Life insurance: The bedrock of estate planning Even as Americans voice estate planning concerns, most fail to act. PAGE 18 How to build a better business model — with Dean Zayed PAGE 20 A niche market big enough to fuel your life insurance business PAGE 38 THIS MONTH: THE LIFE AWARENESSINSURANCEISSUE Life • Annuities • Health/Benefits Financial Services • Multiline SEPTEMBER 2022
Full article on page 8.
Getting there faster with Legal & General America through data and science.
futuresBrighterahead
Moving the needle by removing it
Now heading into the second half of 2022 with lessons learned and digital transformation happening everywhere, insurance carriers can do more than ever before, with their underwriters driving change in the life insurance industry one accelerated application at a time, often with no needles required.
Turn to page 8 to learn how innovation is bringing the latest renaissance to both the underwriting process and the life insurance application journey for advisors and their clients.
How underwriting shifted with the new normal.
Phrases like “I’m sure it’s fine”, “Just take some ibuprofen”, “I’ll get it checked when the pandemic is over” were a dime a dozen in 2020 and even in 2021 when it came to dealing with one’s health. More and more people were delaying annual physicals or unable to see a physician due to COVID restrictions and doctor availability.
The COVID-19 Effect: high tech with human touch to optimize life insurance customer experience* Pandemic’s influence on life insurance purchasing habits. 32% Pandemic-related events 29% Influence of friends and family 23% Marriage or birth
And at that moment, more people were looking into life insurance than ever before. But advisors were isolated at home; virtual visits were only starting to take form; and the thought of inviting a stranger into your home to take fluid samples for an application was a non-starter.
*October 2020 LIMRA Report
For Financial Professional Best-In-Class Advanced Concepts for Your • Executive and • Buy-Sell Agreements • Succession Planning • Roth Conversions • Nonqualified Retirement • Premium Financing • Estate Equalization WE CLIENTSCAN
Take advantage of our:Spend your time doing what you do best — working with your clients. Call with your case details and we’ll get you ready for the sale. Fixed Annuities Indexed | MYGA | SPIA | Annual Reset It’s that simple. Call 866.598.3694 to receive your custom quote. 22-07.22-IC22-EQT-1094 Simple, ProductsClient-Friendly Easy to understand and explain Strong Renewal Rates No teaser rates; sell with confidence Dedicated Support We answer the phone when you call YOU HAVE A JOB TO DO. We’ll help you do it. 7TH CONSECUTIVE YEAR 2022 Recipient of Ward’s 50 Top Life and Health Companies © 2022 EquiTrust Life Insurance Company. All Rights Reserved. For Producer Use Only.
38LIFE
By John Hilton and Doug Bailey
Diana Yanez wants people to feel all the feelings where money is concerned.
Consumers seek trust and results in advisor relationships
FEATURE
50ADVISORNEWS
this month’s issue it
Send
2 InsuranceNewsNet Magazine » September 2022
How ‘solution stacking’ can rein in pharmacy benefit costs
The proliferation of custom index choices is good news for annuity clients.
IN THIS ISSUE online» read
in, or untimeliness or inauthenticity of, the information published herein. Address Corrections: Update your address
By Joshua Cruce
6INFRONT
10INTERVIEW
www.insurancenewsnet.com/topics/magazineViewandsharethearticlesfrom
Ways to make remote work work
IUL illustrations, drones and insurance, and the age when you might want to consider LTCi.
32 Live life in color
By Kevin Kobielski
A little ingenuity can make a significant impact on drug spend and trends.
18 SEPTEMBER 2022 » VOLUME 15, NUMBER 09 INSURANCE & FINANCIAL MEDIA NETWORK 150 Corporate Center Drive • Suite 200 • Camp Hill, PA 17011 717.441.9357 www.InsuranceNewsNet.com PUBLISHER Paul Feldman EDITOR-IN-CHIEF John Forcucci MANAGING EDITOR Susan Rupe SENIOR EDITOR John Hilton VP, SALES & MARKETING Susan Chieca CREATIVE DIRECTOR Jacob Haas GRAPHIC DESIGNER Shawn McMillion SENIOR CONTENT STRATEGIST Lori Fogle EMAIL & DIGITAL MARKETING SPECIALIST Megan Kofmehl TRAFFIC COORDINATOR Sorayah Talarek MEDIA OPERATION DIRECTOR Ashley McHugh NATIONAL SALES DIRECTOR Sarah Allewelt NATIONAL ACCOUNT DIRECTOR Brian Henderson NATIONAL ACCOUNT DIRECTOR Dominic Colardo DATABASE ADMINISTRATOR Sapana Shah Copyright 2022 Insurance & Financial Media Network. All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail editor@insurancenewsnet.com send your letter to 150 Corporate Center Drive, Suite 200, Camp Hill, PA 17011, fax 866.381.8630 or call 717.441.9357. Reprints: Copyright permission can be obtained
By Domarina Oshana
Research reveals what creates and destroys trust in relationships.advisor/client
How to expedite claims after a catastrophe
By Irina Papuc and Zach Boyette
A niche market big enough to fuel your life insurance business
What to do now to make the claims process easier after disaster strikes.
INSURANCE & FINANCIAL MEDIA NE TWORK 10 26 Life SeptemberSpecialInsuranceSection:Thought Leadership Series
42ANNUITY
56BUSINESS
lost when it comes to estate planning. The answer might be as easy as starting with a good life insurance policy. through InsuranceNewsNet at 717.441.9357, Ext. 125, or reprints@insurancenewsnet.com. Editorial Inquiries: You may e-mail editor@insurancenewsnet.com or call 717.441.9357, ext. 117. To access InsuranceNewsNet Magazine’s online media kit, go to www.innmediakit.com or call 717.441.9357, Ext. 125, for a sales representative. Postmaster: address changes to InsuranceNewsNet Magazine, 150 Corporate Center Drive, Suite 200, Camp Hill, PA 17011. Please allow four weeks for completion of changes. Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects at insurancenewsnetmagazine.com
IN THE FIELD
Life insurance: The bedrock of estate planning
Being flexible, establishing community and workforce.effectivekeysbondsencouragingarethetoanremote
By John Forcucci
How to build a better business model — with Dean Zayed
More custom index choices = greater upside potential
Advertising Inquiries:
What’s in the news at INN
Dean Zayed had the idea to merge legal advice with financial and insurance advice to form a one-stop shop for those needing help in planning their financial future. In this interview with publisher Paul Feldman, Zayed describes how he founded Brookstone Capital Management, an $8 billion company.
By Lloyd Lofton
54MULTILINE
By John Rafferty
46HEALTH/BENEFITS
One in four Black Americans said they need life insurance.
By John AmericansHiltonare
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Not only do clients choose the amount of death benefit protection that they need, but also choose how long they want to guarantee the death benefit.
There’s no reason to wait. Call 1-888-501-4043 today or visit img.anicoweb.com for more information or to run a quote. Policy Form Series: GIUL21, ABR14-CT, ABR14-CH, ABR14-TM (ND & SD Form Series ABR22-CT, ABR22-CH, and ABR22-TM) ULNC14, ULPTP14, and ULUNC21 (Forms May Vary by State). American National Insurance Company, Galveston, Texas. For Agent Use Only; Not for Distribution or Use with Consumers. AMERICAN NATIONAL INSURANCE COMPANY 888-501-4043 | img.anicoweb.com IMG22693 | INN 09.2022 SIGNATURE PROTECTION INDEXED UNIVERSAL LIFE LOCK PROTECTIONBALANCEDIN Offer balanced coverage with Signature Protection IUL. The perfect fit for risk-averse consumers. For those who want cost efficient guaranteed death benefit protection with accumulation potential that’s protected from loss.
The factors that provide additional dis quiet also appear to be gaining steam. For example, during the first half of 2022, the U.S. had three convective storms, each causing more than $1 billion in damage. And the worst storm damage usually arises during hurricane season in the second half of the year, particularly the third quarter.
With gas prices settling a bit but still very high, the war raging in Ukraine, and inflation showing few signs of abating, what things might look like in September is indeed a mystery.
s you might imagine, Insurance News Net magazine is written a couple of months in ad vance. As I’m writing this Letter from the Editor, it is late July. What’s interesting is that it has been a long time since there were great questions about what the economic landscape is going to look like a couple of months ahead. Until recently, the coun try was on a steady economic course, and most economic news was on the upswing.
Despite the unpredictability, many who have been through such economic storms before say that there is opportunity during
According to Aon’s Global Catastrophe Recap report for the first half of the year: “From a hazard perspective, the finger prints of climate change continued to be come more evident in the individual event behavior and longer-term temperature and precipitation trends in 1H 2022. Warmer than average temperatures were cited across a broad swath of the globe.”
Over the past decade as we moved past the 2008 recession, we’ve become accus tomed to the predictably strong market and low inflation. Looking out a mere two months or so and not having a good idea of what the economy might look like at that time can shake your sense of calm.
I’ve heard a variety of viewpoints on this unpredictability. Life insurance has taken a more prominent strategic position in the retirement planning arena since the market has become more unpredictable. Many advisors have said the classic 60/40 investment strategy can’t be counted on. The increase in interest rates has piqued new interest in annuities. And the indexed product market continues to grow at warp speed with many new indices — some of them so new, they have very little history to support current performance claims.
John Editor-in-chiefForcucci
A
litany of recent market reactions, has likely brought us onto a path to recession.
this period of financial tumult. One per son said you should ignore the day-to-day noise, which will free you up to do what you do best. Most of our conversations about financial investment and insurance re volve around risk and the future. We know there will be down markets and challenges, and the goal is to put a financial strategy in place to provide security and a viable fu ture despite those challenges. Many of the insurance products and investment strate gies we put in place serve that end.
Inflation has increased from a fourdecade record of more than 8% in the past month to a new record of over 9%. That, along with steep Federal Reserve rate in creases to stem the inflation tide and a
The crystal ball is murky
In the U.S., we’ve seen prolonged re cord-high temperatures in some areas, bringing everything from drought to wild fires. As the damages in the natural disaster sector pile up, we’ve also seen higher costs in other areas of the insurance market. Auto costs — for both new and used cars — have gone up significantly as vital chips have become scarce. In addition, inflation has ballooned the cost of auto parts — and therefore repair costs — and supply chain issues have worsened the overall impact.
Please reach out with your thoughts: editor@insurancenewsnet.com.
4 InsuranceNewsNet Magazine » September 2022 WELCOME LETTER FROM THE EDITOR
This is the time that the lessons of the past are most important — and putting a plan in place for an unpredictable future is what clients most count on the financial services industry for.
OUR STORY CONTINUES
THIS IS AN EXCITING TIME FOR TRANSAMERICA, WITH A FRESH VISION, A COMMITMENT TO WIN, AND …
2
See what drives and inspires us as we push forward to be a force for good for our customers.
JAMIE OHL
President, Individual Solutions
I do not see a company that is better equipped to provide the guidance customers need going forward than Transamerica.
Like the industries we represent, Transamerica is evolving. There is an incredible opportunity to build great relationships and deliver products that meet the needs of customers now and in the future. Our purpose, as always, is to put the customer first and design products and services to meet those needs, no matter what change unfolds. Our mission requires building an expert team who can deliver on the promises that we make to our customers and partners.
I am proud to join and work with Transamerica’s leadership team, a collection of industry veterans whose passion and commitment is palpable. I look forward with great anticipation to what we will accomplish together. We will focus on tapping into our industry-leading distribution to drive growth, owning and delivering a reliable suite of products, and providing excellent service.
That’s why I was confident in my decision to come here. But what I truly love to do is help a company evolve and grow.
For generations, Transamerica has made a positive difference in the lives of millions with services that deliver savings, protection, and ultimately financial well-being with an innovative, customer-focused brand.
3
Even in today’s changing world, the questions customers ask are not much different than before. They want to know how to protect loved ones in the event of a disability or death, how to safeguard their income in retirement, and how to grow and protect investments at the same time. We have the products and the ability to answer these questions.
4
II. WENDY BOYD SVP, Managing Director, Wholesale Distribution
Our mission applies to customers as well as the agents and financial professionals whose work remains the heartbeat of our industry. Our goal is to provide unique solutions agents can incorporate into conversations, and these solutions should ultimately resonate with the values by which their clients live. Today’s life insurance is about living, and I think its modern features can offer individuals and families more than our predecessors ever envisioned.
THEBUILDINGRIGHT CULTURE
Winning to us is ensuring customers have financial solutions that enable them to live and retire on their terms, while also ensuring their loved ones will be protected. When that’s your culture, the products and solutions will follow. As our wholesalers embrace the culture we’re building, they do so with integrity and character — putting the needs of the customer at the center of everything we do.
A force for good, a reason to be inspired.
I. DAVE CURRY Chief Distribution Officer, Individual Solutions
Head of Annuity Solutions
THE POWER OF PROTECTION
I believe in the power of life insurance and what we do. We help people in a very meaningful way by helping them live the life they want. Nobody knows what the market environment will be when they retire, and today many retirees are in the right place at the wrong time. The beautiful thing about our solutions is they can help provide protection at a time when it’s needed most.
Moving forward with confidence.
No company should rest on its past accomplishments. They should work to move forward and offer new ideas in an ever changing world. A company should constantly seek improvement not only in its solutions, but in how it interacts with customers. You want to be part of a situation like this, where exceptional talent is coming aboard, and everyone’s working to grow the right way.
III. ANDREW DEMARCO
Head of Life Solutions
5
EXCITEMENT GROWS AS THE JOURNEY BEGINS
There are few carriers who want to grow the way Transamerica does. There are few who are as adamant about the importance of using life insurance to address today’s evolving needs. Providing support for our customers’ loved ones during their greatest time of need is a responsibility we’re honored to fulfill. Everyone’s emotionally invested, there’s no ambiguity — and it drives us.
IV. JON CRESSMAN
VP, Managing Director, Wholesale Distribution, Head of Annuity Distribution
V. LIZA TYLER
Change is rarely easy but is necessary. Just because you are a market leader today is not a guarantee for the future. Our customers’ needs and preferences are changing, too, and we have to keep up. With change comes the responsibility to offer the right guidance that is needed at this pivotal moment. That’s our mission.
I joined Transamerica because I believe in our ability to be a market leader, one that earns trust by delivering on our promises. Customers should know they can count on us to help support their financial futures and provide financial protection for their loved ones. That drives us every day.
6
Pairing talented people with a clear strategy is a winning formula. Our talented team of professionals at Transamerica is committed and energized. We have worked hard to convey our vision throughout the industry, and we are thrilled some of its top talent share that vision and are equally excited to pursue it with us.
Let me begin with this: I strongly believe in our industry’s purpose. It is a privilege to provide solutions and services that help people achieve a lifetime of financial security, and all of society benefits when we serve this purpose well.
The perspectives our leaders wrote about in the previous pages are inspiring. Their unique insight comes from decades of experience, and their acumen will guide us along our journey. We are embracing the work ahead as a team, growing through consistency and focus.
WILL FULLER President & CEO
Transamerica has been serving customers and communities for more than 100 years. We are proud of our innovations, our brand, our accomplishments, and our legacy. Yet today, in so many ways, it feels like … We’re just getting started.
7
For Agent Use Only. Not for Use With the Public. ©1824403R12022Transamerica Corporation. All Rights Reserved.
EMBRACE WHAT’S NEXT
Our industry is changing, and so are we. Behind the ongoing commitment to millions of customers, and more than a century’s experience — we’re ready for the next chapter.
We all play a part, what will yours be?
Visit: transamerica.com
Join us on our journey.
WE’RE GETTINGJUSTSTARTED
There are many reasons people find themselves in this business. For many, the choice is deliberate, for others, they discover something they were always meant to do. Companies are nothing without their people, and it’s the employees of Transamerica that have made us the company we are today.
For Agent Use Only. Not for Use With the Public. ©22576032022Transamerica Corporation. All Rights Reserved.
Visit: transamerica.com
Samuelson
Insurers quickly got around AG 49, ap proved by regulators in 2015, by offering IUL bonuses and multipliers. The IUL Illustration Subgroup working on tight ening AG 49 was given this mandate by the Life Actuarial Task Force: “designs with multipliers or other enhancements should not illustrate better than non-mul tiplier designs.”
“This is, in our view, entirely incon sistent with the intent of regulators in crafting AG 49-A,” the letter reads. “The
The Moore/Samuelson letter did not hold back on the need for immediate reg ulatory action. Some IUL fixed interest bonuses can generate illustrated income more than 60% higher than a base index (BIA) such as the S&P 500, they wrote.
» Reducing the actual option budget so that the lookback rate for the non-BIA ac count matches the BIA.
Regulators tackle ‘gamesmanship’ of IUL illustrations
More troubling
Thesaid.Moore/Samuelson letter identified three tactics insurers are applying to new IUL illustrations:
What’s in the news on InsuranceNewsNet.com
“AG 49-A was designed to target mul tipliers and similar products and appears to have been successful in doing so,” that letter reads.
The latest issue is the same as the last several issues: indexed universal life insurance. Once again, the National Association of Insurance Commissioners’ IUL Illustration Subgroup pondered an other rewrite of Actuarial Guideline 49 as this issue went to press.
But new efforts to game AG 49-A are more troublesome, the Moore/Samuelson let ter explained. Rather than increasing the option budget in order to augment illus trated performance — what buy-up caps and multipliers did — life insurers are now using essentially the opposite strategy, the letter
IUL illustrations, drones and insurance, and what age you might want to consider LTCi.
The net effect is an illustration far better than one produced by, say, the S&P 500, but one that “in the real world, will very likely perform worse,” Moore/ Samuelson wrote.
by John Hilton
“If regulators believe the level of the il lustrated values is unreasonable, we would ask regulators to provide clear objectives for a revised guideline.”
[Editor’s Note: These are some of the major stories to which we are devoting ongoing coverage on InsuranceNewsNet.com.]
Moore
» Deploying the savings in a fixed interest bonus that is added to the illustrated rate and loan arbitrage.
The resulting AG 49-A is barely 18 months old and has failed its lofty goal, said Sheryl Moore of Moore Market Intelligence and Bobby Samuelson of The Life Product Review, who co-authored a comment letter to the subgroup.
State insurance regulators have spent de cades policing the fairness of life insurance illustrations. That cop work continues.
6 InsuranceNewsNet Magazine » September 2022 INFRONT
To read more on this story, visit bit.ly/iul2022
A spokesman for the American Council of Life Insurers said it would submit oral comments similar to the group’s February letter.
gamesmanship currently occurring in il lustrations is similar in effect and perva siveness to the buy-up caps and multipliers that proliferated after AG 49 and resulted in AG 49-A.”
» Using indices with lookback-based illus trated option profits far in excess of the BIA.
Withadjusters.drones,professionals like Hartson can measure, assess and report roof dam age, gutter and chimney wear and tear, and a host of other property claims issues with out ever leaving terra firma.
Traditional insurers are all-in on drones, other tech
versus which customers have less serious damage,” said Jim Wucherpfennig, vice president of property claims at Travelers.
Partly because of consumer demand for the Amazon-like service experience and partly due to the supposed threat — as of yet largely realized — of young insurtechs to disrupt the industry, traditional insur ers are investigating and investing heavily in new consumer-friendly, high-tech tools. Using artificial intelligence, data mining, analytics, even virtual reality goggles, the dusty old insurance industry is just now coming into the technological age.
Travelers, for example, has a proprietary geospatial tool to accompany its drone strategy. That tool maps almost the entire country with high-resolution photos used to compare with photos taken after a catastrophe such as a hurricane, tornado or “Whatwildfire.we have is an AI program run ning in the background that will tell us all sorts of things like how many approx imate claims we’re going to have, which
“So as long as there are no airspace re strictions, we’re flying at almost every one of our property inspections,” he explained. “It’s a tool that we have in our capacity, where if it’s going to help us from an effi ciency standpoint, or a safety standpoint, we want policyholders to consider it as their first option that gives them a good glance at
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journal ism. John may be reached at john.hilton@ innfeedback.com. Follow him on Twitter Doug@INNJohnH.Bailey
Technological innovation can also serve as a recruitment incentive for an industry badly in need of attracting young talent to its field.
To read more on this story, visit bit.ly/insuredrones2022
According to Genworth and Merrill, A Bank of America Company, seven in 10 Americans turning 65 today will need care for prolonged periods in their lives.
is a journalist and freelance writer who lives outside of Boston. He can be reached at doug.bailey@innfeedback.com.
by Doug Bailey
Alex Hartson is one of 700 professional drone operators —trained and employed by Travelers Insurance — who are on the cutting edge of claims processing. Gone are the ladders, measuring tape, Polaroid cameras and other arcane tools of past claims
Travelers is joining other old-line insurers that are working to bring new and innova tive features to a centuries-old business that hasn’t changed much since its inception.
Nearly half of individuals who apply for traditional long-term care insurance after age 70 are denied by an insurer, according to the American Association for LongTerm Care Insurance. That’s because their health records disqualify them or the in surer simply doesn’t write policies for ad vanced-aged“Consumerspeople.simply are not aware of the need to health-qualify for long-term care insurance, so they delay looking into this important protection,” said Jesse Slome, AALTCI director. “After age 65, it gets increasingly hard to be accepted for this protection.”According to Slome, nearly half of indi viduals who applied for traditional longterm care insurance between ages 70 and 75 were either declined or had their appli cation deferred. Over one-third of those applying between ages 65 and 69 were declined. The data comes from association research as well as the just released 2022 Milliman LTCi Survey.
Full automation
by Doug Bailey
September 2022 » InsuranceNewsNet Magazine 7 IN THE NEWS ON INSURANCENEWSNET.COM INFRONT
“The sweet spot for looking into longterm care insurance is generally between ages 55 and 65,” Slome said. “Once people are covered by Medicare, they start seeing more doctors, which is great, but that often increases the likelihood that medical condi tions will be included as part of their health records.”Butmost people in the “sweet spot” ar en’t ready to buy LTCi, according to Bob Chitrathorn, CFO/vice president of wealth planning at Simplified Wealth Management.
The delay in securing long-term care, or the rejection by insurers, has thrown caregiving responsibilities to the chil dren of aging parents. A new survey by Northwestern Mutual showed 46% of mil lennials have been or are currently caregiv ers and 69% took on additional caregiving responsibilities during the pandemic.
This has made them more acutely aware of how secure — or insecure — their parents are in terms of both their health and their finances, Northwestern Mutual said.
Nearly half applying for LTCi after age 70 are denied
Long-term care insurers originally un derpriced their services because they un derestimated how long people would live or based their prices on life expectancy data at the time. Moreover, underfunded policies had to be frequently revised or caused some LTCi companies to fail, dam aging the credibility and stability of the entire industry.
To read more on this story, visit bit.ly/ltci2022
Automating the entire insurance pro cessing system is the goal now of many insurers who, some say, have been slow to invest in and build new technology systems. Even now, many computer pro grammers, software writers and high-tech companies claim that the insurance indus try is their building their market.
what’s going on with the property.”
Insurance carriers began driving the digital change to speed up the entire application process for those looking at protecting their families. With the convenience of online applications, more families can protect their assets and loved ones. Since launching its digital experience, LGA has found that of applications started online, 90% are now completed, compared to the previous 40% when using a non-digital, paper application. 55% of applicants can do so lab-free and 20% of applicants even get an instant approval, which means they have a life insurance policy within seconds of completing the Inapplication.anindustry plastered with paper applications, the historical back-andforth game of telephone between underwriter and advisor could add weeks to a typical application process. As a way of reducing attending physician statements (APS) by leveraging advances in both medical
and digital technologies, LGA simply “lifts” recent lab results from partner organizations with its Lab Lift solution. Well-informed underwriting decisions, under the guidance of experienced underwriters can easily be accelerated with the assistance of these advanced technologies and data, which automate some of the more tedious application processes to free up time for applicant, advisor and underwriter. This enables underwriters to spend their time and expertise on the more complex, less turnkey applications that require a more hands-on approach. The online experience allows the advisor to play a more consultative role along with the administrative tasks.
Advisors can enjoy increased free time either with their own families and friends or by getting more customers during the day and increasing their commissions. For example, the average time to get a policy commission was previously 40–50 business days. That has been cut by more than half with LGA’s experience, with a 2022 goal of
In an effort to leverage the mountains of historical underwriting data through machine learning techniques, LGA brought in data scientists and actuarial experience teams to support the underwriters’ transformation.
The perfect storm of shifting mentalities created by the pandemic and increasing amounts of digital data and processes brought a transformation opportunity to the insurance industry. While the moment was a catalyst for many insurers, Legal & General America (LGA), was already a year into development of digital application and enhanced automated underwriting offerings when the pandemic hit.
DigitalUnderwriting’sRenaissance
“The pandemic’s influence on the public’s mindset encouraged us to further lean into our digital transformation,” said Zach Pugh, Chief Underwriter at LGA. “Our team dove in headfirst, leading the way among American life insurers, focusing on the ease of process for our advisors and customers, freeing our underwriters to spend less time on mundane tasks and more time moving applications through the process quickly.”
“By bringing the expertise of underwriting, actuaries and data scientists together, we’re engaged in a modernization effort that allows us to identify and respond to changes in our mortality experience more quickly,” said Head Data Scientist at LGA, Elijah Gaioni. “This capability has become all the more important both in the COVID era, and as the pace of innovation in the product and underwriting spaces continues to grow.”
How innovation is enhancing the customer experience.
The goal of smoothing over the friction can be addressed now, without waiting for new advancements in the medical world. We see this already as digital systems are removing some of the conflicts that underwriters must address. Their tasks are not easy; take mountains of complex information — medical and pharmacy records, criminal records, credit reports — and find the proper rates and risk tolerances. Following those underwriting rules is only about 10% of the job, 90% is the mentally strenuous work of bringing it all together. As technological advances assist in that 10%, underwriters can do what they do best more effectively, speeding up the process overall of getting coverage approved and written.
30%
of applicants are exam-free
Looking to the future of term life insurance, two goals rise to the top — taking friction out of the buying process and making insurance more viable for those who are currently underinsured or uninsured. As an industry, the innovations around disease detection, management and treatment including immunotherapies for cancer patients, wearable devices that measure heart rate and breathing, drug delivery systems, cell-free DNA screenings, and fall monitors, will continue to create opportunities into the life insurance and underwriting worlds, ultimately driving down costs and increasing accessibility for more potential policyholders.
The future of underwriting continues to be full of opportunities to get more lives covered. And more lives protected means brighter futures for more families.
55% instant approvals 20%
The new digital application is available for Banner Life business only at this time and is not available in New York. Legal & General America life insurance products are underwritten and issued by Banner Life Insurance Company, Urbana, Maryland and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states and in DC. William Penn products are available exclusively in New York; Banner does not solicit business there. Clients who do not fit all automated underwriting eligibility requirements may need to submit additional information like a paramedical exam or other labs or medical records. For broker use only. Not for public distribution. The Legal & General America companies are part of the worldwide Legal & General Group. For broker use only. Not for public distribution. OPTerm policy form # ICC18-OPTC and state variations. In New York, OPTerm policy form # OPTC18-WP. CN 07192022-1
Insurance and technology are having their moment. Insurtechs are now known entities and cropping up on every corner. Innovation in underwriting is not going anywhere. The last bastion of analog processes is moving into the 21st century with calculated risks, ironing out any irregularities and ensuring that all these changes serve a functional purpose for carriers, advisors and most importantly customers. With established, storied organizations there is a security and comfort in knowing that the technological transformation is done in a thoughtful manner, taking lessons from Silicon Valley and applying them with precision.
having a final decision on 50% of all applications within 10 days. An advisor could get two and a half policies’ commissions issued in the same amount of time, making the digital experience one that is not only convenient but efficient and effective toward bottom lines.
of online applications started are completed
Visit LGA-uw-explained.netlify.app for more information on how we’re transforming the underwriting process to make it easier for your clients to access life insurance.
LGA continues to look for ways to bring accessible products to the public. Pugh emphasizes that while others may lean on digitalization and underwriting innovation to provide auto-decisions for a cost, LGA will focus on constantly, insightfully leveraging data aggregation for more digital application approvals without having consumers paying an additional premium.
“Too often in the insurance industry are resources left on the table for too long, waiting for other industries to experiment first,” Pugh says. “We’re excited to be leading the way at LGA. By bringing all the different machine learning and AI tools to the workbench, things that used to take weeks can now be instantaneous. We can get more information up-front than ever before, taking some hassle away from our people and applicants.”
by the numbers
LGA’s ExperienceDigital
90 %
of applicants are approved within 10 business days
10 InsuranceNewsNet Magazine » September 2022 INTERVIEW
How DEAN ZAYED merged estate planning with financial services to create an $8 billion company.
An interview with Paul Feldman, publisher
Feldman: What would you tell an agent who’s thinking about getting registered? Is this a good time?
Zayed is the founder and CEO of Brookstone Capital Management. Brookstone has gone through a number of changes in recent years, first partner ing with AmeriLife in 2019 and, about a year later, with FormulaFolios, resulting in what is now a more than $8 billion company.Aself-professed lifelong learner, Zayed started out with a B.A. in economics from Northwestern University, then obtained his juris doctor degree from Northwestern School of Law. Zayed also obtained a master’s degree in taxation from Chicago-Kent College of Law and is a Certified Financial Planner.
Zayed: I thought back in 2005 and 2006 that the future was going to be fidu ciary-based, that fee-based would be a prominent theme and there would be a migration from the commissioned oldschool Wall Street brokerage world to this more modern, 21st-century fee-based fi duciary world.
I thought “Boy, this whole side of the in dustry needs a partner, a platform. If I can help incorporate the RIA side of the busi ness into their insurance-only practice, that would be a powerful combination, and everybody would win.”
Feldman: You went from this idea of a “multidisciplinary practice” to becoming interested in the registered investment advisor side of the business. How did that transition occur?
I think we got that right back then. I would say nothing has changed but for the fact that the migration is alive and well. And as we know, with a lot of the laws that have been considered and some of the changes at the Securities and Exchange Commission and the federal level and Congress, fiduciary is the future. There is no doubt about that.
September 2022 » InsuranceNewsNet Magazine 11 HOW TO BUILD A BETTER BUSINESS MODEL — WITH DEAN ZAYED INTERVIEW
Dean
I had this entrepreneurial idea that may be lawyers and financial advisors could work together in what I called a “multidis ciplinary practice.” That’s fancy language for saying let’s have a one-stop shop of professionals that can coordinate the most sophisticated advice that transcends dif ferent disciplines.
dealt with high net worth clients. There’s a lot of overlap between estate planning and financial and retirement planning. The overlap of these disciplines really interest ed me and led me to think there’s probably a better business model out there to pro vide more coordinated and uniform advice across the disciplines with one common set of professionals.
I came to know successful insurance agents in the industry by networking and going to conferences. These agents had their clients’ best interests at heart but
To embrace the Series 65 and get li censed as an investment advisor — wheth er you’re your own RIA or you’re an IAR of an existing RIA — is a no-brainer. If you
with more traditional fee-based managed money — those vehicles that most clients are used to, such as stocks, bonds, mutual funds, exchange-traded funds and so on — that is a powerful combination.
Zayed had what he called “a lightbulb mo ment” when he realized how many successful advisors had their clients’ best interests in mind but focused only on providing insurance. As an attorney who specialized in estate plan ning, Zayed had the idea to merge legal advice with financial and insurance advice to form a one-stop shop for those needing help in planning their financial future.
When you blend insurance products
Dean Zayed: I had a vision early on as a young attorney to incorporate financial services side by side with an estate plan ning law firm. Essentially, I was an estate planning attorney and tax lawyer who
Zayed: My personal practice really had the seeds of the Brookstone RIA world that came later. I built a personal practice within this one-stop-shop business model, side by side with the law firm, as an advisor who had access to the entire universe of vehicles.Itwas really all about providing the most sophisticated advice and having access to the entire universe of financial services, products and vehicles in order to provide what would be in your client’s best interest — whether that was insur ance products or managed money or bro ker-dealer products. Over the next six or seven years, I had a lot of success provid ing advice to clients. Our client retention rate was basically 100%.
In this interview with publisher Paul Feldman, Zayed describes how the vision he formed early in his legal career led to the founding of a financial planning powerhouse.
Brookstone forged strategic relation ships throughout the country with inde pendent investment advisors who affiliate with Brookstone as investment advisor representatives. Brookstone provides a large array of investment options and ve hicles to create model portfolios that span varying levels of risk. Through its network of IARs, Brookstone provides comprehen sive financial planning, including asset allocation, retirement planning, education planning and portfolio management, and offers a one-source solution for the man agement, growth and preservation of its clients’ wealth.
Paul Feldman: You started out as an attorney. How did you get into the insurance industry?
were focusing only on insurance. That was a lightbulb moment.
I love insurance products. I’ve used them very successfully. But when you in corporate the beautiful products that we like on the insurance side in the context of providing a more comprehensive solution, it’s magical. It’s no longer just the product sale. Products don’t go away. They’re just incorporated now into a broader, more comprehensive process that the client ben efits
Zayed: Even Tiger Woods had a coach. We all can use coaching. You want to continue to learn, upgrade your knowledge, upgrade your skill set, go to trainings, learn from others, network with others. Nobody ever stopsFromlearning.early on, I had this hunger for knowledge that never stopped. I never thought that I knew it all — that I could just put it on cruise control. That was never
Feldman: What do you see your most successful advisors doing to market and promote themselves?
If you’re used to selling product on the insurance side and you’ve done so successfully, the difficult transition typically is moving from a transac tion-based environment with the client to a more holistic, relationship-based approach. That’s a learning curve.
The real winner in the last couple of years, though, especially with the pan demic, has been online lead generation. We have some advisors who have found success in generating qualified leads, nurturing those leads, all from the inter net, whether it’s Google or Facebook or LinkedIn. I think that’s obviously going to be the next gen in terms of lead generation. Folks have to figure out how to get in front of their target audience using the internet. You’ve got to embrace that at some point, whether you insource it or outsource it.
12 InsuranceNewsNet Magazine » September 2022
You’re now the chief financial officer for that family. You’re their chief finan cial quarterback. They’re outsourcing all those things, not just insurance.
Zayed: You must incorporate the insur ance products in the context of provid ing a more comprehensive solution. The product sales don’t go away; they’re just incorporated now into a broader, more comprehensive solution that benefits the client. The whole picture becomes clearer when you’re an advisor and an agent and you take this more holistic approach.
Zayed: They have a burning drive to do what’s best for the client. And they have a long-term outlook toward their practice. Any decisions you make today ought to be the right decisions for your clients and your business. You forsake any short-term gratification for a lon ger-term view. You must consistently do what’s best for the client. We’re all going to get paid fairly — and hopefully handsomely — over time, but you must view this as a business with a long-term objective.Those are the advisors who don’t think of it as a short-term transaction al proposition, but now really consider themselves as business owners that happen to be in the business of finan cial services. They have all these beauti ful licenses and tools we can use to help folks. Our successful advisors morph and evolve and transform into real, true business leaders. And that, to me, is the beauty of this dynamic industry. And for those who take it seriously, who love it, who embrace it, there’s nothing bet ter than being a business owner in this industry.
And there’s so much you can do on so cial media and video. You can use webinars
me. And that’s not what we advocate with ourYouRIA.always have to push the envelope to be innovative and progressive. There’s al ways the next great idea. Part of the grati fication of this work has been to stay ahead of the curve. The world has changed in the last 20 years. The industry has changed, and people’s expectations about retire ment have changed.
Nowfrom.it’s like, wow, well, there’s a mar riage between that product and that man aged account and my 401(k) at work. The whole picture becomes more clear when you’re an advisor and an agent and you take this more holistic approach.
INTERVIEW HOW TO BUILD A BETTER BUSINESS MODEL — WITH DEAN ZAYED
Feldman: It’s a much deeper relation ship. And those one-call closes don’t seem to happen.
want to grow your practice, you want to be the most credible advisor and you want to offer the highest standard of care advisor you’ve got to be a fiduciary.
Zayed: The usual suspects in terms of marketing and lead generation are still out there. The traditional seminars. Teaching at a local college — you’re still doing a seminar, but you’re doing it as sort of the professor of the room. It’s interesting to see how many advisors have gone down the road of radio and TV successfully. Many of our advisors are very successful and very good at those types of marketing outlets.
Feldman: What do your most successful advisors have in common?
Feldman: Do agents struggle when they make that transition to becoming an Zayed:IAR?
The difficult transition typically is moving from a curve.learningThat’sapproach.relationship-basedclientenvironmenttransaction-basedwiththetoamoreholistic,a
The transition is really about how you actually talk with clients and the steps you go through, to not limit your self to insurance only or RIA only but to look at the big picture. You must put yourself in the mindset of being the quarterback for a family’s entire finan cial affairs.
Feldman: How does a new agent communicate with a client? How does a new agent build confidence? What are some strategies they can use?
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14 InsuranceNewsNet Magazine » September 2022
that generation. But for now, I’d say they’re absolutely not a threat to what we do. People want a live person — a seasoned, experienced advisor — who can sit across a table from you or even through a Zoom meeting. Most people want to be able to look you in the eye and really, really un cover what will be best for them.
I love technology. Robo is just the beau ty of technology evolving, and there will be a place for it in the industry. I think it probably will rear its head more in a com petitive way in the decades to come, and I don’t see it as a threat to us right now. We use technology in our firm. We can even call ourselves a robo in the sense that we can do a lot of the things that the robos do without calling ourselves a robo. We’re just using technology to enable kind of a smoother relationship. So the word robo and the whole idea of competitive threat really are not an issue for us.
that is sophisticated, that does not require you as the agent to become a research ana lyst or to have to build portfolios.
Feldman: The current state of the econ omy is pretty crazy. How do you view this Zayed:period?
The second most important thing is that you have the right tools that can risk man age the portfolio and avoid large losses. If
Zayed: Today’s RIA platform needs to be large and national in scope, with resources that will allow you to plug in and scale your business, take away the day-to-day noise and free you up to do what you do best. It should include an investment platform
The most important thing in this tumultuous time would be to make sure that the advisor has put the client in the most risk-appropriateportfolio.
Zayed:time?
Feldman: What should an agent or advisor consider in looking at an RIA?
and talk about any number of very inter esting and relevant topics, such as taxa tion, Social Security, required minimum distributions, rollovers and so many other things that can be part of an arsenal that you can use out there to create content to generate that interest and educate people.
Why not partner with an RIA that can take away all that day-to-day noise — op erational, paperwork, service technology? That will allow you to be the rainmaker of the firm. That’s the way I see the RIA part nership with our advisors.
Whether we have a recession or not, that’s going to happen regardless. To me, I’m focused more on the advisor experience
Feldman: I like to call it the robo-enhanced advisor, and I’m not sure that there’s anything better!
Zayed: I don’t see them as a real threat to the target audience that most of our advi sors want to work with. I do think there is a generational sort of interest when you get down to the millennials who want to go to a coffee shop and work on their cellphone and their laptop and not talk to anybody. When they open an account, they just want to do it online. I get that. There’s a need for that, and there’s going to be a demand for some robo tech activity in
within an industry that will continue to boom for 20-plus more years. We’re here. It is a great place to be.
Zayed: Twenty years ago, nobody talked about income planning on the advisory side. It was all about generic retirement planning. The trend we’ve seen now — and I think we were right about 20 years ago — is to specifically help folks with income planning that likely will incor porate some insurance products but also look at the RIA side.
INTERVIEW HOW TO BUILD A BETTER BUSINESS MODEL — WITH DEAN ZAYED
there is a recession, can you still deliver competitive returns? We’ve been very cut ting edge on that and had great results, de livering competitive returns even through recessions, but doing so while minimizing or mitigating larger losses. Those are tools that you want to think about if you’re an advisor, a fiduciary. You must have access to some of these portfolio strategies.
Feldman: What kind of trends are you seeing in portfolio design and strategies?
The industry has been and will continue to be ripe with opportunities in terms of the demographics and the move ment of money between generations. I think the economy is this thing in the background that we get caught up with. There are these big swings, but to me, that’s short-term noise. You have to see through the noise.
The most important thing would be to make sure that the advisor has put the client in the most risk-appropriate portfolio. The most important thing is that there’s not a mismatch between the client’s risk profile and how you’ve invested them.
We’ve built an entire suite, for exam ple, with our RIA, which focuses on the idea of income planning and sustainable withdrawals that you cannot outlive.
And that’s a real niche within the advi sory space.
Feldman: Do you see robo advisors as a threat or an opportunity?
Feldman: What do you recommend advisors say to their clients in this tumultuous
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AMERICANS PILING UP DEBT
AGENTS SEEK REVERSAL OF RULE ON MEDICARE ADVANTAGE CALLS
Members of Health Agents for America are being asked to sign a petition on Change.org, asking the Centers for Medicare & Medicaid Services to reverse its requirements that licensed and certified independent agents record phone calls that result in enroll ing a client into a Medicare Advantage or Medicare Part D prescription drug plan.
According to the the official journal of the fed eral government, in 2022,
What could COVID-19 do to insurers?
Other forms of insurance also could be affected. Last year, large publicly listed insurers saw an uptick in loss ratios for group disability policies. The average ratio across five large public insurers was around 73% in 2020 and then jumped almost 4 percentage points in 2021, according to figures tracked by insurance analysts at Wells Fargo.
Credit card balances helped fuel much of the surge, increasing by $46 billion be tween the first two quarters of the year. Mortgage debt also increased during the second quarter and student loan debt rose slightly during the same time period.
16 InsuranceNewsNet Magazine » September 2022 NEWSWIRES
Family leave plans that are a type of insurance that employers can purchasevoluntarily for their employees — that’s the idea behind the “Paid Family Leave Insurance Model Act,” sponsored by Minnesota State Sen. Paul Utke (R) and Arkansas State Rep.Deborah Ferguson (D). The model legislation was proposed at the National Council of Insurance Legislators’ summer meeting.
QUOTABLE
The new call recording regulations are set to take effect Oct. 1.
Andrew Flowers, a labor economist at Appcast
PROPOSAL WOULD MAKE FAMILY LEAVE A TYPE OF INSURANCE
CMS reported 39,617 “complaints to Medicare” out of 29 million enrollments. This represents only 0.0013661% of the total enrollments made during the most recent open enrollment period. Most of these complaints stemmed from mislead ing TV commercials, agents’ groups said.
DID KNOWYOU ? Source:
The policies would pay benefits after the birth of a child or adoption of a child by an employee; when a child is placed with an employee for foster care; to help an employee care for a family member who
Christopher Swift of Hartford Financial Services Group told analysts earlier this year that his company is seeing a “modest amount of claims” from long COVID-19 that could meet the definition of a long-term disability. Willis Towers Watson
We already know that more than 1 million Americans died from COVID-19 and millions more have been infected. But what we don’t know is what impact the virus will have on insurance.
has a serious health condition; or when an employee’s family member in the military is on active duty or has been called to active duty status.
You’ve seen the commercials on TV and the ads online and in print. Some celebrity or former athlete tells consumers that they can receive free groceries if they sign up for a particular Medicare Advantage plan. Or the phone rings, and the person on the other end of the line says they represent a Medicare Advantage plan that will give the consumer “additional benefits.” They may even recommend a plan that is not available in the call recipient’s area.
Life insurance companies already provide paid medical leave benefits through short-term disability policies to more than 47% of full-time U.S. workers. The NCOIL proposal would es tablish new laws in the states that permit companies to offer insurance plans cover ing family leave.
Over the past year, credit card debt has jumped by $100 billion, or 13%, the biggest per centage increase in more than 20 years. Despite the increase in credit card debt, Americans continue to apply for plastic, the New York Fed said. Americans opened 233 million new credit card accounts
We have a paradox in our economy because of signalsconflicting.
Every U.S. state except Delaware experienced wildfires in 2021.
U.S. household debt hit a new high, surpassing the $16 trillion mark during the second quarter, the New York Federal Reserve reported.
In particular, questions remain about the impact of COVID-19 on health and dis ability insurance. Brian Schneider, senior director for insurance at Fitch Ratings, told The Wall Street Journal that an estimated 10% of all workers’ compensation claims in 2020 were related to COVID-19.
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COVER STORY 18 InsuranceNewsNet Magazine » September 2022
Even as Americans voice estate planning concerns, most fail to act.
September 2022 » InsuranceNewsNet Magazine 19 LIFE INSURANCE: THE BEDROCK OF ESTATE PLANNING COVER STORY Life insurance: The bedrock of estate planning
BY JOHN HILTON
planning community has helped me un derstand that while there is urgency in placing life insurance because it’s import ant, it’s also important to know where life insurance fits in a financial plan,” he ex plained. “Because when you are working with the family and doing their financial plan, they see the recommendation for the insurance and they know where it fits, they know why it makes sense.”
For the year, life insurance activity remained up nearly 3% through June, re ported MIB, a consortium that provides data solutions to support the industry.
“I’ve never seen people take their life insurance as seriously as they have since this pandemic started,” he said.
“Life insurance is so versatile that the same products can protect a young couple, help pay off debt or take care of a mortgage, or make sure that a college
Total U.S. life insurance new annual ized premium increased 17% in the first quarter of 2022, representing the fifth consecutive quarter of double-digit pre mium growth, according to LIMRA’s First Quarter 2022 U.S. Retail Life Insurance Sales
Yet, the data shows that most do not have an estate plan in place. And trends are getting worse. Just 32% of Americans have a will, a 2022 Caring.com survey found.
After all, advisors have plenty of evi dence that life insurance soared in pop ularity during the COVID-19 pandemic.
Add it up and it seems Americans are lost when it comes to estate planning. The answer might be as easy as starting with a good life insurance policy.
Estate planning needs
“And life insurance is still one of the best ways to provide capital and provide liquidity for that family to pay state taxes, federal estate taxes, gift taxes, whatever it may be, as that estate is passed on to the next generation.”
Survey data does not lie, and much of it shows that Americans are woefully un prepared when it comes to estate plans. Likewise, retirement planning in general is lax. Advisors say life insurance today is a very versatile product that can help cli ents achieve many different goals.
Strong data
Appel
possibilities are greater.
Bucklee
“NearlySurvey.half of life insurers reported premium gains in the first quarter, but the majority of the growth came from the top 10 carriers,” said John Carroll, senior vice president, head of insurance and annuities, LIMRA and LOMA. “Nine of the top 10 reported double-digit growth. Combined, their sales increased 32% from last year.”
COVER STORY LIFE INSURANCE: THE BEDROCK OF ESTATE PLANNING 20 InsuranceNewsNet Magazine » September 2022
The story of the life insurance market as 2022 heads into the homestretch is one of possibilities. Sure, sales are good, but the
“Beingclients.affiliated with the financial
summer. Applications for individual life insurance slipped 6% in June 2022 over June 2021, according to MIB Group’s U.S. application activity report.
However, signs of slippage appeared as the third quarter pushed deep into the
Chris Acker heads CB Acker Associates Insurance Services in Redwood City, Calif., and is president of the Silicon Valley chapter of the Financial Planning Association. Acker leverages his con nections in the advisor community to provide a variety of insurance plans to upscale
Life insurance could help fill the void in estate planning. Likewise, advisors say life products today are versatile enough to help with many needs, such as tax-favored planning and long-term care.
Although the core value of life insurance is family protection, life insurance has evolved into a valuable tool for estate and retirement planning. Interest among clients in those uses is very strong, advisors say.
The majority of Americans (77%) say that estate planning is important for everyone, regardless of wealth level, according to a 2021 Edward Jones survey.
Douglas
education is there for a child,” Appel said, “and protect that established family who have brick-and-mortar assets and need liquidity on debt.
David Appel is managing partner at Appel Insurance Advisors in Newton, Mass., and has 28 years in the business as a life insurance-focused planner.
The data reveals clues about which life insurance strategies advisors likely are using. Among the age 71 and older set, life insurance activity climbed 5.4% in June. Those sales certainly reflect the use of life insurance for estate planning, longterm care arrangements or tax sheltered retirement plans, experts say.
Andrew Bucklee is head of life and
Carroll
Acker
September 2022 » InsuranceNewsNet Magazine 21 THE BEDROCK OF ESTATE PLANNING COVER STORY DISCOVER... The ExceptionalAnnuity100-30CarrierBalanceSheetTomGober,CFE,ForensicAccountant&FormerStateInsuranceRegulatorGregDuPont,Esq.
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High net worth clients must be wary of persistent efforts by the Biden adminis tration to raise taxes on the wealthy. The proposal resurfaced again in the adminis tration’s 2023 budget.
many people know that life insurance provides valuable death ben efit protection used for estate planning, Bucklee acknowledged that they may not understand the living benefits avail able through the product, especially how those benefits can be advantageous from
“A properly designed life insurance policy can offer benefits as a complement to traditional qualified retirement vehi cles,” he said. “With no income limits, tax-advantaged cash-value growth po tential and the potential for supplemen tal retirement cash flow, there are many reasons to consider life insurance when planning for retirement.”
"The 100-30 annuity issuer is the most traditional insurance company I've ever reviewed. Their balance sheet supports the promises they make to their policyholders, and it's also why they have an exceptional TSR Ratio of just 25%. I would love for other carriers to model their balance sheet management behaviors on theirs."
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As of press deadline, Sen. Joe Manchin, D-W.Va., had struck a deal with Democratic leadership on a bill that aims
As 2022 rolls into the homestretch , insurers are trying to keep the momen tum high by emphasizing the versatil ity and family protections life insurance offers. Those uses go well beyond estate and retirement planning. Tax planning, forAlthoughstarters.
Bucklee said. “Financial professionals can play an important role in developing goals-based estate planning strategies on behalf of clients and helping them un derstand the flexibility that survivorship products bring to the process.”
The pandemic gave insurers a double boost. One, the entire industry was forced to adopt long-delayed technology that made insurance selling faster and easier. Americans can now get a life insurance policy in a matter of days.
It eliminates the risk of the carrier changing the deal down the road by increasing rider fees (because there are none) and our client's appreciate the no fee income benefit. Plus, the carrier contractually cannot reduce the participation rate over the years because of their 100% Participation Rate guarantee (no caps or spreads)."
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Today, more Americans are worried about providing their families with a strong financial safety net so the impact of external variables, like the pandemic or the economy, can be mitigated. — Jennifer Douglas
friends and family members become se verely sick from COVID-19 reported high er levels of stress and financial concerns,” noted Jennifer Douglas, research director at LIMRA. “Today, more Americans are worried about providing their families with a strong financial safety net so the impact of external variables, like the pan demic or the economy, can be mitigated.”
Second, it jolted consumers with a dose of brutal reality. According to LIMRA, 31% of consumers said they were more likely to buy life insurance due to the pan demic.“Four in 10 people who witnessed their
“A strong estate plan can help clients solidify their financial future and take control of the assets they worked hard to attain,” Bucklee said. “Combining a trust with life insurance not only offers clients protection for their family, business and legacy, it also helps them control how their legacy is distributed.”
a tax perspective.
A good financial professional can help identify the right insurance solution for specific needs, Bucklee noted. In addition to trust-owned life insurance, second-todie — or survivorship insurance — can be used for estate planning or to pass along death benefits to children or grandchil dren, he “Whenexplained.itcomes to estate planning and transferring wealth, there can be many considerations, such as minimizing the impact of estate taxes, making a charita ble gift, or ensuring business continuity,”
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"The 100-30 annuity is the ideal product to replace bonds — it's better than bonds This fixed indexed annuity offers a better diversification alternative to the stock market than fixed income securities do today. I've dedicated my career to taking care of my clients, always working in their best interest only. In the economic, political and societal environment we face today I am very happy our firm has access to this unique product for the benefit of our clients."
It must be the balance sheet promise first but I do also love that the indexed components are the S&P 500 (SPY) and the Bond Aggregate (AGG) plus this very unique index includes the accumulated dividends — which add up over time."
“It’s not a sexy investment they’re used
Carried interest refers to a long-stand ing Wall Street tax break that let many private equity and hedge fund financiers pay the lower capital gains tax rate on much of their income, instead of the high er income tax rate paid by wage-earners.
Appel likes to show private equity or venture capital people the internal rates of return with a good life insurance pol icy, and what they can get from a growth perspective inside, or upon death.
Sometimes advisors catch a big case, where a big life insurance policy can rescue a family from a major tax heartache. Appel recalled a husband-and-wife client, referred by an advisor, who had combined assets totaling $40 million, with about $25 mil lion of that tied up in annuities and quali fied retirement plans.
Learn More About This CategoryLeading Product And Its
September 2022 » InsuranceNewsNet Magazine 23 THE BEDROCK OF ESTATE PLANNING COVER STORY INTRODUCING... TheExceptionalAnnuity100-30PerformanceRaoGaruda,40-YearMDRTTopofTheTableAdvisorToddAllen,WealthManager
to investing in, but it’s a very solid income investment,” he said. “And that’s why even billionaires and people with hundreds of millions of dollars are still looking to life insurance.”Inothertax news, Biden has supported returning the federal estate and gift taxes to pre-Trump levels. While not part of the administration’s current plans, that does not mean they are going away.
to close the so-called carried interest loophole, a longtime goal of Democrats.
“They had no idea,” Appel said. “They never really considered the income tax and how so much of their estate, $25 mil lion out of the $40 million, had never been taxed from an income tax standpoint. And the question is, ‘Do you want to pay the tax now and buy some life insurance to be able to offset this and re-create this estate for the family?’
"I take my fiduciary duty to heart. I approach my selection of life insurance and annuity carriers with an equal, if not greater, level of diligence than my Assets Under Management process because of the very long term nature of the promises made to my clients by these carriers.
www.100-30Annuity.comPerformanceExceptional
I also value the economics of the product with the 100% participation guarantee and cumulative withdrawal provisions to 30% but it's Tom Gober's TSR Ratio of 25% that is most important to me.
The estimated federal and state estate taxes, plus income taxes on the qualified money, were going to shrink that estate by 62%, Appel’s analysis found.
“Because if you don’t pay the tax, the kids are going to pay the tax. Someone’s paying the tax. It’s just a matter of when andIt’show.”always a good idea to advise clients to have investment “buckets,” Appel said, and not all in qualified accounts.
Currently, the unified federal estate and gift tax lifetime exemption is at a historically high $12.06 million. Unless Congress acts to change the law, the cur rent exemption amounts will sunset on Dec. 31, 2025. That means the exemption will revert to 2017 amounts of $5 million (adjusted for inflation).
Eliminating the loophole would raise $14 billion, Democrats say. Biden has remained steadfast on fulfilling his cam paign promise to raise taxes on families making over $400,000 annually.
‘They had no idea’
That means opportunity for financial planners to place tax-sheltering strat egies within retirement and financial planning. The end of 2021 saw a flurry of tax-favored life insurance sales, and 2022 could see a repeat of that business uptick.
The IRS has stated that there will be no “clawback” for gifts made under the increased estate and gift tax lifetime exemption. In other words, the IRS will not retroactively assess gift tax on any lifetime gifts in excess of the sunset ex emptionTherefore,amount.this offers a unique time for taxpayers to maximize the value of the current lifetime exemption before it’s po tentially reduced. Under the current law,
They never really considered the income tax and how so much of their estate, $25 million out of the $40 million, had never been taxed from an income tax standpoint. And the question is, “Do you want to pay the tax now and buy some life insurance to be able to offset this and re-create this estate for the family?” — David Appel
Physical
Acker sees it from the client referrals he gets from advisors. He reports six ac tive claims for long-term care services at the moment, and about a dozen total. It is a growing business, Acker said, with the riders delivering a lot of value to those claimants.
Long-term care
MentalFinancesHealth
Personal Relationships
According to LIMRA’s latest Sentiment rating when
if no action is taken by the end of 2025, a family could be on the hook for an es timated $4.6 million in additional estate taxes.That opens the door for a large life in surance policy to offset that bill.
But advisors say enthusiasm for LTCi products definitely is growing.
Health
of the American Association of LongTerm Care Insurance, considers it a onetime bump related to Washington state requiring residents to get LTCi or face a tax for a new state benefit.
Long-term care is climbing the list of retirement concerns, according to a recent study by LIMRA, with Americans unsure how they will pay for it. Just 12% of Americans said they were worried about LTC in 2019, a figure that grew to 37% in 2021. According to the study, six in 10 Americans would consider a com bination life insurance policy — a life insurance policy with a long-term care component.Insurerssaw a substantial increase in long-term care insurance policies sold in 2021, but Jesse Slome, executive director
COVER STORY THE BEDROCK OF ESTATE PLANNING www.insurancenewsnet.com/topics/monthly-focus For more information about sponsoring the monthly focus please contact a National Account Director — 717-441-9357 MONTHLYDIGITALFCUS Be sure to check out our NEW MONTHLY FOCUS section, highlighted on our home-page. The Monthly Focus topic for SEPTEMBER 2022 is: LIFE INSURANCE
“A lot of people say, ‘I’m going to self-in sure for that,’” Acker said. “And you can self-insure. But if you think you’re going to
U.S. underwriters added 153,687 new lives to their books in 2021, compared with roughly 57,200 during the previous year, according to an S&P Global review of annual regulatory statements.
Consumer
presented with a list of things that are Nearly half of Americans (49%) see family as more Very important More important compared with pre-pandemic Family
• 109.9% Solvency Ratio.
issues to the age of 90, offers a no cost ADL rider with home health care benefits, a no cost income benefit, the lowest net surrender fees of any product I've analyzed in years, extraordinary liquidity and a 130-year-old company that contractually guarantees that the client's money is going to work with the highest guaranteed option budget I've ever seen, so our clients have real and meaningful upside potential.
"The 100-30 annuity offers a real cash value bonus, many times this helps us with a client who suffered market losses or a client buried in an annuity with high fees or long surrender
Itperiods.also
• Founded in 1892, a 130-year history.
Learn More About This CategoryLeading Product And Its Extraordinary Features & www.100-30Annuity.comFactsSeptember 2022 » InsuranceNewsNet Magazine 25 THE BEDROCK OF ESTATE PLANNING COVER STORY
For many of my retired and soon to be retired clients the 100-30 annuity is a great fit."
• Tom Gober's Lowest TSR Ratio of 25%!
Americans might have good intentions about getting life insurance coverage,
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Another big selling point for LTCi riders is that many of the policies are interest-rate sensitive. So when interest rates are rising — as they have several times this year — the premiums go down. OneAmerica and Nationwide are two companies that re duced premiums this summer.
Beyond the tax issues, the general economic malaise can make life insurance a tough sale. While the pandemic made Americans very aware of the threats to family security and general health, the ensuing economic downturn sapped pocketbooks.
Appel noted, but the funds might not sup port it. The Dow Jones being down double digits so far in 2022 only adds another variable to that complicated equation.
It often adds up to a good news, bad news situation for advisors trying to gauge the public appetite, Appel concluded.
“Sometimes people will think that when the market’s flying, they might not need insurance, or it’s easy to pay premi ums,” he added. “But as the market is go ing down, the premiums aren’t as easy to come by, but they also feel not as wealthy as they did before the market drop.” may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.
Survey, 82% of consumers give family a high priorities for many people. important today than pre-pandemic. 82% 49% 75% 51% 73% 52% 72% 48% 69% 40%
Extraordinary Insurance Company Facts
• A 100% Debt-FREE Company — NO Leverage / Financial Engineered Balance Sheet.
need help getting out of a chair, help get ting out of a bathtub — whether by grab bars or actually somebody right there — then you’re going to be eligible for a bene fit. You don’t have to be flat on your back and basically comatose to collect benefits.”
20beatsbusinessHiltonSeniorInsuranceNewsNetEditorJohnhascoveredandotherinmorethanyearsofdailyjournalism. John
Tough economic times
In this year’s Life Insurance Awareness Month Thought Leadership Series, leaders throughout the industry offer per spective on the trending sales, strategies and products dominat ing an ever-changing life insurance marketplace.
YOUR ANNUAL “AWARENESS” BOOSTER
How Allianz Can Help Financial Professionals Understand and Better Serve the BusinessOwner Community with David R. Foster of Allianz Life PAGE 28
INSIDE
PAGE 30
Finding Focus DistractionsAmid
with Mike Martini of Crump Life Insurance Services
Evaluating Whole Life Products in TimesUncertain with Mark Scalercio of OneAmerica
Five Reasons Why Gradient Is the Swiss Army Knife for Life Insurance and More with Brian Lucius of Gradient Financial Group PAGE 27
SPECIAL SPONSORED SECTION
PAGE 31
Using Gradient’s online information gathering tool eliminates duplicative work and ensures you don’t miss important questions in client conversations. Gradient’s proprietary Virtual Advisor® technology and the Generational Vault® for storing critical documents are tools designed to meet the needs of today’s sophisticated advisor practice.
2. Implementation
5. Focus on Creating Happy Clients
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available for advisors and actually being able to help them implement it in their practice,” says Lucius.
The Life Insurance Issue • Special Sponsored Section September 2022 » InsuranceNewsNet Magazine 27
oday, financial professionals offer more to their clients than ever before. The business is less about products and more about relationships and referrals. That’s why having a brand is a must. Consumers want substance — you have to prove you are well-versed in your discipline through TV, radio, podcasts and more. They want to know your strategy for the business if one day you can’t show up to manage their retirement plan.
Today, you must differentiate your brand, which means having your marketing dialed in. Advisors who understand this are seeing their practices grow as their brands become more recognizable in their communities.
To learn more about how Gradient can help you build your business through life insurance, visit the website IMOForTodaysAdvisor.com.
While some IMOs offer multiple tools and approaches, they leave the burden of understanding how to use them successfully in a financial practice to the financial professional.That’swhy Gradient has developed systems to streamline your practice, allowing you to easily achieve repeatable success and scale your business.
3. Technology
“There’s a big difference between making something
You may have heard enhanced planning referred to as estate planning, tax planning or advanced planning, but those terms are often associated with high-net-worth individuals. Gradient believes “enhanced planning” better describes what many financial professionals and their clients are facing — their legacy.
1. Life Insurance through Enhanced Planning
Gradient has a track record of implementing systems to connect financial professionals and their clients to a confident financial future, including assets under management; creating a recurring revenue stream for financial professionals; and technology infused with industry knowledge, strategy and processes.
“Buying life insurance is an emotional purchase. It’s the conversations around what would happen to your kids if you didn’t wake up tomorrow,” says Brian Lucius, Gradient’s Chief Distribution Officer. “What would happen to your family and where would your assets go? Most people don’t have a plan in place to addressGradientthis.” recently launched a comprehensive training program to educate advisors on the importance of bringing enhanced planning into the holistic financial planning process. The enhanced planning program works in tandem with Gradient’s Succession Planning University, a two-and-ahalf-day live training event in Minnesota, which focuses exclusively on the advisor’s business.
Gradient has an innovative in-house creative design firm that focuses on results. “Our team equips financial professionals of all shapes, sizes and stages to ensure you stand out in a crowded financial landscape,” says Lucius. “Whether you want to use our proven marketing material or develop your own, we have the time, talent and resources to make sure your brand is taking advantage of every opportunity.”
4. Marketing and Branding
Life insurance is a major component of enhanced planning and meets a variety of needs. Because many people don’t believe they need life insurance, it’s best to start a conversation about life insurance by discussing the problems you (and your clients) want to solve and what you (and your clients) want to leave as a legacy.
“As producers know, the long-term success of their business is really a happy client,” says Lucius. “Happy clients bring more assets and referrals. Happy clients stay with you. So, if you have the tools necessary to make their retirement what they want it to be, you end up with a more solid practice.”
Technology is another key component of Gradient’s platform, because it helps build an efficient, easy and successful process.
After nearly 20 years in the industry, Gradient has seen the challenges advisors face in accomplishing their goals and found ways to help advisors overcome those challenges. Here are five ways Gradient uniquely serves advisors, and why it might be the Swiss Army knife you need for your financial and life insurance practice:
Lucius says, “Technology makes you more efficient and it helps ensure advisors don’t miss critical steps in the process.”
“Our world today is about convenience. You must have a practice that is easy to access, easy to use, and facilitates increased communication with your clients,” explains Lucius.
Five Reasons Why Gradient Is the Swiss Army Knife for Life Insurance and More
INN: What else did you find regarding attracting and retaining key employees?
In this year’s interview, you’ll hear about key findings of the survey and how you can apply them in your financial practice.
o enable financial professionals in providing much-needed strategies for small-business owner clients, Allianz Life Insurance Company of North America (Allianz) Advanced Markets commissioned a survey* of small-business owners to uncover the unique challenges they face.
The Life Insurance Issue • Special Sponsored Section 28 InsuranceNewsNet Magazine » September 2022
INN: What were some of the top concerns expressed?
The need for this information was recognized in response to last year’s interview with David R. Foster, JD, AEP, CLU, ChFC, CAP, FLMI, Advanced Markets attorney and senior director of Advanced Markets at Allianz. In that interview, he expressed the importance of understanding the challenges of smallbusiness owners across a variety of industries in order for financial professionals to bring new strategies to the table to generate new opportunities.
DF: A particularly interesting finding was 39% of small-tomidsize businesses said they were utilizing grants of stock or nonqualified stock options or a similar plan to help retain key
79% of the respondents had a concern about federal or state taxes levied at death. This is surprising because with a little planning, a married couple can pass on just over $24 million free of any federal and state taxes in 2022. It’s possible these concerns stem from federal and state exemptions scheduled to be cut in half in 2026. This is clearly something financial professionals need to be addressing with their business owner clients.
INN: Dave, can you share what inspired the small-business owner survey?
INN: In this survey, participants were also asked about estate planning. What did responses on that topic reveal?
DF: The majority (58%) of small-business owners expect to pass on their business to family members. In my experience, the larger the business gets in size, the less likely that is. Of those planning to pass their business on to a family member, 77% expressed concern about doing so while retaining familyWheneverharmony.you pass a business on to a spouse or children, there’s the potential for family discord. What’s encouraging is that this is a top-of-mind concern and something business owners want assistance with. It also reinforces that estate planning strategies are more than saving on taxes, it’s about the emotional and relational aspects of passing on a business to Surprisingly,family.
employees, which is high for small businesses. When a smallbusiness owner gives away stock, they’re giving away ownership rights. That brings a host of additional legal responsibilities, and it provides minority shareholders with many additional rights — something not all business owners understand. It has the potential to cause more problems than benefits.
Related to the business itself, 77% were concerned about recruiting and losing key employees. And 76% were concerned about successfully transferring their business to the next generation. Based on those findings, key employee compensation and business succession planning strategies are relevant areas of planning they’re seeking assistance with in 2022.
DF: Top concerns fell into two categories — economic and market conditions or concerns related to the business itself. Of small-business owners surveyed, 85% were concerned about recession and 81% were concerned about both supply chain delays and increasing interest rates.
The survey revealed concerns in three areas: key employee compensation strategies, business succession planning strategies, and estate planning strategies.
This survey was developed to gather this information about small-business owners and then pass it on to financial professionals.
How Allianz Can Help Financial Professionals Understand and Better Serve the Business-Owner Community
INN: What did the survey reveal regarding succession planning for small-business owners?
DF: One interesting finding was that 93% of business owners who plan to sell their business were concerned about finding a buyer for the business upon retirement, which means they own an asset they can’t liquidate for the amount they need or when they need it. That presents a huge problem for retirement. In fact, another statistic we found was that over three-quarters of all small-business owners, not just the ones expecting to sell to a third party, expressed concern that most of their wealth was tied up in the business.
Also, 75% of small-business owners said their business succession strategies were impacted by the pandemic. Of those impacted, whether they delayed or accelerated their plan to transfer ownership varied by industry. Financial professionals working with small-business owners need to check in to see how plans have changed and what impact that may have on a client’s overall financial strategy.
INN: What are the solutions Allianz offers that uniquely meet business owner client needs?
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DF: To help business owner clients achieve their goals, you have to understand their world. What are their biggest concerns? What are they currently doing to address those concerns? What are their financial and nonfinancial goals?
For example, on the succession planning side, that could include grantor retained annuity trusts, Intentionally Defective Grantor Trusts, buy-sell agreements, etc.
Products are issued by Allianz Life Insurance Company of North America, PO Box 59060, Minneapolis, MN 55459-0060.
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.
These are a few ways the product and plan combined can accomplish some of their goals.
Beyond available tools, like the survey, financial professionals can get access to marketing pieces related to the topics we’ve discussed. Plus, we have a team prepared to walk through cases. The first place to start is collecting data and listening for goals. From there, if someone is new to the business owner world, we can guide them through strategies that work but also let them know what might have been missed.
INN: This has all been very enlightening. Thank you for sharing these findings, Dave. What else would you like to tell our readers about working with small-business owner clients?
DF: Small-business owners, and their families, rely heavily on their businesses to provide financial security both before and after retirement. Prudent financial professionals realize the importance in helping them plan accordingly. But they must also be aware of the variances between industries, so they can provide the right solutions to meet the specific needs of their clients. By understanding the challenges revealed in the survey, financial professionals can better equip themselves to serve this community well.
Allianz Life Insurance Company of North America does not provide financial planning Producersservices.shouldencourage their clients to work with qualified tax advisors or attorneys when considering the various planning strategies.
DF: In a lot of ways, we’re on the right path, but there’s always room to grow. When you look at the combination of concerns around wealth being concentrated in one asset (their business) as well as concerns about a downturn in the economy, indexed annuity and life insurance products meet the needs revealed.
Finally, the pandemic changed what key employees expect from their employer. We can help address that need by building appropriate products and providing key employee compensation strategies to the employer community.
Financial professionals also need to be aware of the variances between industries in order to serve the smallbusiness owner community well. Our survey found substantial differences in terms of what they’re concerned about and what their goals are. Financial professionals who understand the unique trends, issues and goals in the various industries (e.g., construction, technology, manufacturing, agriculture, etc.) will have a competitive advantage over those that do not.
INN: How would financial professionals approach their business owner clients based on the survey findings?
DF: The survey has a tremendous amount of data points we didn’t cover here. So it’s important to get the fact sheet we created, so they are armed with more insights.
For financial professional use only — not for use with the public. Product and feature availability may vary by state and broker/dealer.
When transferring ownership of a business, family conflict goes up substantially if all children receive equal ownership in the family business, especially when some are active in the business and others aren’t. To prevent clashes over business decisions, one potential solution is to pass the business on to active family members and equalize the others with life insurance.Asforthe expressed desire to recruit key employees, business owners may want to consider strategies such as key employee bonus plans or split dollar plans, nonqualified deferred compensation plans, or phantom stock and stock appreciation rights plans, all funded with an employer-owed fixed indexed universal life (FIUL) policy.
INN: From a carrier’s perspective, what were some of your key takeaways? Did what you find change Allianz’s approach at all?
Fixed index universal life insurance requires qualification through health and financial underwriting.
The Life Insurance Issue • Special Sponsored Section September 2022 » InsuranceNewsNet Magazine 29
Also important to note is that 41% of small-business owners plan to transfer their business within the next nine years. From a carrier perspective, we understand that a successful transition of a business requires planning. Therefore, we need to be prepared to assist financial professionals in this area. That preparation could come in the form of product development or advanced markets solutions.
DF: With this survey, we wanted to know business owner concerns, trends, and goals so we could come up with not just products but also strategies — that’s our focus in advanced markets.
*Allianz Life conducted an online survey, the 2022 Business Owners Survey April 20-May 9, 2022, with 516 small-to-midsize business owners. Respondents must have owned a business where they were actively engaged in day-to-day operations, employed at least five people, and had revenue of $500K+ over the prior 12 months.
DF: Business owner clients are unique, so the same tried-andtrue solutions may not be the answer. Instead, listen twice as much as you talk when working with a business owner. They are passionate about their businesses. They also appreciate working with teams. Find a local network and build a team rather than trying to do it all yourself.
Over the coming months, we plan to communicate even more specific data points through articles, etc., that will be available on our site. And stay tuned for future surveys.
INN: What’s the next step for financial professionals who work with business owner clients?
To get access to the key findings from the 2022 Business Owners Survey, visit AllianzAdvancedMarkets.com or call the Advanced Sales and Practice Platform Team at 888.900.1530.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.
In addition to the challenges and distractions of the current economy, financial professionals are also navigating an overwhelming abundance of product options. While the continued development of life insurance, annuities, longterm care and disability products is good news for financial professionals and their clients, becoming an expert on all of them is impossible. And along with the plethora of products comes a responsibility to keep up with an ever-changing regulatory environment.
To explore timely and relevant insurance and retirement planning topics as well as get market updates, sales strategies, and information that impacts your financial practice and clients, tune in to the Crump Insights podcast at CrumpPodcast.com.
Mike Martini, president of Crump Life Insurance Services, explains how the company is helping turn the current challenges financial professionals face into opportunities to help protect more people.
Finding Focus Amid Distractions
Building the Future
are our interactions internally and with carrier colleagues and financial professionals. Trust, comfort and confidence are the three legs of the stool that support all successful relationships,” says Martini. “It’s especially important when clients buy a life insurance policy. They need to know that at the end of the day, carriers can deliver on the promise they’ve made. That doesn’t happen without trust, comfort and confidence.”
Poised for growth, the industry has the opportunity to reach more people with the benefits of life insurance. “Americans are still significantly underinsured in all areas. Through improved technology, broader consumer access to products, accelerated underwriting, instant issue life insurance, and more, we have the potential to change that,” says Martini. “Additionally, there are increased opportunities for those underrepresented in financial services, including women andCrumpminorities.”iscommitted to recruiting a new generation of life insurance specialists to this exciting and dynamic industry as well as working with experienced fiduciaries — bankers, broker-dealers and financial professionals who put the focus on a plan rather than a specific product.
or financial professionals, as for almost everyone, the past couple of years have been fraught with challenges. In our industry, it’s meant learning to thrive in a virtual or a hybrid world and adapting strategies to a changing market, as well as adjusting to the increased demand for products, like life insurance and annuities, that provide protection and guarantees.
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Celebrating his 20th anniversary with Crump in September, Martini says he’s excited to be part of a strong culture of integrity, teamwork and caring. Crump has a focus on diversity, equity and inclusion, he added, as well as a commitment to continued growth, both organically and through acquisitions.
That’s why Martini encourages financial professionals to put their focus back on what really matters: helping clients create legacies and provide protection for their families.
“We’ve made a concerted effort to help lift this burden for financial professionals. With our product and market expertise, in addition to being a source of guidance, support and consolidated product options, we strive to be a one-stop shop,” says Martini. “We’ve also learned we need to meet financial professionals where they are — whether they want to do business with us in person, online or through a mobile app.”
On a recent episode of the Crump Insights podcast titled “Trust, Comfort and Confidence in a Challenging Market,” Martini explained why these values are at the center of everything. “Just like life insurance is said to be a ‘relationship business,’ so too
Concentrating on What Really Matters
“In today’s environment,” Martini says, “the biggest challenge financial professionals face is market distraction. Whether it’s the war in Ukraine, rising interest rates, difficult financial markets and more — it can be hard to know what to address with clients first.”
Trust, Comfort and Confidence in a Challenging Market
“If we’ve learned nothing else from the pandemic, it’s that we have to plan for an uncertain future,” says Martini. “And at the end of the day, our job is to deliver on the promise provided by life insurance.”
In honor of Life Insurance Awareness Month and staying focused on what matters in this era of distraction, Crump will be announcing its own Life Happens scholar and sponsoring a student in need, chosen by its employees. Martini says, “This is just one of the many ways we demonstrate we believe in what we do — and in what you do.”
CLIS22-11093-A The Life Insurance Issue • Special Sponsored Section 30 InsuranceNewsNet Magazine » September 2022
“This is an industry with a cause. If taking care of people, their families and their businesses is in your DNA, you’re in the right place. If you want to partner with a company with a cause, Crump and parent Truist — whose purpose is to inspire and build better lives and communities — may be a good fit for you,” says Martini.
A ‘One-Stop Shop’ for Curing Overwhelm
Change is constant. Sometimes, financial institutions will experience increased government scrutiny and regulation during times of economic downturns, resulting in some required modifications to products. And sometimes, carriers will take this opportunity to improve business models and increase efficiencies, which may result in mergers or acquisitions. Whether the changes seen in products are a result of regulation, market fluctuation or simply innovation, one certainty is that there will always be continued changes to products and carriers.
That’s why with so much flexibility in the marketplace, it’s important to remember that shopping insurance products is never like comparing apples to apples. No matter the fine print of features or riders, these high-level considerations are great reminders of the fluidity and importance of financial service professionals.
It may be overwhelming to sift through the fine print of whole life products and features as you soothe your customers’ concerns. There is always value in evaluating flexible tax preferred whole life insurance policies that can address individual needs. Whole life policies can offer lifetime coverage at a guaranteed cost while potentially receiving non-guaranteed dividends and providing access to the policy’s cash value. Whole life has the benefit of these guarantees, which provide certainty during uncertain markets. As you evaluate the features of whole life products during uncertain financial times, keep these considerations in mind.
Choosing a carrier with flexible, consistent rider options will allow you to adapt to the ever-changing needs of your clients. For example, perhaps you can add riders at issue
OneAmerica® is the marketing name for the companies of OneAmerica. Guarantees are subject to the claims paying ability of the issuing insurance company. Dividends are not guaranteed, past performance is not indicative of future results, and actual results may vary. Riders may be optional and carry an additional cost.
that make available the opportunity to increase/decrease premiums once the markets become more stable.
Life
The long-term nature and gradual portfolio shifts that occur in whole life products mean it will likely be some time before whole life products experience any benefit from increasing interest rates. Therefore, looking at long-term performance could be a better indicator of a quality product or carrier.
Look for long-term financial strength. Your clients trust you to make a recommendation that can withstand the test of time — 30, 40 to 50+ years from now. When considering a carrier, look for one with a long and strong history, as well as one with consistently high financial ratings from third-party ratings agencies.
September 2022 » InsuranceNewsNet Magazine 31
The Insurance Special Sponsored Section
Seek Flexibility. Today’s current economic conditions tend to impact each customer differently. Identify products that have continued to offer robust, customizable options. Rider flexibility allows you to tailor solutions that can meet a variety of funding, cost and coverage flexibility requirements.
During turbulent times of economic uncertainty, find and work with an advocate that understands your short-term and long-term goals. And remember- the market will continue to fluctuate over time. Your clients’ need for dependable protection when they need it most will not.
Evaluating Whole Life Products in Uncertain Times
Mark Scalercio is Senior Vice President, Head of Distribution, Individual Life & Financial Services at OneAmerica. In this role, he leads sales and distribution across all channels and aligns sales teams and distribution partners with innovative growth strategies.
Issue •
Your clients trust you. Maintain their trust by connecting them with a carrier that is committed to a relationship building strategy with you and your clients.
When 2022 began, the industry was in the process of adjusting to the changes made to IRC Section 7702 Regulations. As new policies began to emerge, another element of concern began brewing- an unsettling economic environment. Fluctuating interest rates have begun to factor into product refreshes, revamps and adjustments. And while the industry cheers higher interest rates, other factors may serve to influence consumer buying habits. Concerns about inflation, continued global supply chain disorder, geopolitical instability, unstable oil prices and shifts in employment could result in market uncertainty and reduced demand for many products, including insurance products.
Rely on relationships. Whole life products can be complex and discussing options in person can be incredibly helpful, especially when discussing innovative features that can flex with the market or tax implications in your region. Your clients don’t expect you to have a crystal ball; however, a carrier who offers whole life as a core product could mean you’ll receive the care, attention, and guidance you need for the life of the product.
“All the Colors is a phrase a friend and I would say to each other,” she explained. “I went to visit her one weekend when she was going through a difficult time, and I told her she looked gray. After shop ping, dancing, eating, talking, crying and laughing together for a few days, at the end, she was vibrant again — she had all her colors back!”
Somehow, that wasn’t enough for Yanez.
the Fıeld A Visit With Agents of Change 32 InsuranceNewsNet Magazine » September 2022
After working for three years as a reg istered investment advisor. Yanez realized that the business was structured primarily to serve those who had the means and not those — often minorities — who did not.
It’s one of the driving forces behind her company, All the Colors.
She said her target audience for All the Colors is “people who have anxiety about their finances, are not sure how to estab lish their own financial plan, and who may have tried — and failed — to get on the right financial track.” People who pre viously turned gray when they thought about monetary issues.
Yanez arrived at a career in the financial services industry after a 10-year journey. She worked in social services at a non profit, performed population projections at a government-contracted agency, and did business analysis at a manufacturing company before becoming a Certified Financial Planner. Her compassion, back ground as a Quaker, and urge to make the world a better place then influenced and altered her journey once more.
By John Forcucci
Live life in color
“I tell clients that all of their money ‘stuff’ is welcome when they’re at All the Colors — from their fear of never having enough to shame about feeling greedy, de spair at capitalism’s extractive nature, joy at being able to care for themselves, gen erosity when sharing with others, surprise with bills or surprise income,” she said. “In short, all of their feelings and experiences with money are welcome. I also like that the name All the Colors is very inclusive.”
Yanez wants to see people live vibrantly instead of turning gray when they think about their finances.
The organization offers a six-month financial empowerment program called
“I loved my clients,” she said, “but my bigger end goal was to help people who are not being served.” With that in mind, Diana took up the path of entrepreneur and founded All the Colors.
Diana
Diana Yanez teaches people to link their finances to points of joy.
Many of those who would benefit from this group setting may have tried to im prove their financial knowledge previously, but “they went through it alone and failed. Or they just know that they won’t do it alone,” she “Teachingsaid.people one-on-one can be very helpful, and there is a place for that,” she said. “Community coaching creates a different environment. For a lot of people, money choices are really just habits. One of the easiest and fastest ways to upgrade your habits is to join a group of people who are also learning to do the thing you want to do.”
sible for me to do so.”
“For example, one archetype is a saguaro cactus,” she said, “Saguaros grow up in an environment where it’s very dry. They tend to store a lot of water because you never know when it’s going to rain again.” The saguaro represents the type of person who may be good at saving but also can tend to overanalyze, she explained. “It can take a
She offered an example. “When you have a client who has a lot of anxiety, it can be really hard to give them advice because they’re not in a place where they’re ready to implement it,” she said. “Once you have gone through the program with me, you’re going to be more educated and able to understand what the financial advisor suggests.”
“I created five different archetypes to represent how people interact with mon ey, using different types of trees,” she said. “Trees are neutral and often associated with calm, positive feelings. Also, nature can inspire. Using these archetypes is one way to take the anxiety out of discussing financial topics.
“Client acquisition is really where I’m learning a lot right now,” she said. “I’ve been doing a lot of social media. I talk with other financial advisors. I let them know ‘Here’s the service that I provide. If some one doesn’t fit your categories, send them myYanezway.’” said that someone who is edu cated and comfortable with their finances
To refine her group process, Yanez started with a pilot group for her Bosque Money program. Bosque, she explained, means “forest” in Spanish. Among her teaching techniques, Yanez uses monetary archetypes based on trees.
LIVE LIFE IN COLOR — WITH DIANA YANEZ IN THE FIELD September 2022 » InsuranceNewsNet Magazine 33
The group experience is empowering, she said, because “when you see people around you who are also hesitant around money start to implement changes, that shows you that it’s possible.”
in Mexico. “I plan to be in Latin America for the foreseeable future,” she said. “All my clients are U.S.-based. It’s the sys tem I know the best. It’s just where I feel most comfortable working, especially as a Certified Financial Planner.”
saguaro 70 years before it sprouts its first branch. That’s a long time before it tries out something new. I’m sure we all have clients who analyze something to the nth degree before making a decision.”
after participating in her program “will be a better fit as a client for a financial advisor.”
Bosque Money provides group coaching over six months to help participants work toward their financial and life goals. By providing this service in a group setting, participants learn from other’s experiences in a supportive environment.
All the Colors groups are conducted via Zoom. While all Yanez’s clients are locat ed in the U.S., her base of operations is
“With at least eight people, if I ask a question, not everyone has to respond. When it’s only three people, you can feel that you’re being put on the spot. If you have more than 12 people, it’s hard to build intimate or strong connections. Especially because we are talking about money. It’s one of the biggest taboos.”
• Heaven’s tree — They see what’s wrong with the world but have a tendency to blame, thus giving away their power. The transformation comes from acknowledging what’s wrong with the system, taking action on what they can, and leaning into their visionary gifts for a better system.
• Coppice tree — They are giving and future-oriented, but they forget to care for themselves and can become controlling and resentful. The transformation comes from giving themselves care, trusting in others’ abilities to care for themselves, and seeing they are worthy now regardless of what they do.
BOSQUE MONEY ARCHETYPES
• Saguaro — They can make a feast out of crumbs and are always set in case of an emergency, but they do not enjoy their present and can be too anxious about the future. The transforma tion comes from thanking their savings and planning for their gifts and giving themselves more permission to enjoy the present. They need to become more willing to rely on others and give themselves permission to enjoy today.
With the organization just getting off the ground, how Yanez will attract a steady stream of group participants for All the Colors is still under consideration.
• Magnolia — They live intensely and enjoy their present but resent having to think of the future. The transformation comes from acknowledging what may not be working with their current sys tem, becoming comfortable not satisfying every desire, and knowing they have nothing to prove.
The pilot group has been a great learning process, said Yanez. The group will have 11 sessions that run over a six-month period.
Through using stories, neutral third parties — money archetypes as trees — and a mixture of solo, pair and group work, All the Colors group participants can gain clarity on what is creating their anxieties about money and how to deal with those anxieties. The Bosque (Spanish for “forest”) archetypes as trees include:
• Wisteria — They are visionaries who are bursting with ideas but do not set up support systems and often fail to grasp the technical aspects of money. The transformation comes from seeing the benefit of structures for them to lean on, getting support on the technical aspects, and giving themselves grace as they learn this new skill set.
The ideal size of the working groups is between eight and 12 people, she said.
“As a facilitator, I probably only talk a third of the time,” Yanez said. “During the 90-minute session, my goal is to set up a safe space to share experiences and do dif ferent exercises. Then I send them off into breakout sessions to talk together.
In her “Where Do I Start?” workshop, for example, participants learn how to measure their current financial health. To build more confidence in monetary deci sions, participants learn how to plan for the future and to increase the time horizon for that plan. Having sufficient time to plan can help reduce anxiety, she said.
Points of joy
» Setting your pricing as an entrepreneur.
“I separate out the more technical as pects of financial education from the group sessions,” she explained. “I provide that through evergreen content on an online platform. All the technical information is there when they need it.
Securian Financial Group, and its subsidiaries, have a financial interest in the sale of its products.
The “Creating Peace With Cash Flow” workshop helps create systems that keep the individual on track, even when their income fluctuates.
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.
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.
“Let’s say, for example, negotiating your salary is not a point of joy,” she said. “It feels really difficult to go and talk about how much you’re earning. On the other hand, being able to be generous is a source of joy. Given that, if your income is where it needs to be, you can be generous. Those areOnelinked.”group participant, Yanez said, was anxious around money. “She just wanted nothing to do with it. She didn’t want to earn it. She didn’t want to spend it. It was completely her partner’s work.”
John Forcucci Forcucci@innfeedback.com.Contactweeklyreerhaseditor-in-chief.InsuranceNewsNetisHehadalongcaindailyandjournalism.himatJohn. Follow him on Twitter @INNJohnF.
“I introduce all of the areas they have to look at with their money, including risk management, what their values are, budgeting, their earnings,” she said. “From there, we look at what they need to have in place by the time the six-month program is over to know they’re on track financially.”
“I’ll give it everything I have, and then we’ll see what happens next. When you plant something, you just have to trust that it’s sprouting.”
With a solid plan and time to implement it, “you are confident that you have systems in place to get to where you want to go,” she said. Other topics covered in the sessions include:
1 After completion of tele-interview or digital part 2.
Yanez says previous bad experiences with finances may have colored participants’ concepts of money, so she tries to link finances to points of joy.
the A Visit With Agents of Change
Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods.
resilience. I ask: ‘Where have you had diffi cult money situations or difficult life situa tions? What inner resources do you have to move through those difficult situations?’”
Fıeld
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.
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.
» Planning for retirement as an entrepreneur.
» Negotiating for a raise as an employee.
“In the group sessions, what I really fo cus on is mindset,” Yanez said. “I focus a lot on their money history and on establishing
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.
Several weeks into the group meetings, the participant had a conversation with her partner in preparation for filing taxes. “That was the first time, after a decade of their being together, that she didn’t walk away crying” after talking about money, YanezYanezsaid.said she is giving herself three years to build All the Colors into a self-sustaining business. She would like to eventually build to having two or three concurrent groups running three or four times a year. She’s hoping that the group experience will also spur some partici pants to become trained as future group facilitators.“Myhope is that someone who’s gone through it will want to start teaching it,” she said. “I’m very much in the process of creating something that can be replicated without me.
Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues.
34 InsuranceNewsNet Magazine » September 2022
» Teaching your kids about money.
» Key investing concepts.
» Risk management, or how to make sure you and your loved ones are protected in case of an emergency.
Setting up a safe space
Features and availability may vary by state or by product.
CALLED TO SERVE — WITH NATHAN SMITH
IN THE FIELD securian.com 400 Robert Street North, St. Paul, MN 55101-2098 ©2022 Securian Financial Group, Inc. All rights reserved. F100818-1 6-2022 DOFU 6-2022 2204393 Visit Securian.com/WriteFit to learn more We know you like fast underwriting. Your clients will like it too. Get your clients the coverage they need quickly, easily and — perhaps most importantly in today’s world — remotely with WriteFit Underwriting™. • No medical • No hassle • No WriteFitdelaysUnderwriting offers streamlined underwriting — no medical or blood tests — for a positive client experience. If your client qualifies, approval and policy issue can happen within 24 hours.1 Three easy steps to fast approval 1 Submit eApp 2 Application review 3 Underwriting decision
September 2022 » InsuranceNewsNet Magazine 35
The disconnect is most striking with millennials and Generation X. Sixty-five percent of millennials and 64% of Gen X said life insurance is one of the most im portant end-of-life preparations to make, but only 55% and 49%, respectively, own life insurance policies.
is important, but fewer than half (47%) have done so, according to a survey from Ethos. More than half (58%) say life insurance is one of the most important end-of-life preparations one can make, but only 48% currently have a policy and most are unpre pared for death.
BANNER LIFE TO PAY $3.5M PENALTY TO NEW YORK
Hispanics overestimate the cost of life insurance at five times more than its actual cost, according to the research. Other reasons Hispanics are reluctant to buy include having other financial priorities, not knowing how much insurance they need or what type to buy, haven’t gotten around to buying it, do not believe they need coverage or do not like to think about death.
The New York State Department of Financial Services claimed that Banner Life solicited and did insurance business in New York state without a license.
Banner Life will pay a $3.5 million penalty for violations of the New York Insurance Law in connection with the company’s pension risk transfer business.
wealth management tool.
When it comes to death, there’s a discon nect between what people say and think and what they do. More than two-thirds (68%) of Americans say discussing end-oflife preparations with family and loved ones
11% 14% 14% 9% 40%HispanicBlackAsianWhiteOwners who need more coverage Nonowners who need coverage No need gap 34% 31% 28% 49% 52% 55% 63% 0 0 50 3 100 6 150 9 200 12 Ordinary life direct premium growth to retreat from 2021’s historic high Renewal direct premiums and considerations ($B) First-year and single direct premiums and considerations ($B) Total direct premiums and considerations growth (%)
NOPE not
S&P expects the ordinary life direct premium growth will drop to 2.8% this year, down from 10.7% in 2021. Since 2003, the annual rate has only approached 5% twice.
— Nichole Myers, chief underwriter at Ethos
Life incoverageinsurancelowestUSamongHispanics
Several factors coalesced in 2021 to allow the industry to defy history: height ened consumer awareness of the need for end-of-life financial planning amid the pandemic, relatively easy year-over-year comparisons to a 2020 in which produc tion slowed during the spring and summer, and a favorable change to the U.S. Internal Revenue Code that made certain types of ordinary life policies more attractive as a
The tax code change updated Section 7702 to allow policyholders to add premi um without losing the tax advantage by becoming a modified endowment contract. This had a significant impact on whole life, which saw a policy count increase of nearly 6.3% in 2021 in the second-largest increase in more than two decades. Citing LIMRA data, although the policy count increased by more than 6%, the annualized premi um on those contracts represented a 20% increase, reflecting the tax law change. While universal life had an impressive 15% increase in policy count, the associated premium increased 18%.
LIFE INSURANCE TO SIMMER DOWN
Life insurance coverage among Hispanics is lower than that of any other race or eth nicity in the U.S., according to a 2022 study by Life Happens and LIMRA.
AMERICANS THINK ABOUT DEATH BUT WON’T PLAN FOR IT
Even before the pandemic we knew that about 5% of kids will lose a parent before the age of 15. If the loss is a breadwinning parent, most families will go bankrupt.
36 InsuranceNewsNet Magazine » September 2022 LIFE WIRES
The potential for serving the Hispanic market is huge, said Faisa Stafford, president and CEO of Life Happens. Forty-one percent of Hispanic Americans own life insur ance, the lowest figure among all races and ethnicities.
QUOTABLE
A PRT transaction typically involves a plan sponsor, usually an employer offering pension plan protection to its employees, that transfers some or all of the assets and liabilities of a defined benefit pension plan to a life insurance company. The company then issues a group annuity contract obli gating itself to make benefit payments to either the plan sponsor or the plan partic ipants. Between 2016 and 2019, Banner Life was an active participant in the pension risk industry. During that time, certain client-facing employees solicited insurance while in New York, resulting in violations of the New York Insurance Law, DFS said.
Of the 43.4 million Hispanic American adults, 40% are uninsured and say they need it, and 11 % are underinsured and say they need more, according to the 2022 Insurance Barometer Study by Life Happens and LIMRA, which examined the life insurance needs of U.S. consumers, including 1,400 Hispanic Americans. A total of 22.2 million have a life insurance need gap, the study found.
55% of millennials have no life insurance coverage. DID KNOWYOU ? Source: LIMRA and Life Happens
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Here’s the thing: The report tells me this niche market is more likely than the general population to own individual life insurance. So would the right message, targeted to this niche market with a strong
Now, to me, I see three different mar keting messages I can use in three differ ent email marketing pieces, three different Facebook ads, or three different talking points to open a conversation.
Here’s what I advise agents and advi sors who ask me about leads: Decide what problem you solve, who has this problem, where they congregate, and where they get their information from. Then create your marketing message.
One
Let me show you how I find a marketing plan in this report.
People buy on emotion and are moved to action by logic; even people who say they buy logically buy that way because of how it makes them feel.
» Supplementing retirement income.
question I hear all the time is about leads. Qualified leads. Good lead companies. Leads that work.
What if our marketing message told a story of how consumers in this niche mar ket can ensure their family could pay their monthly bills or their mortgage while pre venting their loved ones left behind from facing a difficult situation due to a prema ture
One in four Black Americans — that’s 10 million people — self-identified as needing life insurance.
A niche market big enough to fuel your life insurance business
Duh … that’s what life in surance does.
Whew! It’s exhausting!
A report generates some ideas on how to reach an im portant market segment.
OK,death?Iknow.
An interesting insight I found from this report is that this niche market has the per ception that life insurance is only for final expenses, a perception the report points out could result in their family not having enough coverage for income replacement. This perception also could make them
call to action, generate activity? And didn’t we mention we need activity?
Why do they buy?
It’s about your marketing plan and your activity plan — those are the things that will drive your business.
But this is a primary concern for 44% of this niche market, the report states.
Next, look for a growing market, one whose members recognize they have a problem, are willing to spend the money to solve this problem, and see you as someone who can help them solve these problems.
So I usually respond, “Maybe you need more ‘qualified’ leads, or maybe what you need are more leads to qualify.”
lose the opportunity to use life insurance to transfer wealth to their loved ones. Are you seeing a powerful call to action with thisYouinsight?havethe opportunity to help dispel this perception and protect their families.
As I start putting my message together, I find in this report that members of this niche market also see life insurance as a solution for things such as:
» Replacing lost income.
The report informs us that this niche market has a higher level of financial con cern than the overall population, and that financial concern has been exacerbated by COVID-19. Does this mean a marketing message that addresses how this financial concern can be tackled would resonate with this niche market?
So why do members of this niche market buy life insurance?
I’m seeing a marketing plan start to come together. What about you?
By Lloyd Lofton
LIMRA recently released a report about what’s fueling the purchase of life insur ance in a niche market. Lo and behold, right inside of this insightful report we see an outline of a marketing plan.
Nearly six in 10 members of this niche market (58%) own individual coverage. Compare that percentage with the 52% of the general population that owns in dividual life insurance, and it seems like a bigAnothermarket.insight I found in this report is 25% of this market segment owns group life insurance, a 5% increase from 2020. We all know what happens to group life in surance when you leave your workplace or you retire. So there’s a marketing message that can be targeted to this specific niche. What do you think?
» Paying off their mortgage.
38 InsuranceNewsNet Magazine » September 2022 LIFE
com.
self-identified as a market who say they need life insurance.
September 2022 » InsuranceNewsNet Magazine 39 A NICHE MARKET BIG ENOUGH TO FUEL YOUR BUSINESS LIFE
And this report tells us that, unin sured or underinsured, one in four Black Americans — that’s 10 million people —
That’s right, this niche market is the Black American market.
TheirWow!median age is 38, with 30% of them below 20. That indicates a growing market to me. Their median annual in come is $45,870, with nearly one in five earning $100,000 or more a year. Maybe they can afford your solutions?
A growing market
Like this article or any other?
Finally, 43% of those in this niche market say they have used a professional financial advisor, with 30% telling you they are cur rently seeking a financial advisor, accord ing to the report. This is six percentage points higher than the general population. There’s a lesson in that data for you!
Yes, they overestimate the cost of life insurance, believing it’s too expensive. This reinforces exactly why you need an ongoing, engaging marketing message that starts with curiosity, a powerful call to action, and an easy way to do business withTheyou.most important message I gleaned from this report is that 55% of Black Americans would face financial hardship within six months following the death of a primary wage earner.
Lloyd Lofton is the founder of Power Behind the Sales. He is the author of The Saleshero’s Guide To Handling Objections, voted one of the 11 Best New Presentation Books To Read in 2020 by BookAuthority. Lloyd may be contacted at lloyd.lofton@innfeedback.
Now as I look at this report, I find some of these elements: This niche market is 44 million strong, 13% of the population. And they grew more than 20% in the past 20 years.
Take advantage of our award-winning journalism, licensure and reprint options. Find out more at innreprints.com.
85 Percent of Policies are Issued
So what is the marketing message you should start with to reach this niche market?According to this report, of the 44% of Black Americans who are uninsured, onethird believe they need life insurance.
That’s why they need you.
2211ExpenseclaimingVisitneeds:yourexpenseOurpaidcommissionsandissuedexpensetoIt’sWithinCommissionsandPaid48Hoursnowpossiblegetyourfinalpoliciesquicklyyourfast.outstandingsuiteoffinalproductsnotonlyexceedsclients’needs,butalsoyourBuildyourbusinesswithacompetitivecompensationpackageincludinghighrenewals,monthlyincentives,andannualbonusesforqualityproductionQuickissue—over85%ofcasesprocessedin48hoursorless,E-appandpaperapplicationsavailableSalesandBusinessDevelopmentSupportfromsuccessful,experiencedFieldLeaders,andHomeOfficeteamsAndmore...FinalExpenseFast.comandgetthefactsononeofthefastestpayingfinalexpenseproductsonthemarketbyyour100%freeFinalMarketingKitnow!GovernmentPersonnelMutualLifeInsuranceCompany(GPMLife)N.E.Loop410SanAntonio,Texas78217-4630GETPAIDFASTER!
Swirling economic headwinds did not hurt annuity sales in the second quarter, LIMRA reported. In fact, the turmoil might have helped.
BILL TOFORMAKEWOULDITEASIERADVISORSSELLRILAS
Financial advisors may find it easier to get into the business of selling registered indexlinked annuities after a congressional com mittee approved a proposal to lower some of the market entrance barriers.
In 2021, RILA sales were $38.7 billion, 61% higher than in 2020, and current growth remains strong. RILAs promise growth beyond a simple fixed rate of re turn while providing guaranteed protec tion from losses in market downturns. But while capitalizing on RILAs’ grow ing popularity, financial advisors have complained the requirements are com plicated, burdensome and unnecessary. Those objections led to HR4865, a bill to lower barriers to retirement income products by requiring the Securities and Exchange Commission to revise rules re garding developing and offering certain annuity products, including RILAs.
The bill creates a dedicated SEC form for RILAs that would provide clients
ANNUITY WIRES
Insurers are ready to ride the RILA train for a little bit longer.
Also known as buffered or structured annuities, RILA products produced big sales jumps for the past several quarters. While growth has slowed some, LIMRA reported RILA sales up 5% to $10.5 bil lion in the second quarter. In the first half of 2022, RILA sales were $20.1 bil lion, 5% higher than prior year.
Total U.S. annuity sales increased 22% to $77.5 billion in the second quarter, ac cording to LIMRA’s U.S. Individual Annuity Sales Survey.
At least three insurers unveiled new RILA products recently.
Global Atlantic announced ForeStructured Growth, the first RILA to be issued by a com pany subsidiary. The LiveWell Dynamic Annuity was issued by Midland National Life — a member company of Sammons Financial Group.
Finally, Great American Life expanded its fee-based prod uct line with the launch of the Index Achiever Advisory RILA.
with disclosures tailored to these prod ucts and would streamline filing require ments for issuing companies.
The marriage combines Integrity, an insurance distribution company with ties to 450,000 agents and more than $20 billion in assets under management, and Annexus, a product design and distribution company with $45 billion in combined sales and partnerships with some of the biggest companies in the industry.
QUOTABLE
40 InsuranceNewsNet Magazine » September 2022
Continued equity market declines and rising interest rates drove investors to purchase recordlevel fixed-rate deferred annuities in the second quarter.
“This will be a game-changer for Integrity,” said Sheryl Moore, founder and CEO of Moore nuitymakesIntelligence.Market“Thisthemananheavyweight.”
— Todd Giesing, assistant vice president, LIMRA Annuity Research
INSURERS RUSH NEW INDEXLINKED ANNUITY PRODUCTS TO MARKET
Rising interest rates, continued inflationary pressures and talk of a looming reces sion had consumers flocking to safety.
LIMRA: Annuity sales pop to $77.5B in second quarter
Terms were not disclosed. As part of the transaction, Ron Shurts, co-found er and CEO of Annexus, will become a managing partner of Integrity. Previous Annexus investors, including funds man aged by Blackstone, will sell their interests as part of the transaction, Integrity said in a news release.
DID KNOWYOU ? Source: TIAA-CREF Individual & Institutional Services The first variable annuity, the CREF Stock Account, turned 70 years old in 2022. 1.82%Gap Between Fixed-Rate Deferred Annuities and Bank CDs Widens • 3 year avg FRD rate • 3 year avg CD rate Oct 2019 Jun 2.98%20221.69% 0.64%
In a deal that shook up the industry, Integrity Marketing Group acquired Annexus Group to create a potential annu ity selling powerhouse.
Total fixed-rate deferred annuity sales were $28.2 billion in the second quarter, 76% higher than second quarter 2021 sales. This is the best sales quarter for fixedrate deferred annuities ever recorded. In the first six months of 2022, fixed-rate de ferred annuities totaled $44.1 billion, a 44% increase compared with the same period lastFixedyear.indexed annuity sales also had a strong quarter. FIA sales were $19.7 billion in the second quarter, up 19% from prior year.
INTEGRITY MARKETING GROUP ACQUIRES ANNEXUS
It marked the highest quarterly sales ever recorded since LIMRA began tracking annuity sales and nearly $9 billion above the previous record set in fourth quarter 2008 during the Great Recession.
The Brighthouse SmartCare application process makes the process simple and seamless in a number of ways:
Brighthouse SmartCare offers clients a simple, totally digital application.
• NOT A DEPOSIT • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT GUARANTEED BY ANY BANK OR CREDIT UNION • MAY LOSE VALUE
Brighthouse SmartCare ® is a hybrid life insurance and long-term care product. It offers a simplified underwriting process, giving your clients some power over the unexpected. And thanks to its 100% digital approach, it makes the process for you as a financial professional easier.
• Offers flexibility to complete requirements from the comfort and privacy of home
Brighthouse SmartCare ® is an indexed universal life insurance policy with long-term care riders issued by, and product guarantees are solely the responsibility of, Brighthouse Life Insurance Company, Charlotte, NC 28277 (“Brighthouse Financial”). All guarantees, including any optional benefits, are subject to the claims-paying ability and financial strength of Brighthouse Financial. Each issuing insurance company is solely responsible for its own financial condition and contractual obligations. Brighthouse SmartCare has exclusions, limitations, reduction of benefits, and terms under which the policy may be continued in force or discontinued. May not be available in all states or firms. Brighthouse Financial ® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates. 2109 BDUL1108864 3704363.1[08/11/2023]
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• Eliminates labs and exams for most applicants
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Brighthouse SmartCare is the smart way to gain some power over the unexpected. Learn more at brighthousefinancialpro.com.
The recent poor performance has greatly depressed compound annualized returns over periods of up to five years. For instance, the HSBC AI Powered Multi Asset Index has a performance of -10.80% for the year to date through mid-July. That has, in turn, greatly depressed one-year, three-year and five-year numbers: -9.93%, -0.41% and 3.08%, respectively.
4] Compared with an indexed annuity product using a traditional annual S&P cred iting strategy with, say, a 9% cap (about as good as it gets today for non-advisory annu ities), the stars would need to be just about perfectly aligned for that to beat this custom index strategy at even a lowly 3% raw index annualizedLaurencereturn.Black is the founder and
1] With only one crediting period five years in the future, there is plenty of time for the index constituents and design to pro duce reasonable performance that may be as good as or better than the past five years of just over 3% annualized.
Here is an example: Athene’s Accumax is a fixed indexed annuity that offers the AI Powered Multi Asset Index in a FIA with a five-year surrender charge period. In exchange for that relatively short time commitment, the product offers to credit interest once at the end of five years and provide the owner with participation of 260% of the five-year total performance of the index. Some data to ponder on the po tential of this product:
The result of this innovation was an enormous proliferation of custom index choices that shared one common trait. They stretched options budgets to create more palatable upside potential during the secular low-rate environment, which it seems is finally history after 40 years of declining yields.
If
But tempering the excitement about those big participation rates is the recent performance. Paradoxically, the key con tributing factor to the high par rates — the rise in interest rates — is also the main driver of perhaps the worst performance any of these indexes have ever experienced in their relatively brief (less than a decade for most) existence. Over the past six to 12 months, many of these indexes are down 5%-10%. This might not seem much com pared with the 20%-30% declines in equity markets, but for low volatility indexes, that is outlier-level poor performance.
The good news (and bad) of rising rates
3] Applying a compound annualized growth rate to growing $100,000 to $141,410 in five years results in about 7.25% return. That is simply an astounding performance for a product free from market risk.
By John Rafferty
42 InsuranceNewsNet Magazine » September 2022
reward can only come with more risk.
anything good came to the annuity industry from more than a decade of historically low interest rates, it’s the innovation that this environment compelled upon product develop ment. With options budgets shrunken to extreme levels last year, the “upside poten tial” of traditional indexes and crediting strategies like the long-suffering annual point-to-point S&P 500 index seemed a bit of an oxymoron if you agree that 2%-4% hardly seemed like upside.
The window of high participa tion rates is now open, and no body knows how long it will last.
Since custom index volatility is typically about one-third that of the S&P 500 price return index, those tiny options budgets a year ago had a chance to produce much better returns than the S&P indexed ac counts. Whereas the best you might expect from the S&P capped indexed accounts might have been 3%-4% in a year, the cus tom indexes often came with no caps or at least with caps much higher than the S&P.
What a difference a year can make. Now, with corporate spreads broadening and the 10-year Treasury about double where it was not long ago, these new indexes are sporting eye-popping participation rates (for multiyear crediting strategies in par ticular), such as those that credit every two years or every five years. I am talking about rates that provide 200%, 300% or even 400% in some cases, of the upside performance
More custom index choices = greater upside potential
No matter what your par rate is, those numbers don’t inspire confidence for many. Of course, 10-year numbers look much better at almost 6% annualized. (The index inception date was Jan. 26, 2021, so all performance prior to that date is back-tested.)Whichbrings me to the key point here. The window of high participation rates is now open, and nobody knows how long it will last. If the Federal Reserve finishes its inflation-fighting efforts sooner rath er than later and markets stabilize, index performance should improve, but there is no guarantee that participation rates for new money will remain as attractive as they are today.
2] Even if the next five years do produce only a 3% average annualized return simi lar to the five-year period ending June 30, 2022 (which reflects the year-to-date dou ble-digit decline), that would translate into a total return of $15,927 for every $100,000 of purchase amount at the end of the period. Apply a 260% participation rate to that and total interest at the end of the five-year period swells to $41,410.
American Equity Investment Life Insurance Company® does not offer legal, investment, or advice. Each client has specific needs which should be discussed with a qualified legal
New enhancements deliver more opportunities for and higher payouts.
John may be contacted at feedback.com.john.rafferty@inn
Explore all the benefits of IncomeShield by visiting www.american-equity.com/incomeshield-annuity.
sheet on each index, with information on type, region, inception, ticker, carriers that offer the index, and underlying holding categories. More important, as the front of each fact sheet states, they “run thou sands of simulations using the consensus market return expectations, along with critical index characteristics to generate forecasted annualized 10-year return ex pectations.” In doing so, they come up with
September 2022 » InsuranceNewsNet Magazine 43© 2022 American Equity. All Rights Reserved.
For example, the AI Powered Multi Asset Index fact sheet, as of July 1, has a Conservative 10-year return forecast of 4.71%. (The Moderate and Strong are 5.84% and 6.94%, respectively.) According to the report, the index is well diversified with around 18% exposure to equities, 3% to gold and 50% to fixed income. It has some momentum exposure and its dy namic mechanism that rotates through asset classes may deliver an extra ability to outperform (called alpha).
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John Rafferty is princi pal at Rafferty Annuity Framing, Spring, Texas.
That high index design attribution may be of some comfort to those who place lit tle faith in equities or fixed income to per form well in the next decade — they may not need to for this index to deliver.
product with the potential to return dou ble-digits annualized over five years and with no additional fees while exposed to no market risk was at best highly improb able if not impossible. But indeed, a very rational case for it can be made, as the bar is low for high performance thanks to the annuity innovation available today.
tax
HEALTH/BENEFITS
The U.S. Department of Justice is seeking to block UnitedHealth Group from acquiring Change Healthcare, a deal valued at $13 billion.
Source: The Wall Street Journal
Price transparency rules are aimed at making it easier for consumers to use the information to shop for scheduled medical care. The theory is that making this price information public will help moderate future costs through compe tition or improved price negotiations.
— Jesse Slome, American Association for Long-Term Care Insurance coverage? three reasons given were:
Starting Jan. 1, another rule takes effect that could provide consumers with some
The sweet spot for looking into long-term care insurance is generally between ages 55 and 65.
In this latest challenge to the ACA, a coalition of employers and individuals ob jects to paying for certain services. The plaintiffs contend that the provision requiring coverage of preventive services violates the Religious Freedom Restoration Act because the law requires coverage of pre-exposure prophylaxis, a preventive HIV medication.
earlier this year.
A majority of those who receive health insurance through their employer-provided plan said they are more satisfied with the coverage they receive through work than they are with the current health insurance system overall.
The survey showed that although 54% of the 1,000 adults surveyed said they are satisfied with the current health system overall, 67% said they were satisfied with the coverage they receive through their employer. It is more important for employer-provided
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Health care providers are largely opposed to ending the provision. The American Medical Association released a statement in conjunction with 61 medical associations to condemn the lawsuit. The provision is also supported by the Justice Department and 21 state attorneys general.
Health insurers are complying with a fed eral rule that took effect July 1, posting their negotiated rates for just about every type of medical service they cover across all providers.
KNOWYOU ?
The top
relief. It involves the apps and other tools that some insurers already provide for policyholders so they can estimate costs when preparing for a visit, test or proce dure. Insurers must make available on line, or on paper if requested, the patient’s cost for a list of 500 government-selected, common “shoppable services,” includ
1 Affordability: 45% 2 Comprehensive coverage: 45% 3 Choice of providers: 44% Source: AHIP
MOST WORKERS SATISFIED WITH THEIR HEALTH BENEFITS
The Affordable Care Act was the subject of another round of court arguments. This time the issue is the law’s provision that requires payers to cover preven tive services, including HIV prevention drugs, as well as cancer screenings and vaccinations.Arguments
44 InsuranceNewsNet Magazine » September 2022
That was one of the key takeaways from research conducted by Locust Street Group as part of America’s Health Insurance Plans’ Coverage@Work campaign, which aims to educate policymakers and the pub lic about the value of employer-provided coverage.
ACA challenged in court — again
were heard in the case of Kelley v. Becerra, which was filed Feb. 25, 2021, in the U.S. District Court for the Northern District of Texas.
What makes someone satisfied with their
HEALTH INSURANCE PRICE DATA IS AVAILABLE
coverage to be comprehensive than it is for it to be affordable, survey respondents said. This was especially true of those 55 years old and older, with 77% of that age group saying it is more important that their health insurance cover every service they need.
DID
Solution stacking is possible only if the PBM allows it. When structuring a PBM contract, make sure it allows the client to bring in third-party solutions. This must be specified in the contract to ensure access to these programs. This includes a com mitment from the PBM to support any
and employer groups alike know that 5% to 10% of insured workers and their de pendents drive 50% to 60% of the cost of pharmacy claims. A few members with prescriptions for a spe cialty drug with a five-figure price tag can easily represent the majority of an entire group’s pharmacy spend.
Plan sponsors and members must be proactive about MAPs. These programs aren’t triggered automatically. If the mem ber doesn’t apply and provide income documentation, the plan sponsor is still responsible for the entire cost of the drug.
Imagine a member — let’s call her Cindy — has a prescription with an an nual cost of $100,000. If her income is low enough to qualify for a MAP, the plan sponsor would pay only $30,000, a sav ings of 70%.
46 InsuranceNewsNet Magazine » September 2022 HEALTH/BENEFITS
Brokers
required data feeds at no cost and stipu lates that implementing these programs will not affect pricing terms.
Most drug manufacturers provide incomebased manufacturer assistance programs (MAPs) for high-cost specialty drugs. If the member with a high-cost pharmacy claim qualifies for one of these programs, it typi cally results in the group paying only about 30% of the cost of the original claim.
Step 4: Try multiple international filling solutions.
Typically, plan sponsors believe they don’t have many options for specialty drug claims and simply end up paying them. But that’s not the case. When one solution
If the member’s income is too high to be
How ‘solution stacking’ can rein in pharmacy benefit costs
By Kevin Kobielski
An idea that cycles through multiple specialty drug pro grams and often leads to a ma jor cost reduction.
Step 1: Select the right pharmacy benefit management partner.
doesn’t work, there are likely several more options to try. A little ingenuity can make a significant impact on drug spend and trends. This is a technique I describe as “solution stacking,” which cycles through multiple specialty drug programs and of ten leads to a major cost reduction. Here’s how solution stacking works.
Step 3: Identify the greatest potential savings.
These drugs are often lifesaving or provide a dramatic quality of life im provement for those who take them. No one would question the necessity of us ing them. But when a group can mitigate some of the cost without affecting the clinical outcome, it can be a game chang er. The broker who unlocks these savings becomes a trusted ally.
The foundation of this solution is selecting a pharmacy benefit manager that is willing to work with outside solutions. Since the profit margins of most PBMs are inversely tied to the number of programs they allow, this can be a challenge. But there are PBMs out there that highlight their flexibility as a differentiator.
Step 2: Build flexibility into the PBM contract.
Step 5: Try domestic filling, specialty copay and dosage optimization.
Homozygous familial hypercholesterolemia, which can lead to heart disease $47,897
Mavenclad Multiple sclerosis $63,993 Ravicti Urea cycle disorders $57,998 Actimmune Osteopetrosis and chronic granulomatous disease $55,310
Now, let’s assume that the drug is not avail able internationally. Plan C is likely going to be sourcing it through another specialty pharmacy outside of your PBM. The sav ings here are more modest, maybe 20%. But that $20,000 reduction on Cindy’s claims is stillThissignificant.option is usually paired with a specialty copay program to ensure the group can take advantage of any specialty copay dollars. Specialty copay programs do not require income thresholds, so ev eryone qualifies.
Chenodal Gallstones $42,570
Recorlev Endogenous Cushing’s syndrome (lowers the body’s cortisol amount) $32,400
eligible for a MAP, a good Plan B is typically international mail order. These programs source drugs from other countries with health care systems on par with the U.S., such as Canada and New Zealand. The sav ings average around 50%, so Cindy’s plan sponsor would be paying $50,000 instead of the full $100,000.
Step 6: Member engagement.
Tibsovo Acute myeloid leukemia, cancer of the blood and bone marrow $30,083
Cancerous tumors with genes that fused to gether abnormally $33,784
Neurotrophic keratitis, which makes the cor neas less sensitive $50,874
Vitrakvi
Each international mail-order solution may source from a different country, so it can take more than one attempt to source the drug. For example, only two of the three formulations of Humira are avail able in Canada. If the member needs that third formulation, an international filling partner sourcing from Canada will come up empty and you’ll have to shop around.
the likelihood that the member and their drug will fit one of those solutions.
Acthar Gel Lupus, rheumatoid arthritis, multiple sclerosis, infantile spasms, ophthalmic conditions and psoriatic arthritis $41,459
Drug name
Gattex Short bowel syndrome $42,913
What it treats
CortrophinGel
September 2022 » InsuranceNewsNet Magazine 47
It may seem odd to devote so much attention to managing a handful of spe cific claims. But even a savings of 10% on claims of this size is significant. Most employers spend 50% of their pharmacy costs on a very small amount of specialty users. So this additional work can have a significant return on investment. By exploring multiple solutions, you increase
In order to get the most out of the pro gram, there must be tight coordination between the broker, the group and the ven dor. Getting members enrolled requires a bit of legwork on their end, so engaging the members early is key to success.
Hutchinson-Gilford progeria syndrome, which causes premature aging $89,480
Oxervate
Orladeyo Hereditary angioedema $38,427
Kevin Kobielski, CPA, is president of AlignRx Consulting, a pharmacy benefits consulting firm. Kevin may be contacted feedback.com.kevin.kobielski@innat
Juxtapid
Monthly cost (based on length of therapy)
HOW ‘SOLUTION STACKING’ CAN REIN IN PHARMACY BENEFIT COSTS HEALTH/BENEFITS
Worth the effort
Myalept Leptin deficiency in people with generalized lipodystrophy $77,496
Ayvakit Gastrointestinal stromal tumors $35,213 Qinlock Tumors in the gastrointestinal tract $35,199 Korlym High levels of cortisol in the body $34,620
Rheumatic disorders, collagen diseases and dermatologic diseases $31,851
Tegsedi Nerve damage from hereditary transthyretin amyloidosis $36,707
Zokinvy
Takhzyro Angioedema, a disease that causes swelling underneath the skin $48,233
One factor to consider here is rebates. Although the price could be lower at an outsourced specialty pharmacy, the re bate from the PBM could be higher. It’s also possible that the outsourced special ty pharmacy gets a better rebate as well as a betterOutsourcingprice. to another specialty phar macy can work well in conjunction with dosage optimization, where outreach to the provider ascertains if it might be pos sible to swap in a generic or switch to a different form of dosage. For example, the prostate cancer drug abiraterone costs $10,000 for 500 mg tablets. But two 250 mg tablets? That’s only $500, decreasing the cost by 95%.
30% Americansof say social media is a leading source of financial information and advice.
and other financial advisors pointed out that even though interest rates on a 30-year, fixed-rate mortgage are now at 5.54%, a little more than dou ble what they were a year ago, rates are still well below what they were 40 years ago, when the Federal Reserve broke the back of inflation with punishing rate hikes. In those days, interest on fixed-rate mort gages could run as high as 13%.
To prepare for leaner times ahead, Americans are already taking action, cutting back on meals
Financial discipline leads to better sleep
Forget the warm milk or white noise. If you really want to get a good night’s sleep, you need a financial advisor. That’s the word from the Northwestern Mutual 2022 Planning & Progress Study, which found that people who work with an advisor say they sleep better and are happier.
The risks retirees tend to downplay include longevity, health, market risk, family issues and Social Security sol vency. In addition, Americans largely are unprepared to handle long-term care expenses.
BUTTONTHATSMASHLIKE
SOURCE:
Americans are increasingly relying on nontraditional investments like cryptocurrency — which, the survey found, inves tors owned at levels equal to more traditional investments like mutual funds and exchangetraded funds.
goforit
Americans believe asset volatility is the big scary monster threatening their retirement. But the reality is that there are other monsters just as likely to upset their post-employment lives.
Study finds Americans worry about the wrong retirement risks
Although consumers who work with advisors may be sleeping better, the same cannot be said for the majority of the consumers who took part in the survey. The researchers reported that 54% of adults 18 years and older re ported that they are somewhat or very anxious about their finances.
Some advisors are telling clients not to let rising interest rates deter their plans to buy.
The latest study brief from the Center for Retirement Research at Boston College is titled “How Well Do Retirees Assess the Risks They Face in Retirement?” The answer is not very well at all.
Prudential
Just as Americans emerge from the COVID-19 pan demic, they are faced with fears of an economic downturn and high inflation. So what are consum ers doing about these fears? Prudential found some answers in its most recent Pulse research series.
Keep advisorsrisingforwardmovingdespiterates,say
and entertainment outside the home (42%), canceling monthly subscription plans (29%) — including streaming services — and setting aside more money for emergencies (26%).
Financial facts and figures powered by AdvisorNews.com
With the Federal Reserve hiking interest rates, many investors and everyday con sumers wonder how they should proceed in a volatile environment. Should they buy that house or get a new car? Or should they wait to see whether interest rates and pric es come back down?
Americans prepare for economy’s next act
“If you find the home you like or the car you want, you should go forward,” Don Detts Jr., a certified financial planner with Wells Fargo Advisors in Southpointe, Pa., told the Washington (Pa.) ObserverReporter.Detts
The level of anxiety increases even more for younger adults, with twothirds (66%) of both millennials and Generation Z saying they feel somewhat or very anxious about their finances. And a generational breakdown across wellness categories reveals that Gen Xers are the worst sleepers, and millennials and Gen Zers are tied for the most anxious.
May 2020 » InsuranceNewsNet Magazine 49 Individuals annually earning in excess of $500,000 need disability benefits that can keep pace with their affluent lifestyle - they need High Limit Disability. The benefits of a recently-insured surgeon, making $1,100,000 consisted of: ⌂ $10,000/month Group LTD ⌂ $15,000/month Individual DI ⌂ $32,000/month High Limit DI Call (800) 345-8816 or visit www.piu.org for more information. High Limit Disability Occupation: Surgeon Age: 51 Income: $1,100,000 Total Benefit: $57,000/month
all definitions is a willingness to be vul nerable, as well as having confident expec tations related to the ability of one party to predict how the target of trust will behave in the future.
a better mouse trap or show me some thing that I’m missing. Not just for me, but maybe for my legacy planning. Show me what’s out there.”
Of the consumers we surveyed, 83% indicated “individuals at company are upfront,” and an equal percentage indicated “individuals at company follow through” as employee behaviors that influence trust. These were among the top 10 rea sons to trust a financial company.
From the consumer’s perspective, it’s possible that complexity signals distrust while simplicity — if it’s transparent and truthful — can be an attractive characteristic.
•
It’s important for financial advisors to know that establishing trust is a function of capability and integrity. A financial advisor’s capabilities include credentials, knowledge, skills, results and perfor mance history. Integrity is part of a finan cial advisor’s character and includes their motives and intent with clients and pros pects. Capability and integrity are equally essential. For instance, a financial advisor could be sincere, but a client or prospect won’t trust them fully if they don’t get results. On the other side, an advisor can have great skills and a great record of get ting results; but if the advisor is dishonest, clients and prospects are not going to trust that advisor either.
Consumers seek trust and results in advisor relationships
We used surveys, focus groups and inter views to study trust among consumers of financial services Simply put, we’ve learned trust means confidence. When
In financial services, the conditions that make trust important — risk, vul nerability and interdependence — are at play. If the outcomes of an action were certain, there would be no need to trust financial advisors. Trust involves risk, and trust relies on interdependence between advisors and their clients. Together, risk and interdependence cre ate vulnerability. Clients and prospects will only accept vulnerability in the pres ence of confident expectations about positive future behaviors of financial ad visors. Given these conditions, trust can be both created and destroyed.
50 InsuranceNewsNet Magazine » September 2022
Establishing consumer trust: Actionable insights for advisors
That’s an insightful remark we heard from an interview conducted as part of The American College Cary M. Maguire Center for Ethics in Financial Services’ research on consumer trust in financial services. This consumer, an Asian American man with an annual household income of more than $200,000 and high trust in finan cial services, looks at both a firm’s values and the individual advisors’ values when searching for a new firm to work with.
ADVISORNEWS
consumers trust financial advisors, they have confidence in them — in their capa bilities and integrity. Although consumer beliefs about trust are complex, the good news is that financial advisors can influ ence trust.
consumers are seeking knowledge and skills in a financial advisor. As those in the profession are aware, it takes knowledge and skill to simplify complex ideas. Yet from the consumer’s perspective, it’s pos sible that complexity signals distrust while
“Build
Consumers are trusting financial ad visors with their hard-earned money, and they are expecting something in return. Domarina Oshana
He shared he would not have chosen the individual advisor he started working with two years ago unless a larger firm backed him. As he put it, there are “a lot of fly-bynight firms” that are on shaky ground. For consumers such as this man, their trust is driven by the need for strong fraud and pri vacy protections, and these consumers are savvy at vetting firms to see whether they can grow their investments while main taining ethical standards.
We know from academic literature that trust has been a focus of research in many disciplines for more than half a century. This has led to several frameworks that are varied and multidimensional. There is no single, universally accepted definition of trust across disciplines. There is wide spread agreement, however, that trust is essential for a range of human experienc es, including business. Central to almost
We also learned that consumers pri marily seek simplicity. This finding runs counterintuitive to the general belief that
Amongabout.other beliefs, we asked about perspectives on the idea “consumers trust financial professionals who build personal relationships with them.” Although 60% say it’s a reason to trust a financial com pany, only 17% say it’s a reason to trust
Consumers’ preference for financial products and services that are simple and easy to use was so strong (at 60%) that it outweighed fees associated with the prod uct or service (58%), level of risk (57%), or guarantees offered by the company (50%). This suggests financial advisors and their companies could get ahead by offering both the pros and cons of a product to a client. Financial advisors could take time to explain difficult concepts and offer sug gestions — even for products consumers don’t ask
One consumer we surveyed perhaps said it best: “I want employees who are handling my account to be treated well, to be happy and engaged. I don’t want some one who is unhappy or doesn’t believe in the“Iproduct.alsodon’t want someone who is over compensated (e.g., with commissions or fees) for what they do and for that to be the reason they’re happy. If my invest ment is doing well, that person should be compensated for ensuring my investment is doing well. I don’t think there should be just standard compensation, regardless of performance.”Thefinancial services industry’s me chanics are powered by trust. Without it, it’s hard to run an effective business. Through our research and education on trust, we get to the heart of managing stakeholder challenges in the industry. We aspire to empower financial advisors with the latest insights, tools and strate gies for building trust in their profession and elevate ethical behavior for the bene fit of society.
Do credentials matter? Consumers do seek out credentials of the advisors with whom they work. Among consumers who use financial brokerages, 57% indicated “credentials of the individual” as a critical type of information for choosing a finan cial firm. This speaks to the importance of education in the advisory and wealth man agement
In our survey, 40% say financial profes sionals who build personal relationships with them are a reason to trust their in vestment brokerage.
the one they use. That’s an interesting discrepancy, yet it’s consistent with our general finding that company character istics influence trust more than company employees.Whenitcomes to investment brokerage firms, however, consumers have a stron ger view of employees influencing trust.
Consumer viewpoints
Domarina Oshana, Ph.D., is a social scientist and research Americananddirectorprofessional.developmentSheistheofresearchoperationsforTheCollegeCaryM.
These firms lead in factors such as employees who “make an effort to know me” and “follow through on what they say they will do.” Making and keeping com mitments — even small commitments — and getting to know clients as unique individuals are actions that demonstrate trustworthiness. We see them as keys to building trust.
simplicity — if it’s transparent and truth ful — can be an attractive characteristic.
Consumersspace.are trusting financial ad visors with their hard-earned money, and they are expecting something back. Whether they refer to it as “performance,” “results” or “wealth,” consumers want more of it in the future.
Moreover, while it’s important to con sumers that companies treat their employ ees well and that they, in turn, are treated well by financial advisors, they don’t want that treatment to be based on high fees or excess compensation.
Source: American College Cary M. Maguire Center for Ethics in Financial Services
Maguire Center for Ethics in Financial Services. She may be contacted at domarina.oshana@ innfeedback.com.
September 2022 » InsuranceNewsNet Magazine 51 CONSUMERS SEEK TRUST AND RESULTS IN ADVISOR RELATIONSHIPS ADVISORNEWS
More consumers are warming to the idea of using a telematics tool to enhance safe driving while also lowering costs.
Passenger vehicle thefts increased 8% in 2021 from the previous year, NICB reported, with many stolen cars shipped overseas or broken down for used car parts in the RoundingU.S.out the list of most stolen vehicles are: 2000 Honda Civic, 1997 Honda Accord, 2007 Toyota Camry, 2020 Nissan Altima, 2000 Honda CR-V, 2018 Jeep Cherokee/Grand Cherokee and 2020 Toyota Corolla.
— Michelle Jackson, senior director of TransUnion’s per sonal property and casualty insurance business
Source: Louisiana Department of Insurance
would complete a disclosure form that includes details of flooding. If landlords don’t disclose flood history, tenants can take landlords to court for damages they incurred due to flooding.
Everyone is talking about high inflation rates, but homeowners insurance rates are soaring higher than the rate of inflation in several states, according to Policygenius.
Commercial insurance premiums rose 12% on average in the first quarter of 2022, com pared with the year-earlier period, accord ing to the Marsh brokerage unit of Marsh McLennan. Many businesses have faced double-digit annual rate increases since 2019, as insurers put a price war behind them. The cumulative increase since 2018 has been about 50%, a Marsh spokesman told The Wall Street Journal.
INFLATION DRIVES RISE IN BUSINESS INSURANCE PREMIUMS
But price increases appear to be slow ing. Average year-over-year increas es in the U.S. peaked in mid-2020 at nearly 18%. However, even though increases are slowing, premiums are
Percentagewise, homeowners in Arkansas saw the highest average increases in rates, up 18.5% over May 2021. Washington state was in second place at 18.1% and Colorado was in the No. 3 spot with premium increases averaging 17.5%. In the 25 states that Policygenius surveyed, the average increase was 12.2%.
FULL-SIZE PICKUPS MOST STOLEN VEHICLES
DID KNOWYOU ?
ers with a form as part of their lease that discloses the history of flooding for residential or commercial properties dating back 10 years. When signing the
A new law in Westchester County, N.Y., is leading the way in that state by having landlords disclose a history of flooding to their properties. It intends to warn ten ants of flooding to a unit before they sign a lease, and it provides a legal recourse if landlords don’t disclose prior flood dam age. State lawmakers may soon follow suit alongside other states that have faced increasingly devastating floods.
Home insurance prices rise higher than inflation rate in some states
52 InsuranceNewsNet Magazine » September 2022
What’s driving the increases? Insurers said they have been forced to make higher payouts due to an increase in damaging hailstorms and wildfires. In addition, costs for construction and building labor have skyrocketed due to supply-chain problems and worker shortages
If your client owns a Chevrolet or Ford full-size pickup truck, tell them to keep it secure. Those two vehicles took the top spots in the National Insurance Crime Bureau’s annual vehicle theft report. Of the nearly 1 million total vehicles reported stolen in 2021, 14% of passen ger vehicles were Chevrolet, Ford, and GMC full size pickup models.
NEW YORK LAW WOULD REQUIRE FLOOD DISCLOSURE
Insurers have paid $13.1B in Hurricane Ida claims in Louisiana.
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lords and tenants
As far as dollars were concerned, Minnesota homeowners saw the highest average jump in premiums, followed by Colorado.
The state bill requires landlords to provide information about flood risk and history, along with information about flood insurance, for residential leases. It’s awaiting Gov. Kathy Hochul’s signature.
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Have updated contact information on file. Before a predicted event, send out communications asking your clients to confirm their current contact informa tion and any emergency contacts they may want on file. After the event, you will be able to get in touch with your
Educate your clients. No doubt your agency did a stellar job explaining the
54 InsuranceNewsNet Magazine » September 2022
By Joshua Cruce
How to expedite claims after a catastrophe
policy and what it covers when the customer purchased it.
Before the storm
Procedures to have in place be fore and after a disaster occurs.
But perhaps it has been a while since that initial purchase, or maybe your cli ent’s coverage needs have changed and they haven’t thought to update their pol icy. Homeowners do not think about their insurance coverage when they install a detached shop or undertake a large resto ration
Take the time to provide an overview of your claims process. Many clients have no idea how the insurance claims process works until they must file a claim. During the aftermath of a catastrophe is not the time to educate them on your pro cess for the first time. Before the storm, provide your customer base with informa tion about the insurance claim’s workflow as well as how and why third parties are involved, and then make sure you give cli ents an opportunity to ask any questions they may have.
your clients periodical ly to see whether their coverage is still appropriate and that they have a clear understanding of their policy as a whole. For example, many clients are surprised and upset when they learn the policy in force covers the roof at actual cash value instead of replacement cost value.
One
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of the most common complaints of policy holders who have a neg ative claims experience is the lack of speed to in demnification, which ul timately equates to a slow claims process.
This bad experience can translate into lost business. According to a recent Accenture study, 83% of policyholders who have a poor claims experience plan to switch to a new provider or have al ready done so.
After a catastrophe, your clients ex perience a myriad of emotions: fear, un certainty, grief, anger, confusion — the situation is inherently a negative one. You have the unique opportunity to be a beacon of hope during that time, but in order to provide that hope you must have certain procedures in place to ex pedite the claims process.
Provide contact information for local resources. Depending on the severity of the event, it can take days for emergency aid to access the affected area, which will ultimately delay the resolution for your client. Before a predicted event, send your clients contact information for local resources that can provide emer gency repairs, shelter and other services they may need. These local resources can respond more quickly after an event, which will not only ensure your clients’ safety but also can allow the claims pro cess to begin even earlier.
Encourage your clients to gather important documents. Lienholder in formation, policy documentation and personal identifying documents should be uploaded securely to cloud-based storage. That way, if there is an emer gency evacuation, your clients’ claims process won’t be delayed by trying to locate documents they may have had to leave behind.
A fast and efficient claims process is important for insurance companies that want to retain their customers and ef fectively manage their brand, but it is of paramount importance to policyholders. An efficient claims process will enable your clients to start to rebuild their lives as soon as possible after a devastating event. And you have the privilege of be ing a part of that.
First notice of loss is critical. Having an accurate description of damages will help you prioritize what needs to happen with each individual client. Is the home livable?
After the storm
Advise the client on how to handle repairs and maintain invoice and payment documentation. The repair process is a part of post-event recovery. Informing the client on how to perform temporary repairs and maintain proper documen tation of repairs will ensure the claim progresses quickly and smoothly.
Inform the client of their duties after the loss. Many clients have not read their policy, including their duties after the loss. Knowing they must make reason able repairs to mitigate losses and pro vide supporting evidence for their claim is vital to ensuring a smooth claims pro cess.
Like this article or any other? Take advantage of our award-winning journalism, licensure and reprint options. Find out more at innreprints.com. Source: Insurance Information Institute • About one in 20 insured homes have a claim each year. • About one in 35 insured homes have a property damage claim related to wind or hail each year. • About one in 60 insured homes have a property damage claim for water damage or ice each year. • About one in 385 insured homes have a property damage claim related to fire and lightning.
expedite the claims process.
Vet and verify contractors. It’s sad, but there are those who will try to take advantage of loss victims, especially af ter a large-scale event. You can set your clients’ minds at ease by providing them with a list of contractors who have al ready been vetted by your company and meet the proper requirements, such as being insured and bonded. Instruct your clients to collect and maintain any doc umentation provided by the contractor, such as repair estimates and payment receipts. If the client is able to provide these directly to their adjuster, it can
September 2022 » InsuranceNewsNet Magazine 55
If not, then the priority should be securing safe shelter for them and their families and then focusing on their claim. If the home is livable, encourage the client to start documenting their loss. This will help expedite the claims process during those times when field adjusters are inundated with high claim volumes.
clients and start the claims process as soon as possible.
Ensure your client knows that damage must be documented and preserved. For example, if a permanent repair is re quired before the adjuster’s inspection, take plenty of photos of the damaged area or items before making the needed repairs, and maintain invoices, estimates and receipts to present to the adjuster upon their inspection.
Start working on personal property. If their home is livable or safe to return to, have the client start working on their damaged personal property list. The client should list damaged items in an Excel spreadsheet, including details such as the year purchased and the original purchase price. Having a list of damaged personal property that can be compared quickly with their pre-loss documenta tion will save the adjuster time and result in the most appropriate indemnification for the client at the claim’s onset.
Joshua Cruce is chief strategy officer at Brush Country Claims. He may be contacted at cruce@innfeedback.com.joshua.
Encourage pre-loss documenta tion. Instruct your clients on how to document their property and contents properly. Photos, receipts and appraisal documents also can be uploaded to se cure cloud-based storage. Having this documentation available will save an incredible amount of time during the claims process. Photos of the pre-loss condition of the client’s home and per sonal property can go a long way toward resolving any potential disputes before they happen.
do business owners prepare for this and implement a strong remote work culture?
At our company, we implemented a nocall internal policy. Internal meetings are limited, and written communication is king. Any phone calls or meetings within the company are purposeful, to the point and absolutely necessary.
Minimizing internal phone calls actual ly improves companywide communication because team members are deliberate with theirWhencommunication.employeescan focus on their work and manage their own day, their satisfac tion will improve. No “can you jump on a really quick call?” distractions are allowed.
A study by the University of North Carolina even backed this up. The study surveyed 182 senior managers in a range of industries and found that 65% said meet ings keep them from completing their work, 71% said meetings are unproductive and inefficient, and 64% said meetings come at the expense of deep thinking.
56 InsuranceNewsNet Magazine » September 2022
A key aspect of maintaining a positive remote work culture is recognizing the importance of work-life balance. Employees should be made to take breaks when neces sary, use all of their paid time off (and then actually log off), and not stay online until 9 p.m. Leaders should be setting this example by using their PTO and encouraging their team to do the same.
According to an Owl Labs survey, close to 70% of full-time employees in the U.S. began working remotely in 2020. Even with vaccine rollouts and a decline in COVID-19 cases, more than 4.7 million people in the U.S. continue to work re motely at least half the time.
mental health needs, establish trust and neverWorkmicromanage.isimportant, but it’s not some one’s only priority. Give your staff mem bers the grace to do what needs to be done while also caring for themselves.
hen the COVID-19 pandemic hit in 2020, the corporate world had to shift abruptly. Jobs that were once done exclusively in-office were now shifting to a work-from-home model to maintain safety. The situation left many business owners either scratching their heads or in a full-blown panic.
Work-life balance is key
Flexibility also extends to allowing your remote workers to choose where they get to work from. Working from your living room? Great. Working from the beach? Awesome! As long as the tasks get done on time, location shouldn’t matter. Remote work is inherently task-driven rather than time-driven.Businesses should not only recognize the value employees bring to the compa ny but also understand boundaries and
Ways to make remote work work
By Irina Papuc and Zach Boyette
It’s safe to say remote work is here to stay and will only continue to become more popular with advancements in technology and changing employee priorities. So how
It starts with emphasizing flexibility, establishing effective communication and encouraging bond-building among employees.
It starts with emphasizing flexibility, establishing effective communication and encouraging bond-building among employees.
W
• 23% of those surveyed would take a 10% pay cut to work from home permanently.
• After COVID-19, 92% of people surveyed expect to work from home at least one day per week and 80% expected to work at least three days from home per week.
Just like in marketing, there will al ways be changes to make in order to keep growing and improving. Achieving a per fect remote work culture won’t happen overnight, but there are definitive steps to take to get there. It’s about balance. Someone may love working from their couch and someone else might find it hard to separate work from home and actually clock out at 5 p.m. As business leaders, it’s important to help establish that balance,
• A mere 20%-25% of companies are paying some of the cost for home office equipment and furnishings.
• 59% of respondents said they would be more likely to choose an employer who offered remote work compared with those who didn’t.
A poll by Buffer showed that nearly onefifth of all remote workers felt lonely and isolated at times. It’s easy for workers to feel as though they’re stranded on an is land without support.
Overall, employees must feel seen, heard and valued. Continuously look for feedback and improvement ideas from the team to maintain good company culture and remote work culture.
Loom is a video messaging tool that allows you to record your camera, micro phone, and desktop simultaneously. It is a great way to explain a task in detail, pres ent business goals or ideas, and answer questions in a faster and more efficient manner than messaging.
An estimated 36.2 million Americans will work remotely by 2025, according to Future Workforce.
Contact them at innfeedback.com.orpapuc@innfeedback.comirina.zach.boyette@
Despite physical distances, teams also should be given several opportunities for company
• 81% of those surveyed believe their employer will continue to support remote work after COVID-19.
This new world is upon us, and with these tips you’re ready to thrive in the re mote work world.
September 2022 » InsuranceNewsNet Magazine 57
• People have been meeting by video calls 50% more since COVID-19.
There are no “URGENT!” messages, no expectation that an internal query will be answered instantaneously, and more free dom to focus on a specific task at a time. With a team located in different regions and time zones, asynchronous commu nication is essential. This also encourages proper and efficient planning across de partments.Thereare
support and guidance, one-on-one meet ings, and open communication with their employees. It is their responsibility to answer questions, provide feedback, and motivate at all times. Keeping employ ees guided, supported, incentivized and praised can work wonders for good remote workHappyculture.workers = Happy customers = Happy company, right?
Keep communication channels open and make sure your employees know that there are no silly questions or details too small to hash out. However, establishing that employees are allowed to do work on their own and that meetings are kept to a minimum also will boost productivity.
WAYS TO MAKE REMOTE WORK WORK BUSINESS
Remote work: What people are saying
Cultivate a thriving remote culture
Teams also must adapt to the idea of asynchronous communication. By defini tion, asynchronous communication is “the transmission of data, generally without the use of an external clock signal, where data can be transmitted intermittently rather than in a steady stream.”
several tools available to re mote teams to stay organized and running smoothly, even with asynchronous com munication.Slackisamessaging program that offers chat rooms organized by topic, private groups and direct messaging. ClickUp is an all-in-one project management suite for keeping track of assignments and dead lines and tracking progress.
• Remote employees save an average of 40 minutes daily from commuting.
Irina Papuc and Zach Boyette are co-founders and managing partners at Galactic Fed.
offer support, keep communication open, and trust that you hired your employees for a And,reason.inthe end, your bottom line might thank you for it. According to a recent Stanford University study, people who worked remotely at least some of the time reported being about 9% more efficient working from home than they were work ing from the office.
Managers should continuously offer
Source: Owl Labs
Establishbonding.Slackchannels to discuss top ics such as books, movies, fitness and art, and schedule team meetings to share fun facts, good news and distress. Fostering these friendships in a remote work envi ronment helps the company continue to thrive and grow.
• During COVID-19, close to 70% of full-time workers worked from home.
• People are saving on average close to $500 per month being at home, resulting in savings close to $6,000 per year.
Most clients do not communicate with advisors until there is a renewal or claim, although clients likely will want a pleas ant experience during this time. Leverage specific modes of communication at the right time. For example, using video
Effective listening: You must be able to hear what your clients are asking for and offer them the right coverage. Listen carefully when clients speak about themselves, and then you will come to know what they actually want and need — whether it’s education, marriage, a retirement fund or any other priority. It is only when we listen intentionally that we come to know clients’ priorities, so encourage your clients to speak about themselves.Makeita rule in your practice that if you speak for 10 minutes, your clients should speak for about 40. Listen with an open mind and look for opportunities to sell. Catch the point about what clients actually want, and then it will be easier for you to recommend coverage accordingly.
Rapport building: Rapport is hard to define. It’s not being nice or sympa thetic, and it’s not being liked. It’s more about building trust, confidence, and a
Bhiman Das, LFII, BSc (Hons), is a 32-year MDRT member and has been in the business marketing field for more than 45 years. Bhiman may be contacted at bhiman.das@ innfeedback.com.
consistent communication with clients and prospects builds trust and empathy. Strong communication allows you to ensure your prospects buy the right coverage and understand the policy’s con ditions. Consistently communicating in a way that leverages your knowledge allows you to maintain the relationship with your clients, periodically educating them about the importance of insurance coverage. This inspires clients to not only retain your services but also to become active, loyal clients.
Visual: Visual communication is used for representing ideas or informa tion through visual aids such as charts, graphs, diagrams, pictures or props.
Verbal: Being able to explain your policies to clients in a clear and simple way. Explain what type of coverage they need and why.
By Bhiman Das
58 InsuranceNewsNet Magazine » September 2022 INSIGHTS The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.
Written: Write effective letters, brochures and copy on your own web site. Strong communication makes your marketing tasks much easier and much more effective.
sense of ease and connection with your clients. It’s the ability to bring your cli ents around to your way of thinking and help them see an issue through a per spective similar to your own.
Proactively reaching out to clients
Connecting with people and building relationships lead to active, loyal clients.
Communication plays a pivotal role in selling insurance, a role that can set you apart from the competition. Any conversation you have when meeting with a prospect or client, no matter the medium, should be impactful. When you communicate ef fectively, clearly and understandably, your clients become more trusting of you and yourMaintainingadvice.
The stronger rapport you build with your clients, the easier it will be to communicate — even when it comes to the most complicated policy concepts. Always listen actively and be able to break important policy concepts into concise, simple sentences. Ensure that your communication is client-centric and that you have the right technology to deliver communication more effectively for each Formerclient.President Gerald Ford stated, “If I went back to college again, I’d con centrate on two areas: learning to write and to speak before an audience. Nothing in life is more important than the ability to communicate effectively.” Most advi sors’ influence comes from the ability to connect with people and build relation ships. Becoming a better communicator takes initiative, courage and skill. No one gets better by accident. It takes desire and intentionality.Insurancemarketers must be confi dent, authentic and properly prepared. If you follow these suggestions, you’ll gain deeper connections, higher closing ratios, happier clients and satisfied producers.
conference technology when an in-per son meeting is not an option allows you to showcase your flexibility and keeps you from losing a touchpoint with a cli ent. This will strengthen the relationship and ensure clients fully understand the products.Typesof
Boost insurance sales? Improve communication!
communication include:
All interactions and client touchpoints should have a standard and well-defined communication strategy. Creating a strat egy serves a greater purpose as well — cre ating client loyalty. Your strategy should be based on clients’ communication prefer ences. For example, if some clients prefer holding in-depth conversations, make an effort to reach out to delve deeper into pol icy descriptions. Having a strategy in place will allow you to communicate with clients on a more frequent basis.
Nonverbal: Ninety percent of com munication comes from nonverbal cues. Be aware of your appearance, gestures and posture, as they affect your clients’ perception of you.
One
By Suzanne Carawan
Gonzales
Nathan Gonzales: Well, of course, advisors aren’t a monolithic vote. Where an advisor lives — in a city or rural area — whether they have a college degree and their race greatly impact which candidate and party they’re likely to support. Having said that, the most critical factor is that advisors take action and actually participate in the political process.
Why it’s important for advisors to be part of the political process.
SC: What do you see changing when it comes to who is running for office?
SC: What do you most want financial advisors to know about why their voice is especially important when it comes to building relationships with elected leaders?
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.
Each day, NAIFA works to be a strong advocacy partner to financial advisors like you who work with Main Street Americans to make understanding leg islation easy at the state, interstate and federal levels. To help drive awareness, we routinely partner with political pundits who can provide insightful breakdowns of the process and aid advisors in prepar ing for anticipated outcomes.
And while political pundits and pro fessional lobbyists play a key role in advo cacy, that also puts a layer of separation between the voter — in this case, you — and the outcome. Financial advisors often believe they don’t have a voice or a role to play because the work is being performed byNothingothers. could be further from the truth. Agents and advisors have incredible power, and every elected leader will listen to you because of what you do and who you serve — but only if you show up. We sat down with Nathan Gonzales, a renowned nonpartisan election analyst on congres sional, gubernatorial and presidential
September 2022 » InsuranceNewsNet Magazine 59 INSIGHTS
This two-pronged approach is a critical NAIFA initiative because we want finan cial advisors to be aware of the issues and get out to vote as well as to advocate to their clients about why they should exer cise their own right to vote.
The power of a financial advisor’s voice
NG: Women voters consistently make up a majority of the electorate, so they really are the kingmakers in our elections. Both parties are committed to recruiting women to run for office because they believe voters are willing to consider, and even want, someone besides the traditional incumbent.
they have a direct bead on how the proposed legislation would economically impact the friends and neighbors the elected leader represents.
Take advantage of our award-winning journalism, licensure and reprint options. Find out more at innreprints.com.
It’s particularly important for women who are financial advisors to understand the amplified power of their voice and how open the system now is for political en gagement. However, women often have to be recruited to run for office because, un like many men, women don’t assume voters want them to run or that it’s automatically their turn. Typically, women need to be asked more than once to run, but we need to continue to encourage more people to get involved in the process.
Like this article or any other?
of the topics routinely skipped in training and developing financial ad visors is explaining how important it is for you as a business owner to get out and vote. As a licensed professional, you should know that getting the word out about the im portance of being part of the political process is one of the most important initiatives you can undertake with your clients each year.
NG: Business professionals are uniquely qualified to provide feedback from the viewpoint of a specific population, and not just one opinion, because you have a clientele. That clientele serves as a microcosm of how the community will react to proposed legislation or regulation. Elected leaders pay particular attention to financial advisors because
elections, to talk about the impor tance of profession als being involved in politics as part of their duty as an entrepreneur and business owner. If you’re not familiar with Nathan Gonzales, you can review his resume, which includes appearances on PBS, ABC News, CNN, C-SPAN, Fox News, MSNBC and NBC’s “Meet the Press,” to name a few.
Suzanne Carawan is NAIFA’s vice presi dent, marketing feedback.com.zanne.carawan@inncontactedSuzannecommunications.andmaybeatsu
Suzanne Carawan: What should financial advisors know about the power of their vote?
60 InsuranceNewsNet Magazine » September 2022 INSIGHTS 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.
when you drill down, many underserved markets have greater insurance needs.
how they want is essential. Information, education and holistic financial planning are key to ensuring all Americans are aware of the importance of — and the need to own — life insurance.
» 48% of Black Americans acknowledge they don’t have enough life insurance.
Because September marks Life Insurance Awareness Month, it’s the per fect time to engage and educate consumers about the importance of life insurance. Connecting with consumers where and
This is why we created our Help Protect Our Families campaign. Now in its sec ond year, the campaign, which brings us together with seven other trade associ ations and 76 life insurance carriers and distributors, is designed to help our mem bers improve their reach to uninsured and underinsured Americans.
Source: LIMRASecure Barely or not at all secure
Nearly two-thirds of insured Americans say they feel financially secure, compared with less than half of those who are uninsured.
The
Overall, 41% of Americans say they don’t have sufficient life insurance coverage. But
Americans who own life insurance tend to feel more financially secure than those who do not ownOwnsinsurance life
» 44% of women believe they have a life insurance coverage gap.
We at LIMRA and LOMA will continue to partner with our members to minimize the number of uninsured and underin sured Americans. As an industry, we have a wonderful opportunity to help more individuals get the coverage they need to protect the ones they love.
COVID-19 pandemic high lighted the fragility of life and the need to protect the ones we love. According to LIMRA research, 31% of Americans say they are more likely to buy life insurance as a re sult of COVID-19. This percentage is even higher across many demographics, includ ing millennials (44%), Black Americans (38%) and Hispanics (37%).
» 47% of millennials live with a life insur ance coverage gap.
Doesinsurancenotownlifeinsurance 47%68% 53%32%
Each month, we share insights about key segments of underserved markets to high light the disconnect between consumer interest in and purchase of life insurance.
» 50% of LGBTQ Americans say they need (or need more) coverage.
Many population groups are underserved when it comes to owning life insurance.
» 45% of Asian Americans say they need more coverage.
In the 2022 Insurance Barometer Study, conducted by LIMRA and Life Happens, 4 in 10 families say they would face financial hardship within six months if the primary wage earn er died. For 1 in 5, it would be within just one month.
Making sure all Americans have the coverage they need
The good news is that we saw this in terest translate into record-high life insur ance sales in 2021. The not-so-good news is that we’re seeing early declines in sales in 2022 that have the potential to reverse a lot of that traction. Our research shows that just half of American adults have any life insurance coverage, a notable decline from 63% only a decade ago.
If a loved one should pass away, here’s who’s at risk: nearly 56 million women, 8.8 million Asian Americans, 20 mil lion Black Americans, 12.4 mil lion LGBTQ Americans and 34 million millennials.
By David Levenson
David Levenson is pres ident and CEO, LIMRA and LOMA. He may be contacted at son@innfeedback.com.david.leven
Our research also shows that people who own life insurance are more likely to feel financially secure. Nearly two-thirds of insured Americans say they feel finan cially secure, compared with less than half of those who are uninsured.
Partnership.
Agency Relationships Advisor ConsumerSupportTrust ww w. SimplicityGroup.com 2334646 -0822
Education. Value.
