. Offering transparency services and enlisting health care advocates can help. Advocates can handle the leg work and provide cost comparison reports, so individuals can make the most cost-effective choice. With hospitals and health systems in poor compliance with recent transparency regulations, such services may be particularly beneficial in helping employees facing inpatient or outpatient procedures.

PART 3: Make it personal.

Providing information and resources is all well and good. But for these messages to stick and resonate with Gen Z, employers must make the “what’s in it for me” abundantly clear. Liberal use of examples, calculators and other tools will enable them to “do the math,” while benefits brokers and health care advocates can provide individualized, one-on-one support at enrollment and throughout the year.

Finally, implementing and maintaining a dedicated benefits site ensures that employees have all the information they need when they are ready to consume it and available at their convenience.

Every employee cares (or should care) about financial wellness — but because Gen Z has already shown a focus on this issue, HR and benefits brokers should take note. By acknowledging Gen Z’s priorities, packaging benefits offerings based on those needs and investing in their benefits education, brokers can help employers stand out in today’s hot job market. Gen Z wants to be heard — and a personalized compensation package shows an employer’s support from Day One. Kim Buckey is vice president of client services with DirectPath.

She may be contacted at kim.buckey@innfeedback.com.

September 2021 » InsuranceNewsNet Magazine

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The Rich Get Richer – And Older Wealthy Americans did very well

H ereu'ss! to

during the pandemic, as households with $5 million or more in investable assets grabbed 80% or more of the COVID-19 market run-up, a Hearts & Wallets study showed. Meanwhile, households with between $100,000 and $500,000 in investable assets declined in number.

Nearly 80% of wealth ($53.8 trillion) was held by about 10% of U.S. households with $1 million and over (11.2 million), as of August 2020.

While the $29 trillion increase in retail investable assets over the past seven years was spread across households with $500,000 and up, over 80% of the COVID market run-up of $12.7 trillion ($10.3 trillion) went to households with $5 million or more.

U.S. Households And Investable Assets <$5M vs. $5M+ by Age, 2020

Source: Federal Reserve Financial Accounts of the United States, Survey of Consumer Finances, U.S. Census Bureau, Hearts & Wallets Investor Quantitative™ Database, Hearts & Wallets analysis

These assets are heavily concentrated among ages 55 to 74 because most households with $5 million or more are in this age group. These older, wealthier households control $40.2 trillion of the $68.3 trillion, or nearly two thirds (59%) of all U.S. retail investable assets. The 1% of U.S. households who are older (ages 55 to 74) and wealthy ($5 million or more) control 32% of all U.S. retail investable assets.

Hopeful But IllPrepared: Gen Z Looks At The Future

Members of Generation Z say they are financially ill-prepared to face adulthood, despite a growing economy and a booming job market.

A survey by OnePoll on behalf of Experian Boost found that 81% of Gen Z respondents “wish they were taught more life skills before graduating college.” In addition, 70% 52

InsuranceNewsNet Magazine » September 2021

The Value Of Professional Advice Goes Up

Fewer Americans trust themselves for financial advice, according to a Northwestern Mutual survey. The survey showed that Americans said their top source of financial advice in 2021 was a financial advisor (26%) as opposed to the prior year,

when the most trusted source of financial counsel (30%) was themselves.

The study found that the market volatility and economic downturn caused by the COVID-19 pandemic was a major factor influencing individuals to seek out professional financial advice. Nearly four in 10 (38%) Americans currently work with a financial advisor, representing a signifi-

cant jump from pre-pandemic levels (29%).

Fifteen percent of survey respondents reported that they didn’t have a financial advisor pre-pandemic, and they now either currently work with an advisor or plan to start working with one. The trend was most pronounced among younger generations, with 23% of Generation Z and an equal 23% of millennials reporting that they have or plan to work with a financial advisor as a result of the pandemic’s impact on the markets and economy.

said they’re feeling overwhelmed by their financial situation, including their ability to pay rent and monthly bills.

On the bright side, 38% of Gen Z said they understand the concepts behind investing, and the same percentage understands credit scores, while 42% said they understand how to budget. Meanwhile, 64% said they believe they will find financial security within the next six years.

30% of Gen Z moved back in with their parents to save money.

32% put off paying their student loans in order to better manage their other finances.

SOURCE: OnePoll on behalf of Experian Boost

Pandemic Prompts Early Retirement For Some The proverbial gold watch came a lit-

tle early for many Americans, thanks to COVID-19. An estimated 3 million

people nationwide left their jobs earlier than expected since the pan-

demic began, according to the U.S. Bureau of Labor Statistics.

Some left voluntarily, while others were furloughed and haven’t returned to the workforce for myriad reasons.

Some retrained for different careers and others simply realized there’s more to life than work.

Did You Know?

48% of Americans surveyed said paying bills is their top financial priority over the next year.

SOURCE: Northwestern Mutual

The pandemic-related job exodus reversed a trend that has been brewing for some time: that of baby boomers remaining in the workforce past the traditional retirement age of 65.

The Federal Reserve Bank of New York’s recent survey showed the

average expected likelihood of working beyond the age of 67 had declined from 35.3% of respondents in July 2019 to 32.9% in March

2021. It is the lowest number since the survey, done every four months, was started in 2014.

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2021/07/13 May 2020 » InsuranceNewsNet Magazine

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What Same-Sex Partners Need To Know About Estate Planning A sound estate plan will be the legal protection needed in order to guarantee your client’s intentions are followed. • Filomena Gomes

S

ome people might assume that estate planning is only for the wealthy, but the reality is that anyone can, and should, engage in estate planning, regardless of wealth.

Although creating an estate plan for same-sex couples isn’t wholly different from creating one for heterosexual couples, there are some considerations that are unique to same-sex couples.

Proper estate planning can help ensure a client’s wishes are carried out exactly as intended in the event of a death or a serious illness. Having a clearly stated plan in place can provide clear direction and potentially avoid any disputes that otherwise might occur. For same-sex couples, this may be even more crucial.

The 2015 U.S. Supreme Court ruling guaranteed the right of same-sex marriage in every state, which gave same-sex couples new options to legally protect 54

their assets and families. If your client is not married, a sound estate plan will be the legal protection needed in order to guarantee your client’s intentions are followed because rules can vary state by state. Helping your client get started as soon as possible helps make the estate planning process much easier and gives clients the confidence that their plan is comprehensive and legally binding.

Items To Include

Any estate plan should include a will or trust, beneficiary forms, powers of attorney, a living will, and a letter of intent.

Along with that, I advise my clients to include a secure document with a list of accounts, debts, assets and contact numbers for any key people involved in those accounts. The list should contain passwords for locked accounts and any other relevant information.

Including a will in estate plans ensures your client’s wishes will be carried out after their death. This alleviates your client’s family from the responsibility of figuring out how to divide assets and takes the guesswork out of how to pass

InsuranceNewsNet Magazine » September 2021

along belongings and treasured heirlooms. The will or trust might also specify how your client wants financial assets distributed to their children. Many parents prefer to put money into a trust that can be accessed when children reach a specific age.

I also work with my clients to ensure their beneficiary forms are up to date with their spouse for any life insurance policies, bank accounts and retirement accounts. Beneficiary forms will overrule any decision written out in a will, so it is important to help your client make sure those are current, especially if your client has a former partner who may have been previously named in the policy.

For same-sex couples, it is particularly important to state a clear medical power of attorney and create a living will that dictates any medical directives should they become incapable of making those decisions on their own. If your client is not married, this will give their partner the legal protection they need in order to make those decisions. It is important for your client to take time to have those conversations with their partner so that

WHAT SAME-SEX PARTNERS NEED TO KNOW ABOUT ESTATE PLANNING

the plans and directives are clear. I tell my clients to let their families know of their intentions as well, so they are aware of the established decisions.

is not the biological parent and has not legally adopted the children, it should not be assumed that they will automatically be named guardian — those rules also

legal but resided in states where the marriage was not recognized. If your client and their partner broke up but did not legally dissolve the union, it may still be legally binding. Furthermore, some states converted civil unions and domestic partnerships to legal marriages, so your client and a former partner could be legally married without realizing it.

If a former union was not with their current partner, make sure your client legally unbinds it to avoid any future disputes on their estate.

Check Real Estate Documents

Same-Sex Couples — Nearly 1M Households • Since 2014, the year before the U.S. Supreme Court legalized same-sex marriages, the number of married same-sex households has increased by almost 70%.

• 980,000 same-sex couple households were reported in the U.S. in 2019. Of those: - 58% were married and 42% were unmarried.

- 1 5% of same-sex couples had at least one child under the age of 18 living with them.

Similar to making sure both your client and their spouse have equal custody rights to their children, it is important to encourage your client to check their real estate documents to confirm that both partners are listed and have equal rights to home ownership, especially if the home was purchased prior to the legalization of same-sex marriage or if they aren’t married. There are a few options for how to split ownership of their property. » Tenants in common: This states that both partners share ownership of the property but allows each individual to leave their share to another person in their will.

-S ame-sex married couples had a higher median income than opposite-sex married couples, $107,210 compared with $96,932.

» Joint tenants with rights to survivorship: In this path, both partners are property owners, but if one dies, the remaining partner retains sole ownership.

SOURCE: U.S. Census Bureau

Estate planning can be a complex process, and same-sex couples might feel additional pressure to ensure they have a legally binding plan. However, helping same-sex couples through the estate planning process, familiarizing them with the laws in the state where they live and, ultimately, putting a proper plan in place can help provide peace of mind knowing their family is protected.

A letter of intent is a written, personal note that can be included to help state a client’s wishes and offer reasoning for the decisions.

Protecting The Children

In the forefront of every parent’s mind is how to protect their children. For clients who have children under 18 years old, their plan should name a legal guardian for them in case both parents die. Samesex couples must make sure that both parents have equal rights, especially in a case where one parent is the biological parent. If the surviving spouse or partner

vary from state to state. The best protection one can leave their children is to be proactive in appointing a guardian and confirming that both parents have the same legal rights.

Dissolve Old Unions

While legalizing same-sex marriage has given couples better protections for their assets and families, there could be challenges if your client entered into a civil union or domestic partnership before marriage was legalized. Prior to the 2015 marriage equality ruling, some same-sex couples married in states where it was

Filomena Gomes, RICP, is a Northwestern Mutual financial advisor in Orlando, Fla. She may be contacted at filomena.gomes@ innfeedback.com.

September 2021 » InsuranceNewsNet Magazine

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INBALANCE

Don’t Wait To Beat Procrastination

Everyone has a task they dread. Here are some tips for not putting off until tomorrow what you can do today.

D

By Susan Rupe

oes any of this sound familiar?

You can’t fit one more item in your garage (or attic or hall closet or spare bedroom,) and you’re not even sure what half of that stuff is. You say you’ll clean out the space and organize the stuff “one of these days,” but months or even years go by and you still haven’t done it.

Company is coming to celebrate a special holiday in two days. You’re in panic mode because you haven’t yet done anything to prepare.

Your car goes way too long between service appointments; you haven’t seen a doctor or a dentist in who knows how 56

long; and there’s a growing list of things around the house that are waiting for a handyman or a plumber or an electrician to attend to. You say you’ll call and make arrangements for these things to be done — tomorrow or maybe next week.

It’s easy to procrastinate — especially if the thing we’re putting off is something we dread or seems like too much work to begin with. But procrastination adds to our stress level and can cost us our money and our health.

So how do we stop putting things off?

Here are some ideas from behavioral experts.

Swallow That Frog

There’s a saying that goes “Eat a live frog first thing in the morning and nothing worse will happen to you the rest of the day.” Self-help expert Brian Tracy immortalized that saying in his 2001 book, Eat That Frog! 21 Great Ways to Stop Procrastinating and Get More Done in Less Time. Tracy’s theory is that the “frog”

InsuranceNewsNet Magazine » September 2021

represents the most difficult and important task you face and that you should tackle it before you do anything else.

The “frog” is something you have been avoiding, but it’s also something that will have a major impact on your life and serious consequences if you don’t do it.

Break It Down

What’s your frog today? What will it take for you to address it? Sometimes, the task that seems so distasteful and daunting can be less so if you break it into manageable pieces. An added bonus of this method is that as you make small steps toward completing the task, you are more likely to complete it.

Take the previous example of company arriving for a holiday in two days.

What are all the tasks that need to be done to accommodate them? Cleaning, food purchasing and preparation, decorating the house, buying gifts? Breaking down these tasks into subtasks (for example, if you need to clean the house, make sure you have the supplies you need) also will help you move toward completing your goal.

One caution, though. It can be easy to get bogged down in working through all these steps. If the end task is something you really don’t look forward to doing, you can find yourself procrastinating even further by spending too much time on the “small stuff.” So set a time limit on it.

Schedule It

Make a date with yourself to complete the task. You schedule all the important things in your life, so why not set aside time to do things that aren’t much fun but need to be done? Scheduling the task also can mean you will be less likely to wait until you are “in the mood” to tackle it.

You may be putting off starting an exercise program. But you might be more likely to get moving if you block out a half-hour on your calendar to take a walk every day, or schedule an “appointment” for an hour at the gym twice a week.

For tasks that have a deadline, mark the deadline on your calendar and work backward from there. In the example we used of an approaching holiday, schedule time as the holiday approaches to go shopping, clean the house, etc.

DON’T WAIT TO BEAT PROCRASTINATION INBALANCE Accomplishing these goals on the way to the big task will go a long way in reducing your stress and anxiety.

In making those phone calls to schedule appointments with the auto mechanic, electrician, dentist or other professional you’ve put off contacting, you may be less likely to procrastinate if you put “Call for car servicing” as the first item on your daily calendar in the next day or so. Consider it an “appointment to make an appointment” if you will.

Write It Down

It’s easy to say you should write these tasks down so you will be less likely to put them off. But it’s also easy to lose a paper list. Use your phone, Outlook or

hold you accountable for working on your fitness goals — or even going to the gym with you — will help get you moving. Or, if you’ve been putting off scheduling a doctor’s appointment, asking a trusted friend to check in with you to see whether you’ve done it can give you a needed nudge.

Reward Yourself!

We give kids gold stars or an extra snack as an incentive for doing tasks they don’t want to do. Why not set a reward for yourself for accomplishing something difficult without putting it off?

The reward could be scheduling an hour or two for something you really enjoy, buying yourself some small

If the end task is something you really don’t look forward to doing, you can find yourself procrastinating even further by spending too much time on the “small stuff.” So set a time limit on it. other scheduling software to name your tasks, set deadlines for completing them and list the things you need in order to accomplish them.

In the example we used of cleaning out a storage space, will you need empty boxes, garbage bags, extra bins or hangers?

Make a list. Once you buy or collect the things you need to finish your task, you are more likely to use them and complete the job.

Find An Accountability Buddy

It’s likely that you already have someone at home who is after you to complete the task you’ve been putting off. Make an accountability pact that you will at least get the job started by a certain date or time.

If it’s exercise that you’ve been putting off, having a friend or family member

indulgence or doing whatever gives you joy. For example, when I started an exercise program a few years ago, I decided I would treat myself to a new dress as soon as I reached a particular fitness goal.

Of course, the greatest reward for not putting off the task you dread is the freedom from anxiety and stress that you get from not procrastinating.

Go out there and eat that frog!

Susan Rupe is managing editor for Insurance N ewsN et.

She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

September 2021 » InsuranceNewsNet Magazine

57

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BUSINESS

Marketing: You Need To Get Uncomfortable To Succeed Every advisor must overcome three common hurdles when it comes to marketing.

By John Pojeta

M

arketing isn’t a shot in the dark. It’s not a guess or a gut feeling. Successful client acquisition methods are all about discipline, consistency and coping with ambiguity. I recognize that most advisors are in business to advise. They are not in the business to be great marketers, so they do just that — advise!

Every advisor faces three common hurdles when it comes to marketing: time, desire, and no recent or relevant successful experience. It is a natural tendency to find an expert to help you in marketing.

Regardless of whether you embrace marketing, view it as a necessary evil or feel entirely indifferent about it, I have three ideas to help you improve your marketing efforts quickly.

Trust The Process

We all have been there — the day of reckoning. It’s time to get healthy. There are a million methods and tools, but aside from health, what do these approaches have in common? They all have a simple, prescribed plan; if you follow it and don’t deviate from it, you’ll see positive results. It’s just as simple as following the plan. Marketing isn’t that different — you have a proven program. All you have to do is follow it.

When managing a financial profile, it’s a bit different. Ultimately, every advisor would like to manage their client’s complete financial portfolio. This isn’t the case many times, and you are managing only a portion of the client’s profile. You don’t simply suggest one strategy while ignoring how it affects other aspects of the client’s financial plan. You hope that, with a history of good advising, all of the client’s financial pieces eventually will be 58

To truly grow your marketing efforts, you might have to think outside the, well, you know... yours to manage. In the meantime, that doesn’t stop you from determining the best approach to manage the pieces that you do have.

Now apply that same philosophy to your marketing. You must trust the process. You ask your clients to trust the process you have built for them; you must do the same with the process the marketing experts have created for you.

Acknowledge The Emotional Side Of Marketing

Back to that healthy living resolution. How you feel about your body is completely tied up in your emotional well-being. When you aren’t happy with what you see in the mirror, it affects your confidence.

There’s a reason the term “emotional eating” exists.

Like it or not, marketing has an emotional element to it. Most of an advisor’s time is spent managing emotions, both our own and those of our clients and prospects. That doesn’t change when it comes to marketing. I’m talking about the raw emotions of the situation, new lead activity and ultimately sales, as well as your ability to narrow the standard deviation associated with marketing.

InsuranceNewsNet Magazine » September 2021

One of the most powerful emotions involved is managing expectations when there is a lack of short-term results. We cannot have an urgency addiction with marketing. Otherwise, it could drive you to quit. How many efforts have you made over the years toward business growth that you abandoned too early or because you didn’t trust the process?

At the first sign of a lack of results, how do we respond? Jan. 19 is the date that New Year’s resolution gym traffic begins to drop off. Nineteen days. Just like the gym, why do so many of us abandon our marketing plans way too early?

Too often, we build marketing plans based on “ideals.” What is an ideal client for you to obtain? We often think about marketing this way versus helping us gain more bread-and-butter clients while naturally adding some ideal ones along the way. Acquiring a reliable bread-andbutter client genuinely helps us believe in and stick with a marketing approach while adding new clients that matter. Any form of marketing takes time, consistency of behavior, and the ability to cope with adversity.

The other big emotion we need to get comfortable with is getting uncomfortable.

MARKETING: YOU NEED TO GET UNCOMFORTABLE TO SUCCEED BUSINESS

Which Emotions Should Your Marketing Inspire?

Happiness?

Fear/ Surprise?

Sadness?

Disgust/ Anger?

Source: Institute of Neuroscience and Psychology at the University of Glasgow

Any type of real growth requires you to do new things and get uncomfortable. Embrace the discomfort; don’t shy away and revert to what you know with marketing. Real growth comes from change and risk.

Your fitness plan is laid out for you, but ultimately, you are the one putting in the hard work. Marketing isn’t all that different.

It’s Up To You

Either you are running the appointments

that are generated, or you decide who does.

We know there is a tendency for advisors and people in the finance and insurance space to be analytical by nature, and that attention to detail serves you well in those realms. However, if you or your salesperson falls into this analytical category, you will most likely struggle with marketing in general — more specifically in closing these types of appointments.

We all have been in a meeting when someone presents an idea and, after the

presentation, our reaction is, “I’m not exactly sure where that train is going, but I know I want to be on it.” That person is dynamic, engaging and personable. They draw us in, and we want to know more. These people are very good at getting someone to do something they otherwise would not do themselves as well as not being manipulative in the process. It’s a delicate balance, but this is the person who should be running your marketing and sales efforts. Like all business aspects, it’s about having the right people in the right seat.

Regardless of who picks up the phone, you need to drive the appointment activity, trust your process, manage the emotions of those involved and have the right person running each meeting.

John Pojeta is the vice president of business development at The PT Services Group. He previously owned and operated an Ameriprise Financial Services franchise for 16 years.

John may be contacted at john.pojeta@ innfeedback.com.

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September 2021 » InsuranceNewsNet Magazine

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More than 850 financial services companies in more than 70 countries turn to LIMRA first to help them build their businesses and improve their performance.

The Need For Life Insurance Has Never Been Greater This moment is an opportunity for our industry to fulfill our mission and help millions of families protect their financial future.

By David Levenson

O

ver the past 18 months, the COVID-19 pandemic changed nearly everything in our lives. And although the vaccine has offered hope that we will be able to return to some level of normalcy, the Delta variant has put the timeline of that return in question as infection levels are starting to escalate again.

The pandemic has prompted many of us to reevaluate our physical and financial health. Related to that, LIMRA research finds the pandemic has heightened Americans’ awareness of the need for life insurance. According to the 2021 Insurance Barometer Study conducted by LIMRA and Life Happens, 31% of Americans say the pandemic has made them more likely to buy life insurance within the next 12 months.

However, life insurance ownership has continued to decline in this country. Today, slightly more than half of American adults (52%) have life insurance coverage, down 11 percentage points from 2011. Many more recognize the coverage they have isn’t enough to protect their loved ones’ financial security. In fact, 102 million uninsured and underinsured Americans say they need (or need more) life insurance coverage.

This moment is an opportunity for our industry to fulfill our mission and help millions of families protect their financial future. To be successful, we need to understand the reasons so many put off buying the life insurance that they know they need. Those reasons are 1) it’s too expensive, 2) I have other financial priorities, and 3) I don’t know how much or what to buy. All of these reveal a need for greater education. Here’s where we can help.

60

Today, slightly more than half of American adults (52%) have life insurance coverage, down 11 percentage points from 2011.

Consumers believe life insurance is too expensive, but the research shows that’s because they don’t actually know what it costs. When we asked, half of Americans overestimate the cost of life insurance by threefold. The reality is that a healthy 45-year-old (or younger) can properly insure their family with $500,000 protection for less than $1.50 per day.

Consumers say they have other financial priorities like saving for retirement, paying down debt and paying monthly bills. This demonstrates their limited understanding of the many ways life insurance can support overall financial security. Life insurance can create replacement income to keep families from worrying about their day-to-day bills.

It can pay off mortgage or other existing debt, fund educational goals or pay down student loans, and supplement retirement income. Our research shows it also provides peace of mind to families, knowing that loved ones will be protected should the unexpected occur.

Finally, consumers say they don’t know how much or what to buy. This is where our industry must rely on the 330,000 full-time life-licensed agents and advisors to engage and educate their clients and prospects about life insurance.

Although there is so much information available online, consumers tell us they worry whether what they are accessing is credible. Our research suggests that most consumers (82%) find the information they get from a financial professional is the most helpful — likely because it is personalized, addressing

InsuranceNewsNet Magazine » September 2021

their specific circumstances. Yet only 44% of Americans currently work with a financial professional. According to our research, 25% of Americans — equating to 65 million people — are looking for a financial professional. Many of these individuals are living with a life insurance coverage gap. It is incumbent upon our industry to help them close that gap.

The COVID-19 pandemic has been a massive challenge for Americans and everyone around the world. In times like this, we learn and understand our true vulnerabilities. This is what prompted LL Global to come together with seven other trade associations to launch the Help Protect Our Families campaign, an industrywide effort to raise awareness about the importance of life insurance and help insurance carriers, distributors and agents/advisors address the growing coverage gap in the U.S. September is Life Insurance Awareness Month. The pandemic has significantly increased consumers’ appetite to take the steps to ensure they are properly protected with life insurance. All of us in the industry have both an opportunity and a responsibility to help our fellow Americans get the life insurance coverage they need to protect their loved ones.

Now is the time to take action.

David Levenson is president and CEO, LIMRA, LOMA and LL Global.

He may be contacted at david.levenson@ innfeedback.com.

INSIGHTS

The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.

The Benefits Of Permanent Life For Middle-Income Earners Many middle-class Americans may be unaware that permanent life insurance provides financial security while they still are alive.

By Kerry Wallingford

L

ast year, predictions abounded that COVID-19 would spark a rise in life insurance sales — and it did.

A LIMRA study released in May 2021 confirmed those predictions, with new policies increasing 11% year over year. With so many Americans joining or returning to the life insurance fold, advisors should work to ensure clients are well versed on all their options, including permanent life.

For many Americans — particularly those in the middle class — the main point of life insurance is the death benefit: how much security they want their families to have once the client is gone. However, they may not be aware of the living benefits that permanent life offers them while they’re still alive. Explaining these benefits while interest in life insurance remains high can help set clients up for greater retirement and overall financial security.

Working Toward Permanent Life

While high-income earners are typically seen as best suited for a permanent life policy, most clients making at least $70,000 per year can at least consider it. As long as clients are saving at least $300 a month on top of 401(k) contributions and emergency fund upkeep, permanent life is probably an option worth exploring.

Before discussing permanent life with your client, make sure they’re covering the financial basics first: emergency funds, fun money and 401(k) contributions up to an employer-matching level. It’s possible to afford permanent life insurance with moderate levels of debt, but the extreme, six-figure levels of student debt that come with medical or law school are too high.

Any debt that has an interest rate of 5% or higher should be reduced before a perma62

nent life policy is purchased.

Some clients may think they’re too old for permanent life, but here is no hard age cutoff for the policy. Older clients will need to contribute more to a policy now to make full use of it in retirement, but that is a perfectly feasible plan if they have the necessary extra income.

permanent life cash value lasts longer than traditional retirement accounts.

Securing Retirement

Nonretirement Benefits

You may need to explain the basics of permanent life and how it can create retirement income for middle-income clients.

Walk them through how most permanent life policies place part of the monthly premium — and, in some cases, extra contributions — in a cash value investment account. This fund grows tax-deferred like a typical 401(k) or individual retirement account. Although the disadvantage is that these cash funds usually grow at a lower rate than the market, the upside is that clients can take advantage of their policy’s cash value without ever paying any taxes.

If they have a large enough cash value in their permanent life policy, clients can generate retirement income by taking out loans against that cash value. While this does require clients to put a substantial amount of money into the policy over time, these loans are tax-free and low-interest and don’t have to be paid back. The amount of any loans left unpaid is simply subtracted from the remaining death benefit. For middle-income clients who can handle the high premiums, this can be a stable and attractive source of tax-free retirement income.

Some middle-income clients may hesitate at the idea of taking out so many loans, even after they learn they don’t have to pay them back. This is an opportunity for advisors to explain another advantage of these loans; since the loans aren’t withdrawals from investment accounts, permanent life cash value accounts will retain more value and generate more income than an IRA, 401(k) or bond fund with an equal value at the start of retirement. To put it simply,

InsuranceNewsNet Magazine » September 2021

As long as clients are saving at least $300 a month on top of 401(k) contributions and emergency fund upkeep, permanent life is probably an option worth exploring.

Loans taken out against a permanent life policy’s cash value can be used for more than just retirement income, and this factor can be attractive to middle-income clients. They can be used for big-ticket items such as weddings or their children’s college. The low interest rates mean they can also be used to pay off higher-interest debt, such as student or auto loans. Plus, neither the cash value of a permanent life policy nor any loans against it count toward the expected family contribution for a child’s college expenses under the Free Application for Federal Student Aid. Permanent life often comes with riders that allow the use of a death benefit to pay for long-term care needs or a suspension of premiums for long-term disabilities. These riders offer a crucial part of retirement security, especially considering the high numbers of Americans who will either become disabled or need long-term care.

Not everyone will need permanent life, nor is everyone qualified for it. But for middle-income clients seeking both a death benefit and retirement security after COVID-19, advisors can guide them through permanent life options and find the best-fitting, individualized solution.

Kerry Wallingford, RICP, CLU, ChFC, of Normandy Park, Wash., is a 21-year MDRT member with 11 Top of the Table qualifications, specializing in retirement, business and college planning. Kerry may be contacted at kerry.wallingford@innfeedback.com.

INSIGHTS

Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.

Celebrations Such As LIAM Mix Fun With Facts These special monthlong campaigns are reminders that we can help our clients meet all their insurance and financial planning needs.

By Bryon Holz

“I

just want to CELEBRATE!” This opening line of Rare Earth’s song of the same name is one of the most positive and energetic anthems from the 1970s. Their bold proclamation, celebrating life and living, is a message that reverberates even today and will echo well into the future.

In the early days of social media, our team wanted to have a significant, ongoing presence that balanced information and entertainment — fun along with facts. One of my longtime friends and clients has a nationally broadcast radio program, during which he used to feature funny days of observance as a part of the show. This could be anything from National Frozen Food Day to World Plant a Tree Day. We had fun doing this as well, and we soon became known for these social media posts in addition to posts that focused on topics more closely associated with what we do as financial professionals.

Several years later, the concept seemed tired. So we transitioned the “fun” part of our social media program to align more with our evolving brand of the classic rocker aimed at our baby boomer target market.

Yet along with keeping the more traditional holidays on the calendar, we were certain to keep several important observances. These included Insure Your Love in February, Disability Insurance Awareness Month in May and Life Insurance Awareness Month in September.

As both insurance agents and securities-registered financial advisors, our practice offers investments in addition to life and disability insurance and annuities when serving our clients. And sometimes

those with one type of product or service might not remember that we offer others.

These special monthlong campaigns are reminders that we can help meet their life and disability insurance needs in addition to assisting with their retirement planning.

One of our greatest challenges as insurance and financial advisors is balancing the hearts and minds of our clients and prospects — and their emotions with logic. Campaigns such as LIAM provide an excellent opportunity to overcome this challenge. We schedule our social media posts more than a month in advance and are sure to include a predetermined mix of fun and facts, appealing both to one’s intellect and emotion.

A good friend and colleague refers to life insurance as love insurance, with the belief that you should only purchase it if you love someone. This highlights the fact that buying life insurance is an emotional decision. Yet this must be done with an understanding of how life insurance works, as well as determining the appropriate type and amount of coverage.

We balance personal stories of those who have lost loved ones, both with and without coverage, along with impactful statistics. The traditional approach to life insurance sales, “backing the hearse up to the door,” doesn’t usually elicit as positive a response unless supplemented with the more personal, warm and fuzzy messages we include in our campaigns.

LIAM and IYL help remind us why we should protect our loved ones … because they’re loved. Third-party resources, such as those from Life Happens, provide very visible, impactful messages and celebrity spokespersons we’re sure to leverage in our campaigns. Again, a successful social media campaign should have a careful blend of emotion and logic, statistics, and stories. Highlighting famous personalities from actress Brooke Shields to race car driver Danica Patrick surely draws positive attention. Yet the simple story of a widow or widower who was able to

Kelly Rowland is the celebrity spokesperson for 2021 Life Insurance Awareness Month.

maintain dignity for their family because their spouse had sufficient life insurance coverage can bring an even stronger emotional reaction.

With the current pandemic and other recent disasters and crises, clients and prospects alike are even more open to hearing and responding to the message of “love insurance.” These simple yet powerful posts create both interest and action, as our insurance sales and referrals always increase during these campaigns.

A great thing about material from organizations such as LIFE Happens, FinancialSecurity.org (NAIFA) and the Alliance for Lifetime Income (protectedincome.org) is that they’re not from a specific insurance company or agent.

This, along with their celebrity spokespeople, enhances their credibility among consumers. We especially enjoyed using materials from the Alliance for Lifetime Income as their sponsorship of the recent North American Rolling Stones tours fits well with our baby boomer branding.

Like Rare Earth’s timeless classic, Life Insurance Awareness Month is an opportunity to celebrate another day of living — as life insurance is for the living and resonates long into future generations.

Bryon Holz, CLU, ChFC, LUTCF, CASL, LACP, is president and registered principal at Bryon Holz & Associates in Brandon, Fla. He serves as NAIFA’s 2021 national secretary and is in line to be NAIFA president in 2023. He may be contacted at bryon.holz@innfeedback.com.

September 2021 » InsuranceNewsNet Magazine

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INSIGHTS

With nearly 100 years of experience, The American College is passionate about helping students expand their knowledge and opportunities as financial professionals.

An Unexpected Lesson In Love

The couple never could have guessed that years after taking out the policy, one of their family’s greatest milestones would quickly turn into one of their worst....

There are many reasons for buying life insurance, and they have one thing in common.

By Steve Parrish

W

hat do life insurance and love have to do with each other? More than you would think.

When I started my career, I was tasked with hand-delivering a death benefit check to a widow who lived in my area.

The husband had owned a business, and his family’s livelihood depended on his company’s continued success.

The couple’s daughter had been married at the family home on a beautiful spring day. The wedding reception was held in their backyard. While guests celebrated the happy occasion, the bride’s father took a quiet moment to impart some wisdom to his child before she embarked to her new journey. As he turned to speak, he collapsed. The widow later told me that he had died immediately of a massive stroke.

Lesson Of Love

Years before he walked his daughter down the aisle, the patriarch realized that money would be needed if something unexpected happened to him and he was no longer around. He loved his 64

family deeply and wanted to take care of them no matter the circumstances. That’s why he invested in life insurance through his company.

The couple never could have guessed that years after taking out the policy, one of their family’s greatest milestones would quickly turn into one of their worst. Nor could they know that because of this simple financial transaction, the emotions of the tragic day wouldn’t be made worse by looming financial insecurity.

Because of his act of love, the life insurance proceeds were available after his death to help pay for his daughter’s wedding, provide his widow with an income and help the family wind down his business.

It turns out that this was the only life insurance death benefit I ever delivered.

I’ll never forget the unexpected lesson.

You buy life insurance because you love someone.

You Owe It To Them And To Your Company

Of course, love isn’t the only reason to buy life insurance. In business, there are many reasons. Buying life insurance on a key person is one good one. You owe it to them and to your company.

If a key person dies, the company not only has to deal with the loss but also could face a plethora of challenges and

InsuranceNewsNet Magazine » September 2021

could stand to lose a lot financially. The company may have its debt called. The loss of the key person may result in lost sales. Finding a replacement could be an expensive and lengthy endeavor.

And some of the company’s financial loss may be because the business owes that person’s heirs money. For example, if a key person owns stock in a closely held business, life insurance proceeds can be used to buy the stock from the key person’s estate.

Similarly, if that executive has a deferred compensation agreement with the company, life insurance proceeds can generate the liquidity needed to make good on the promised compensation.

September is Life Insurance Awareness Month, and I encourage financial professionals working on holistic financial plans to talk to their clients about what will happen to their loved ones if they were no longer there to provide for them. I also encourage you to talk to your clients about the potential challenges their business could face if a key employee is lost.

Steve Parrish, JD, RICP, CLU, ChFC, RHU, AEP, is adjunct professor of advanced planning and co-director of The American College Center for Retirement Income. He may be contacted steve.parrish@innfeedback.com.

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