InsuranceNewsNet Magazine | March 2024

‘Unretiring’ CEO leads F&G to growth — with Chris Blunt

PAGE 6

Telling the money story — with Win Havir

Women need advisors who can help them meet their changing needs as they go through their life stages.

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The Future Is Female

Change the financial landscape for women and their communities through Insurance with a Difference SM

Women who gain the tools to establish financial security often become a driving force for positive change. And with values-based insurance solutions from Royal Neighbors of America, one of the nation’s largest women-led life insurers, you can be the catalyst for this transformation.

LEARN HOW ON PAGE 5

The wealth landscape is changing, and you can change with it by expanding your reach to connect with more women through the products and services you offer.

By becoming an appointed agent and member of Royal Neighbors of America, an A-rated 1 insurance organization, you gain a distinct value proposition and a compelling story that sells by building trust and rapport that resonates with women.

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PRODUCTS

• Whole Life and Youth Whole Life

• NEW Ensured Legacy Final Expense, simplified issue whole life

• Term Life

• Annuities POSITIVE

• 265,000+ members improving communities

• 220+ chapters participating in grassroots volunteering

• $31.2M social good impact

• $1,724,481 total philanthropic spend

Turn to PAGE 5 to discover the strategic benefits of becoming an appointed Agent with Royal Neighbors® .

Visit InsuranceWithADifference.com to learn more today.

Benefits, including an optional Accelerated Death Benefit Rider for Chronic Illness

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For Agent Use Only — This document has not been approved under the advertising laws of your state for dissemination to individual purchasers.

NWL Lifetime Returns Select® (Policy form ICC19 01-1189-19 and state variations) is an indexed universal life insurance policy. Issued by National Western Life Insurance Company®, Austin, Texas.

An NWL illustration is the closest your clients can get to seeing their future without having a crystal ball.

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For Agent Use Only — This document has not been approved under the advertising laws of your state for dissemination to individual purchasers.

Policy and Riders not approved in all states. Certain limitations and exclusions apply. See policy, endorsements and riders for complete information. Accelerated Death Benefit Rider for Chronic Illness (ADBR-Chronic) (ICC19 01-3161-19 and state variations). Policy and Riders not approved in all states. Certain limitations and exclusions apply. See policy for complete information. See endorsements or riders for complete information. MKTG-2328-LTRS

NWL Lifetime Returns Select® (Policy form ICC19 01-1189-19 and state variations) is an indexed universal life insurance policy. Issued by National Western Life Insurance Company®, Austin, Texas. Policy and Riders not approved in all states. Certain limitations and exclusions apply. See policy, endorsements and riders for complete information. Accelerated Death Benefit Rider for Chronic Illness (ADBR-Chronic) (ICC19 01-3161-19 and state variations). Policy and Riders not approved in all states. Certain limitations and exclusions apply. See policy for complete information. See endorsements or riders for complete information.

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Addressing the gender gap in insurance and financial services

While insurance and financial services have traditionally been male-dominated industries, some progress has been made in recent years to address the gender gap, according to several studies. Women now make up roughly 50% of the workforce in the insurance industry, but they represent only 18% of C-suite positions. In the financial services sector, the proportion of women in leadership roles is 24% and is projected to grow to 28% by 2030. Only 1 in 20 senior vice presidents and 1 in 35 direct reports to CEOs in insurance are women of color.

The reality for women

Several factors contribute to the continued male dominance in insurance and financial services.

1. Lack of professional development opportunities. Women may not have access to the same professional development, mentorship and sponsorship opportunities as men, hindering their career progression. The fact that women only occupy about 1 in every 5 C-suite positions tells us that advancement has not been equitable in the industry.

2. Gender bias. Unconscious gender bias can influence hiring, promotion and compensation decisions, perpetuating the gender gap in leadership roles. Although this can be an insidious problem, diversity metrics reveal this is an underlying issue in the fight for equity.

3. Work-life balance. The demands of the insurance and financial services industries may conflict with responsibilities outside of work, such as child care and caregiving, making career advancement difficult.

4. Lack of gender diversity targets. Studies have shown that in recent years as many as 78% of insurance companies have lacked internal targets for gender diversity, which may contribute to the slow progress in achieving gender parity in leadership roles. This is a significant

problem. In order to solve any problem, that problem first needs to be identified and goals must be put in place. The lack of diversity targets in so many insurance companies means that there is little action intended to remediate the situation.

The future for women

Despite the challenges, there are reasons for optimism regarding the future of women in insurance and financial services.

1. Increased focus on diversity, equity and inclusion initiatives. Companies are becoming more aware of the importance of DEI initiatives and are taking steps to promote gender diversity in leadership roles. We regularly see new announcements from industry firms about their diversity initiatives. The issue is whether there is real action underlying these public announcements. Some progress has been seen in recent years, but certainly more progress must be made.

2. Women-owned businesses. Many firms have made efforts to recruit women into the business, but the record shows that women exit the business earlier, and in higher percentages, than men do. The growth of women-owned businesses in the insurance and financial services industries can help address the gender gap by providing opportunities for women to lead and succeed.

3. Mentorship and sponsorship programs. As more companies recognize

the benefits of gender diversity, they are likely to invest in mentorship and sponsorship programs that support women’s career development. Women control only about one-third of all financial assets in the U.S., but that is about to change. As part of the great wealth transfer, women are expected to inherit much of the $68 trillion in wealth that baby boomers are passing down, according to research by McKinsey. So bringing more women into the industry may be crucial as this wealth transfer takes place.

4. Flexible work arrangements. The increasing adoption of flexible work arrangements, such as remote work and flexible hours, can help women better balance their professional and personal responsibilities, potentially leading to greater representation in leadership roles.

Although insurance and financial services remain predominantly male-dominated fields, there is a growing recognition of the importance of gender diversity and the need to address the barriers faced by women. As the insurance industry continues to evolve, it is crucial that we champion the future of women and empower all women to reach their full potential.

John Forcucci Editor-in-chief

INTERVIEW

6 ‘Unretiring’ CEO leads F&G to growth Chris Blunt retired in 2017, but then decided he missed what he loved doing best: leading a team and a company to success. Now in his fifth year as CEO of F&G, he tells publisher Paul Feldman he believes his company’s future is unlimited.

By Susan Rupe

Women need advisors who can be there for them on the different stages of their journey.

IN THE FIELD

14 Telling the money story

By Susan Rupe Win Havir’s

family money story inspires her to serve a diverse client base and promote greater representation in the industry.

LIFE

20 Having the beneficiary discussion now prevents problems down the road

By Brent Simmons

How the discussion can open the door to further conversations about life insurance and financial planning.

ANNUITY

28 Why benefit brokers should think like human capital managers do

By Chris Labrecque

Brokers must understand workers’ pain points and alleviate them.

ADVISORNEWS

32 Social Security planning is crucial to preparing clients for retirement

By Ernest J. Guerriero

The bedrock of forming a retirement strategy is helping clients figure out their Social Security benefit.

BUSINESS

Boost your confidence, embrace your uniqueness and transform your sales

Lloyd Lofton

Get creative, keep the prospect first and see your sales confidence soar.

THE KNOW

36 What works for one person might not work for another

By Joseph Templin

24 The annuity puzzle is especially puzzling for older retirees

By David Blanchett

and Matt Drinkwater Why does interest in annuities decrease as retirees age?

The path to success is different for each individual.

Economic fears drive retirees back to work

Retirement might not be the financially comfortable time many older Americans thought it would be, with a Nationwide survey finding one-third of retirees ages 60-65 considering returning to the workplace.

Half of those who are thinking about going back to work cite running out of money or the fear of running out of money as their top reason for doing so. Survey respondents say the biggest threat to their retirement security is inflation at 90%, followed by cuts to Social Security benefits (84%) and cuts to Medicare/Medicaid benefits (83%).

There is a significant gap between the realities of current retirees and the expectations of adults ages 60-65 who are still working. These include unrealistic estimates about basic living expenses, retiring earlier than planned and receiving less in Social Security benefits than expected.

Bad investments, extravagant purchases, tapping retirement savings early and waiting until after age 30 to start saving were cited as actions that most harmed their retirement security.

QUOTABLE

The risks of allowing inflation to persist still far outweigh the risk of triggering a recession.

— Mark Higgins, senior vice president for Index Fund Advisors

than in risk-based commercial plans, according to the Moody’s report.

However, Medicare Advantage’s profitability may be shrinking, especially for payers with a smaller MA presence. Between 2019 and 2022, the profit margin in MA declined from 4.9% to 3.4%, while earnings per member declined 28%.

EXAMINING THE NATION’S RACIAL WEALTH GAPS

The Federal Reserve’s recently updated Survey of Consumer Finance 2019-2022 analyzes post-pandemic trends — particularly as they affect racial wealth gaps.

In 2022, Asian Americans had a typical family wealth of $536,000, the highest of any race or ethnicity, and nearly twice the typical white family’s wealth of $285,000. But these six-figure wealth assets did not include either Black or Latino households. Instead, a typical Latino family held only about 20% of the wealth of the typical white family (about $61,600), and Black family wealth was even lower at $44,900, only 15% of the wealth held by white families.

“Taking a slightly longer-run view, since the Great Recession the typical Black and Hispanic family has had between about $10 to $15 of wealth for every $100 held by

DID YOU KNOW ?

the typical white family,” the report continues. “This ratio has closed only modestly in the past two surveys. The typical Black family went from having about $9 in wealth for every $100 held by the typical white family in 2013 to around $16 in 2022; the typical Hispanic family went from having about $10 in wealth for every $100 held by the typical white family in 2013 to around $22 in 2022.”

MEDICARE ADVANTAGE PROFITABILITY IS SLOWING DOWN

Medicare Advantage is still growing, but it could be becoming less profitable for payers, according to a report by Moody’s Investors Service.

Insurers’ earnings from MA were 2% lower in 2022 compared with 2019, despite membership gains and premium growth, Moody’s found. Insurers’ MA segments will likely continue to be pressured this year, as seniors use more medical care and reimbursement rates tick down for the first time in years.

Medicare Advantage plans now enroll more than half the eligible Medicare population. The program is valuable for insurers, too. Annual earnings per member reached $526 in 2022, about double the earnings in Medicaid and 45% higher

CAR INSURANCE RATES SOARED SINCE 2020

Wander around any car dealership and you can see how much car prices have gone up in the past few years. But the cost of insuring those cars also has gone up.

Car insurance rates have jumped 36% since 2020, according to the Bureau of Labor Statistics. The past year has been hitting policyholders especially hard, with rates for car insurance up 20% for 2023.

Analysts said insurance rate hikes go hand in hand with increasing vehicle prices, which left car owners more likely to repair their current vehicle than shop for a new one. In turn, an increase in demand for car repairs drove up the price of fixing vehicles, while repair shops deal with pay increases for workers and high costs of parts.

The average cost of car insurance in the U.S. stands at roughly $2,500 per year, according to Bankrate. In 2021, the average cost ran about $1,700.

India could become the world’s third-largest economy by 2027 with a gross domestic product of $5T

Targeting underinsured women consumers is good business and good for the community

If you’re a financial professional who wants to help individuals, families and communities while building a thriving business, then selling Royal Neighbors of America life insurance products may be exactly what you’re looking for.

Currently, women are underinsured1, and the industry is beginning to focus on this population of consumers in a way that will reshape how financial professionals serve customers and the types of customers they serve.

The increasing focus on women customers is also a result of the expected shift in wealth ownership, dubbed the “Great Wealth Transfer.” Currently, baby boomers

Financial professionals who focus on the concerns and priorities of women have discovered that women allocate their resources to organizations that align with their goals and values, and research supports this.4 Whether women are single, married, affluent or head of household, a common focus, particularly as their income grows, is on giving back to their families and communities.

Community-minded insurance organizations like Royal Neighbors of America — one of the largest women-led insurers in the U.S., founded by nine women almost 130 years ago — is poised for growth. Royal Neighbors’ mission of insuring lives, supporting women and serving communities

“I see younger people, especially young women, seeking out mission-driven organizations. And when I look beyond young people, I believe it holds true for all ages, particularly folks at Royal Neighbors. And people will give 150% when they believe in a mission.”

— ZARIFA REYNOLDS, ROYAL NEIGHBORS CEO & PRESIDENT

hold approximately 70% of the nation’s wealth,2 which will be transferred to future generations within the next two decades. This change will be transformative, particularly for women, who are projected to control $30 trillion in financial assets by 2030.2

Given these changing market dynamics, financial professionals must equip themselves to serve women as they take on prominent roles in making financial decisions for themselves, their households and their communities.

Because of women’s longer life expectancy, if they aren’t already the primary decision makers, they may become one upon the passing of their spouse. For example, within just one year of their partner’s death, 70% of women change their financial professional.3 Those financial professionals who are prepared to communicate with and address the needs of women may find it’s critical to sustaining and expanding their practice, both today and into the future.

provides financial professionals and their clients a way to have a greater impact on women and communities through its insurance products, philanthropy partnership and membership program.

According to Zarifa Reynolds, Royal Neighbors CEO & President, “what truly distinguishes Royal Neighbors is its commitment to translating its mission into action. It channels its resources to support charitable endeavors through financial grants to those engaged in meaningful work in their community.”

The organization honors those who extend a helping hand to others through initiatives like their Nation of NeighborsSM award. The most recent recipient, and the first appointed agent to receive it, exemplifies their Insurance with a Difference philosophy.

Royal Neighbors’ product offerings, designed to benefit individuals regardless of gender or economic status, echo its mission. Permanent life insurance and annuities

help empower women to establish financial security, enabling them to create legacies for their families and extend their support to their communities. Additionally, Royal Neighbors’ new final expense product (Ensured Legacy Final Expense) features a charitable giving rider that allows the Certificate Owner to choose a charity at the time of application and Royal Neighbors will make a donation to that charity in the event of the Insured’s death.

Royal Neighbors draws those who align deeply with its mission, as Reynolds highlights, “I grew up without a lot of money, so I was intrigued that Royal Neighbors was providing insurance to people who are often overlooked, and providing consumers with products that are easy to understand. We believe people should understand what they are buying.”

Working with Royal Neighbors, you and your clients benefit from simple product design, ease of doing business via e-apps and point-of-sale decisions, as well as an opportunity for community engagement.

As an appointed agent with Royal Neighbors, sharing their story and commitment to serving underinsured individuals and their communities is one way to build trust and rapport with clients, especially women.

So, why align with a women-led organization? In the words of Reynolds, “Because the whole society benefits.” •

To learn how you can grow your insurance business and make a difference in the lives of men, women and their communities, visit InsuranceWithADifference.com.

1 LIMRA, 2023 Life Insurance Fact Sheet, https://www.limra.com/siteassets/newsroom/liam/2023/0859-2023-liam-fact-sheet-2023_final.pdf

2 Pooneh Baghai, Olivia Howard, Lakshmi Prakesh and Jill Zucker, “Women as the next wave of growth in US wealth management,” July 29, 2020, McKinsey.com

3 Kristen Billows, “Don’t give female clients a reason to leave,” Oct. 4, 2022, fa-mag.com

4 Kate Dore, CFP®, “After the impact COVID-19, most women see money as a tool to effect change, survey shows,” June 28, 2022, CNBS Empowered Investor, https://www.cnbc.com/2022/06/28/most-women-see-money-as-a-tool-to-effect-change-survey-shows-.hmtl

‘Unretiring’ CEO leads F&G to growth

IUL — which F&G president and CEO Chris Blunt describes as “the Swiss Army knife” of life products — and annuities helped F&G have a great 2023 while the company adds RILAs to its product mix for 2024.

An interview with Paul Feldman, Publisher

F&G

CEO Chris Blunt started his career as a financial advisor with Shearson Lehman Brothers. (“If you remember that name, you’re old,” he said.) He eventually obtained an MBA at the Wharton School. He joined New York Life in 2007 and went on to become Investments Group president in 2015. “I spent 10 years there in different roles overseeing life and annuity, and asset management. It was really a great opportunity. I learned a lot and just really came to love the insurance business,” he said.

Blunt retired in 2017, but then decided he missed what he loved doing best: leading a team and a company to success. He “unretired” in 2018 to become CEO of Blackstone Insurance Solutions. “I went to Blackstone to help them set up their insurance solutions business” and then on to F&G as CEO, where he is “just wrapping up my fifth year.”

In this interview with publisher Paul Feldman, Blunt describes how he believes the company’s future “is pretty unlimited.”

Paul Feldman: F&G has had an amazing year. Why did it go so well?

Chris Blunt: I would say it’s the culmination of several years of laying the foundation around building out our distribution, adding products, having employees who are fired up and making some technology investments. And we’re in the sixth year of our investment partnership with Blackstone. All of that seems to be coming together during a period that’s a great environment for fixed annuities. Volatility is our friend, and you’re seeing advisors embrace volatility in a way that I think they haven’t done in the past.

Feldman: Blackstone has been a big part of F&G’s success. Is that helping free up some assets? How is that working out?

Blunt: Blackstone has been involved since November 2017. The partnership has done a great job of expanding the menu of opportunities for us. Blackstone doesn’t own F&G or have any ownership stake or say in the carrier. What we do outsource to them — and they’ve done a fantastic job of it — is picking underlying investments. We get to leverage several hundred

talented credit professionals, structuring experts, dealmakers. For us, it has been a great model and the results have been exemplary in terms of getting incremental yield while bringing down the portfolio’s overall credit risk.

Feldman: Fixed indexed annuities are a big part of F&G’s sales, but life insurance sales have been growing for your company as well. Tell me about that.

Blunt: I love our life business; it’s been growing exponentially. When I first joined the company, we were doing less than $30 million of recurring premium and now we’re doing about $160 million, and we’re on our way to $200plus million of recurring premium. Part of the reason for that is we play in the middle markets, where there are young families and a lot of rapid growth. Our only product is indexed universal life, but we think we’re quite good at it and have delivered good results there. It’s a great business for us and one where we see continued growth.

Feldman: For one product, that’s a lot of business.

Blunt: Yes, it is. And again, I come back to the fact that it’s a classic middle-market solution. We call it the ultimate Swiss Army knife. It has some death benefit protection, some savings component and, as you know, living benefits are increasingly important, particularly in the middle market, where there are only so many dollars that can go toward premiums and protection. You want to get as much bang for your buck as possible.

Feldman: You talked a little bit about technology. Has technology been a part of the growth at F&G, and where do you see that going?

Blunt: Technology has been a big part of our growth. We tagged our strategy with the acronym “GEM,” which stands for grow, engage and modernize. The grow part is obvious. We’ve grown our distribution channels, we’ve grown our product suite, we’re getting ready to launch into the registered index-linked annuity space. We’ve increased our investment options through our partnership with Blackstone.

The “E” is about engaging. The “M” has been about modernizing how we work. And for us, that has consisted of some significant investments in technology. When we were acquired by Fidelity National Financial in June 2020, they were incredibly supportive. Their whole model has been scaling up the title insurance industry and using technology effectively. We took a page from that playbook and made some significant investments in technology around workflow and different operating platforms, and we think it has had a real impact.

Feldman: It’s amazing that there are still so many paper applications around. You’d think the industry would be past that by now.

Blunt: Yes, we have very few paper applications on our end now, and I think most carriers are there, but you’re right, it still exists. I can’t think of an industry that is as backward when it comes to that process. So, there’s still a lot of work to do, but part of the reason we’ve seen the growth on the life insurance side is because it is now close to “instant issue.” Why it has taken decades to get to this point is beyond me, but it has.

Feldman: You mentioned that your “GEM” formula includes an “E” for engaging your employees. Your workforce is mostly remote, correct?

Blunt: We are. We have a beautiful office in Des Moines, Iowa. We have a permanent office in New York. There are a number of people there on any given day, but we don’t force folks into the office “X” days a week. And that was a strategic decision early on as we were emerging from COVID-19, related to how we want to compete in the marketplace. We view ourselves as a national carrier, not a regional carrier. We must decide whether we are looking for the best people and whether we want them to come into the office “X” days a week in a particular city, or whether we want the best people we can possibly get.

It’s philosophical for me. I’m a big believer that if you get the best athletes, create an environment where people like playing team sports, where you have an apolitical culture and where people enjoy

coming to work, you will win.

There are very few enforceable patents in our business. We all sell basically slightly different versions of the same stuff through the same folks. So we decided early on that culture will be where we will make our stand, and we will make our stand on getting the best people. And if they happen to be a seven-hour drive from our office, we still want to go after those folks.

Now, having said that, it puts other pressures on us. We started doing something called Connection Week, where we fly everybody into the home office, and it’s like a three-day festival. We have town halls, volunteer opportunities and lots of social events because people do want to get to know their colleagues — they want to have some human interaction. That has been a winning formula. It just takes a little more effort on our part to organize that and keep that momentum going.

Feldman: What other tools do you use to keep people engaged?

Blunt: We have invested heavily in something we call our leadership forum. We take our most senior leaders, and we do a half-day event. All we talk about is leadership. We don’t talk about budgets or how the business is doing. We talk about how you lead in this new world order. We have outside speakers, exercises that we do. The reality is we’re all figuring this out. None of us grew up as digital natives.

We were raised that when you walked to the water cooler, that’s where you shared information and you interacted with other people. Now it is a new world order. Some managers can make the leap. Others, perhaps not.

Feldman: You were recently ranked No. 1 for highest customer satisfaction by J.D. Power and Associates. What was the key to scoring No. 1?

Blunt: I come back to engagement. We just added some great leaders who have a tremendous passion for improving customer experience. So that would include Senior Vice President Catherine James leading our operations folks in technology. And it would be the wholesalers that interface with our advisors and agents, and our product people. It’s across the board. It’s a team effort to win something like that.

I was particularly proud of the team because we’ve had outsized volumes. Everybody’s volumes are up, but we have more than tripled our sales in the last five years. We’ve doubled our sales in the last three years. The growth here has been furious. If anything, you would have expected that we would have dropped a little bit. If you create a good environment and employees are happy, they will exude that with their clients. And the reverse is true. If you come into work and you’re miserable and you don’t want to be there,

it doesn’t matter how hard you might try to give good service to your clients — it’s going to seep through.

Feldman: What advice do you have for advisors in today’s environment?

Blunt: Keep it simple. We have a love of complication in our business.

When I started in asset management, I wanted to show the client how smart I was. I wanted to show them upside/downside capture and I wanted to drown them with statistics. And I think it had the opposite impact. It was more intimidating, scarier for clients.

Sometimes I see that same tendency in insurance. We like to talk about illustrations, technical features; we all want to pretend that we’re actuaries, and at the end of the day, we have a near monopoly on something that’s critically important: guarantees. We need to come back to the fact that these are insurance products. ... They’re not comparable to other solutions.

I say this all the time: There are only two industries that get to use the “G” word without going to jail: banks and insurance companies. Banks can guarantee shortterm returns. Insurers are the only ones that can guarantee long-term returns, and that can take longevity risk and mortality risk off the table. It means going back to the basics, spending more time listening to clients, spending less time on the technical minutiae of what our products do and explaining to clients that these products are tools. Here’s the plan, here’s what you’re trying to accomplish and here’s why this is a good solution for you. I think the best advisors do that naturally.

Feldman: You recently conducted an “unretired” survey. I thought that was an interesting term. What were some of the findings?

Blunt: A little history on where it came from. I myself “unretired.” I retired from New York Life in May 2017. I was a relatively young retiree. I was 55 years old and kind of excited about controlling my own day and figuring out what to do next. It can be a daunting challenge. It’s a great luxury to be in that position of, hey, I can do almost anything.

One of the things that hit me is I had confused financial independence with

Chris Blunt outside the New York Stock Exchange.

retirement. I’ve always loved working. I’ve always enjoyed leading teams and being part of a team. I think a lot of folks go through that thought of, “Oh wow, I don’t have to work.” And then they have a little bit of this realization of, “But I actually like working. Maybe I just want to work in a different way.”

I have this theory that with so many work-at-home opportunities now, careers will extend and that will be a good thing. We have a shortage of productive workers in the country. I think a lot of people, particularly of my generation, will probably choose to extend their working years.

We thought it would be interesting to see whether we could go out and do some in-depth research. Is this all anecdotal, or is there real evidence of this? What we found was remarkable. Roughly half of retirees and pre-retirees either have come out of retirement or have either are actively contemplating coming out of retirement — and not for the reasons that you would think. It’s not money. In the majority of cases, they’re saying things like: “I miss intellectual stimulation. I miss being part of a peer group. I miss that team sport aspect of working on something with others.”

Feldman: Yeah, I think there’s only so much golf you can play and boating that one can do.

Blunt: Yeah, I joke that I’d probably still be retired, but my wife beat me at every single sport. She picked up golf and quickly surpassed me. She’s better at tennis and pickleball. And so, yes, I ran out of sports that I could be competitive in.

A lot of folks, particularly of my generation, are looking for some guidance on what to do next. I always say to advisors, don’t limit your role. Share your perspective on ways other clients have navigated retirement, share stories about what other folks are doing in retirement. That can be impactful and a great way to build even deeper relationships with clients.

Feldman: How impactful is the economic environment on your business?

Blunt: Volatility is our friend. People tend to think rates up, good; rates down, bad. Historically, that’s true for our industry, but less so in the annuity business. It’s a

spread lending type of business. I think advisors are increasingly seeing fixed annuities as a fixed income surrogate. And they’ve realized that owning bonds, mutual funds or even individual bonds can be supervolatile.

I think the environment will be great, but I think it actually extends well beyond just the level of interest rates. I think there’s a sea change and people are figuring out there’s a role for these products

We need to go back to the fact that these are protection products; we’re just protecting different risks. You can take a portion of your assets and turn it into a pension — clients all know that’s important and a good thing to do. The most common reaction you get is, “I didn’t know you could do that.” And these are successful, highly educated people. And they don’t know that you can do that. So, I keep going back to “keep it simple.” Talk

in portfolios. And it’s not just the traditional insurance advisors who believe that. Traditional stockbrokers and more market-oriented financial advisors are embracing that.

Feldman: What can we do as an industry to better promote annuities? They sometimes get a black eye in the media. But the amount of assets annuities have protected over the years is incredible.

Blunt: I just keep coming back to the sizzle, not the steak. Sometimes we’re our own worst enemies and we get involved in trying to explain the minutiae of every single rider — just go back to what is the purpose. Why does our industry even exist? It exists for risk pooling. Nobody else can do that.

So going back to using words like “guaranteed lifetime income,” using words like “take risk off the table,” that’s what our industry’s about. And I think maybe because of the explosion of variable annuities over the years, there was an attitude that we want to be like the other guys and talk about our industry the way the asset managers talk about themselves. That was a big mistake.

about the benefits, don’t talk about how the watch gets made. This market is massive. It’s trillions and trillions of dollars.

Feldman: With how quickly you’ve grown over the past five years — and doubled in the past three years — how big can you go?

Blunt: The biggest limiter is always capital. If you believe because our company has done well and our stock has done well, we can always raise additional equity capital, well, that can be a fairly big “if.”

Sometimes you can and sometimes you can’t. But with that as a caveat, I still think our potential for growth is unlimited. We talk about the market being fixed, deferred annuities. But when you talk about products like RILAs, you’re now competing with mutual funds. We’re launching RILAs this year. That’s a multitrillion-dollar industry. Sometimes — and I say this to my peers — we must get out of our own heads. Sometimes we’re way too close to this, we’re too into the weeds, and we have to step back and realize we’re part of a much bigger universe, which I think is pretty unlimited.

The New York Stock Exchange welcomes executives and guests of F&G Annuities & Life Inc. To honor the occasion, Chris Blunt, president and CEO, rings the opening bell.

Women need advisors who can help them meet their changing needs as they go through their life stages.

BY SUSAN RUPE

Women manage their households, their careers and their money. But sometimes their lives don’t go as expected. That’s when Katie Warchol comes in.

Warchol is an Edward Jones financial advisor in Clayton, Mo. She specializes in working with “women whose lives may not have turned out quite the way they thought they would.

“Whether they’re divorced, widowed, never married, didn’t have the family that they thought they would have — because that’s me and that’s also my assistant,” she said. “This is a topic near and dear to our hearts. These are the type of women and the type of clients we like to serve.”

unique about serving women is that when you serve women, you’re also protecting their families — their children, their spouses and even their parents.”

Warchol’s clients range from women in their 20s who are starting their careers and beginning to accumulate wealth to women in their 90s who want to protect their assets for the remainder of their lives.

“We want to serve women throughout their life span, to help them be successful and take care of themselves,” she said. “It has to start early. We love to get female clients as early as we can to provide education, provide support and then help them grow throughout their lifetime and their different needs and different life stages.”

levels of engagement and are able to focus on their long-term financial goals.

The study showed that when married women become uncoupled — whether through divorce or becoming widowed — their financial confidence plummets dramatically. While 42% of married women feel confident about reaching their financial goals, that number drops to 35% and 29%, respectively, for women who are divorced and widowed. Among never-married women, 37% feel confident about reaching their goals.

Warchol is one of many advisors who believe financial professionals must serve women throughout all the seasons of their lives – not just when they find themselves in a financial crisis or when they’re ready to begin retirement planning.

To understand a woman’s financial needs, an advisor must understand “where she’s coming from,” Warchol said.

“Women are less likely to make financial course corrections than their male counterparts. They’re less likely to have paid down debt, they’re less likely to have had a financial plan or a financial budget, they’re less likely to have purchased an annuity or life insurance or long-term care insurance or to seek financial advice,” she said.

Warchol said she believes the first way advisors must serve women “is to understand that sometimes life doesn’t turn out the way we planned.”

“We also need to listen to women’s unique stories,” she said. Women are interested in investing, Warchol said, but they are more interested in “what is our money doing for us in our world?”

Warchol said she believes the financial services industry must recognize that women have different protection needs throughout their lifetimes.

“Women need help protecting themselves because we may end up being the divorced woman, the never-married woman, the widowed woman, so we must learn how to protect not only ourselves but our families,” she said. “What is also

Warchol said it can be difficult for a woman to take that first step and seek advice.

“They’re often scared and intimidated,” she said. “An advisor who can break things down, keep it simple, and be empathetic and caring will help a woman feel comfortable and then confident so that she can have that financial plan to achieve her goals and dreams.”

Relationships and confidence change over time

Women are motivated by their immediate financial needs. But women’s relationships with money change as their relationship status changes over time, according to Equitable, which released a study on the impact of relationships on women’s finances earlier this year.

The study showed women experience challenges and changes in their level of engagement with their finances throughout the course of their lives. Notable shifts occur as their relationship status moves through being single (never been married), married or uncoupled (divorced or widowed).

Nearly half of divorced women (46%) and most widowed women (61%) feel farther away from achieving their financial goals as a direct result of becoming uncoupled. That effect is strongest in younger women who are widowed. Among millennial widows, 81% feel farther away from their goals, compared to 64% of Generation X widows and 54% of baby boomer widows.

The study showed major life changes, including divorce and widowhood — and the shifts in women’s financial confidence that can accompany those changes — often prompt women to take a more proactive approach to their financial wellness. Other common reasons women become more involved in managing their finances are an increase in income, becoming a parent and considering retirement.

None of these findings came as much of a surprise to Jody D’Agostini, an Equitable financial advisor and senior partner with The Falcon Financial Group in Morristown, N.J.

“These findings were a validation of what I see in my practice,” she said. D’Agostini said that about 80% of her clients are women. “Holistic financial planning is the core of my business. And that means meeting women where they are.”

In addition, the study showed that specific pivot points, such as divorce or becoming a parent, tend to spark women’s increased involvement in their finances. Women who work with a financial professional report increased confidence about managing their finances, have higher

No matter a woman’s relationship status, all women have their individual financial concerns, she said. “You have to be mindful of what those concerns might be and pay special attention to make sure you put your client at ease and make a plan around those concerns.”

The study, she said, “did a fine job of pointing out what thought bubble is on everyone’s head when they come to see

Warchol

D’Agostini

Pivotal moments spur increased involvement in financial matters.

Earning more money is the #1 reason single women get more involved in financial decision-making; 51% report doing so.

Children also spur increased involvement. Married (28%) and divorced (21%) women are most likely to report becoming parents as the start for getting more involved in financial decision-making.

Divorce is a critical time — 71% of women indicate they got more involved in financial decision-making after their marriage ended.

Nearing retirement is an expected catalyst to get more involved (Gen X, 26%; Baby Boomers, 45%) in finances, proving more influential than changes in relationship status.

The death of a spouse is also a key event — 74% of women became more involved in financial decisions after being widowed.

you that sometimes we don’t uncover unless we probe a little bit more.”

“I work with a lot of divorced women, and the fear is ‘Am I going to end up living out of my car?’ Or a woman who is widowed fears she will be out on the street, she’ll outlive her resources. When you know someone is coming in with those fears, you can work around that.”

D’Agostini said many of her widowed clients did some financial planning with their husbands. But their husbands’ death changed those plans.

“Many widows want to support what their husband had in place,” she said. “But sometimes that planning was for them as a couple. Now that the husband is gone, everything has changed. Maybe his pension went away. Now they have only one Social Security benefit instead of two. You must be mindful about women’s insecurity over those issues and reassure them as you make new plans and help them move on.”

D’Agostini said she works with many female clients who are in a state of transition, “because that’s when people need planning.”

“This is the point when people say, ‘I don’t know what I’m doing here. I don’t know about my finances or how we create income from what I have. Will my money last? Will I have to get a job? Should I keep my home?’ They have a lot of decisions ahead of them, and we help them make those decisions. And it’s more of a data-driven decision based on the financial plan they helped create with me.”

D’Agostini said an advisor who wants to work with women must create a safe space for them to voice their concerns.

“The No. 1 thing you must do is build trust,” she said. “Many times, the planning process helps develop that trust because we get to know each other well as we develop the plan. I make sure I hear them, and I make sure I’m getting buy-in from them.”

The second thing advisors must do to become a safe space, she said, is to maintain confidentiality.

“I let people know I’m a fiduciary and explain what that is, and then I really reinforce confidentiality,” she said. “I let them know that anything we say here is between the two of us, and I think that goes a long way in making clients feel comfortable.”

A plan leads to confidence

Often, women may have different thoughts and behaviors around money than most men do.

“But women drive better outcomes than men do,” said Connie Weaver, Equitable’s chief marketing officer.

However, she said in order to drive those better outcomes, “women must feel included, and they have to trust and be part of the solution.

“But once women get a plan, they’re confident,” she said. “Our study showed that more than two-thirds of women, once they start working with an advisor, feel more financially confident in making the decisions they need to make. And that’s a

Weaver

powerful statistic. As advisors and women come together, there’s a sea change in the levels of confidence and trust.”

Women are natural problem solvers who want advice, Weaver said.

“Our study showed that women aren’t just focused on asset accumulation. They’re looking for growth as well as protection.”

Women also tend to think of everyone but themselves, she said.

“Women think about the big picture. They think about their kids, they think about their parents, they think about everybody else but themselves. So if an advisor can meet a woman where she is and start the dialogue, they can come up with a holistic life plan.”

The industry must “take the intimidation factor away for women” by starting to engage with them at younger ages, Weaver said.

“Women will reach out and start to look for advice when they get that first big promotion — when they’re in their late 20s or early 30s — when they go from living paycheck to paycheck to actually having money to invest.”

She said advisors who focus on engaging with women, “whether it’s in early adulthood, midlife or later in life, will separate themselves from the average players in the long term.”

Helping widows

Megan Kopka had been a financial planner for a number of years when her husband was diagnosed with ALS and died four years later, leaving her widowed at age 38 with teenage children. Kopka took her experience and used it to create her own firm, Kopka Financial, in Wilmington, N.C.

“Widowhood touches everything,” she said. “Everything is broken, everything is different.”

Four years after her husband’s death, Kopka was inspired to begin working with widows and caregivers. She serves clients of all ages.

“I want to build a world of compassionate advisors,” she said. “Compassionate means you have empathy, the ability to hold space and listen. Compassion takes it a step above empathy, where you have the ability to help.”

hire two professionals immediately after their husband’s death — a grief counselor and a Certified Financial Planner.

“You need professional financial help because your income sources have changed, your tax status will change, your insurances have likely changed and you need to update beneficiaries,” she said. “At some point as you are going through the things you need to do, you will come up against something that’s super hard, and you will need someone in your corner.”

Kopka also uses her experience as her husband’s caregiver prior to his death to work with female caregivers.

“I see two things happening in caregiving when a financial planner gets involved,” she said. “The caregiver always wants to make sure that they have enough money for their loved one to have the best care possible. And the patient wants to make sure that their wife or spouse is well taken care of in the future.”

Kopka said she believes widows must

Caregivers face a lot of unknowns and Kopka said she helps them answer some big questions.

“What do you do when you have large, near-term medical costs that you’re unsure of coupled with a timeline that you might be unsure of? What’s the best way to position assets now so that they last for the rest of your life?”

Kopka said that advisors who want to serve widows should get involved with organizations such as the Modern

Women think about the big picture ... they think about everybody else but themselves.

So if an advisor can meet a woman where she is and start the dialogue, they can come up with a holistic life plan.

Widows Club to better understand the widow experience.

“Most widows want to become empowered about their finances,” she said. “If you work with a widow, you will be working with someone who is coming back from tragedy and trying to triumph. They are moving out of crisis into living again — and living on their own this time. They want to know whether they have enough money to live the lifestyle they have now. If they don’t, you need to let them know. Nobody wants to hear about decreasing their current standard of living, but you’re exacerbating a bad situation if you can’t deliver that information.”

Widows need a support system, Kopka said, and an advisor can be a trusted part of that system.

“Introducing your widowed client to another widow is not unusual at all. And widows find each other, we get paired up together. When I was a caregiver, I was paired up with a lot of ALS widows. It is so natural for people who are in your circle to know other people in similar circumstances. Be part of that network to get support for your widowed clients.”

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

Kopka

WIN HAVIR’S

family money story inspires her to serve a diverse client base and promote greater representation in the insurance profession.

By Susan Rupe

Every individual and family has a money story — that history or narrative that inspires the way they save and spend.

For Winona “Win” Havir, that money story begins in World War II, with her widowed grandmother desperate to save her children from Japanese invaders threatening their home in China. Havir’s grandmother put her three children on an American ship leaving the port of Shanghai in hopes of saving them from the Japanese. One of those children was Havir’s father.

But the ship was captured, and Havir’s father ended up in a wartime prison camp. Three years later, the Americans liberated him and took him to the Port of Los Angeles. Relying on the generosity of strangers, he finished high school, worked three jobs while attending college, married and started a family, and went on to have a 40-year career in education.

Havir’s father’s story formed the foundation of her work: first as a teacher, then as an advisor who worked with a culturally diverse population and now blending the two professions to serve public school employees. She is executive vice president, business development with Educators Insurance Resource Services of The Horace Mann Companies and is based in St. Paul, Minn. Horace Mann is the largest financial services company serving America’s public school employees.

Her work in promoting diversity in the insurance and financial services profession was recognized when the National Association of Insurance and Financial Advisors presented her with its 2023 Diversity Champion Award.

Havir was born and raised in Los Angeles, growing up with her China-born father and her Hawaii-born mother. She recalled that even though her father had a Ph.D., the constant cry in her family was “We have no money.”

“All the time, all we heard was, ‘We have no money,’” she said. She recalled standing in line with her family to obtain

government-issued cheese and powdered milk. But she said that even though her parents kept saying they had no money: the family always had a roof over their heads and didn’t go hungry.

Still, even after obtaining bachelor’s and master’s degrees, Havir said the feeling of not having any money didn’t leave her.

“Money is a very emotional issue when it comes to making decisions,” she said. “For some of us, money brings up some gut-wrenching reminders. My money story was unhappy, even though I was able to afford some things.”

Later, she learned that her parents had taken out life insurance on her, which enabled her to attend college and graduate debt-free.

Despite the feeling of having no money, Havir said her parents taught her to always be grateful for the opportunities she

education in addition to the education that traditionally takes place in a classroom.

Her college roommate’s now-husband suggested that Havir would be a good candidate to launch an insurance career in a part of East Los Angeles where half the population was Chinese and the other half was Latino. At his urging, she completed a LIMRA questionnaire to determine her propensity to succeed in the business, and she scored well on it.

“There was an insurance agent who served that area, but he died in a motor vehicle accident,” she said. “The company was looking for someone who knew that community and could speak the languages. I thought this would be a way to touch and change more people’s lives, while at the same time I could make a greater financial difference for my family and myself.”

“Money is a very emotional issue when it comes to making decisions. For some of us, money brings up some gut-wrenching reminders.”

had and to look for ways to give back.

“We were so grateful to be in this country, to be in a place where we will not just survive but we will thrive physically and financially,” she said.

Havir’s parents also taught her the importance of education, of learning to speak several languages and speak them well, and of presenting oneself well.

“My parents spoke Chinese at home but they didn’t speak to us kids in Chinese because they didn’t want us to end up speaking English with an accent. They knew that to be accepted by the community and society, we had to speak English well,” she explained. “My father enrolled me in French classes when I was in elementary school, then I had Spanish classes in middle school. When I reached high school, my father said he wanted to send me to school in China to learn Chinese.”

An education beyond the classroom

After attending school in China, Havir completed her college education and began teaching school in Los Angeles.

She soon realized that many of her students and their families needed financial

One of the first things Havir did after she took the job was change her name to something easier to pronounce.

“Nobody could ever pronounce ‘Winona’ correctly, so I shortened it to ‘Win,’ and I went by the name ‘Win Harding,’” she said. “It sounded very ‘insurance’ and competent and aggressive. People would call the office and ask to speak to Mr. Harding. And I would say, ‘He’s not here; he can’t help you, but I can.’”

Scaring away the ‘financial ghosts’

Early in her career, she realized that her clients needed more than insurance. Many of them needed to go back to financial basics.

“In some of the countries where my clients came from, they didn’t trust financial institutions,” Havir said. “So here in this country, people would work two or three jobs and put money away, but their money would end up stashed away in the freezer or under a mattress. People didn’t have bank accounts, they didn’t use credit, they paid for everything in cash. So, what happens is that people become financial ghosts. When the time comes that they need to get a loan or they need to have

the Fıeld A Visit With Agents of Change

someone pull their credit score — they don’t have one, it’s like they don’t exist.”

Havir said many of her early clients needed help with applying for jobs, applying for a loan and buying auto or renters insurance. From there, she could discuss the importance of protecting their families with life insurance.

“Every day was an emotional high or low, helping clients handle what’s going on in their world, and then helping people understand about the plan they had in place and how that plan would execute, what would happen to their world should a devastation occur,” she said.

“In this business, every day is different. You never know what will happen as it relates to the risk protection plan you have in place for a client and when it needs to kick in.”

Hooked on NAIFA

Havir worked her way up the corporate ladder for the carrier she started working for at the beginning of her career. She joined NAIFA in 1997 at the invitation of a woman who was a life underwriting supervisor at her company.

“She was also a woman of color, and she said, ‘You need to go to this meeting,’” Havir recalled. “She knew that my goal was to place a minimum of 100 paid life policies to protect 100 families every year. She said, ‘I believe this organization can help you become even better.’”

Havir attended her first luncheon meeting, “and that was it — I was hooked.”

What attracted Havir to NAIFA was that the organization “isn’t only about furthering your own career. It’s about helping people become the best insurance agent or advisor that they can be.”

She serves on NAIFA’s board of trustees and is a trustee liaison to NAIFA’s Diversity Council. She is a past president and charter member of the Greater Twin Cities chapter of Women in Insurance and Financial Services. She has been a panelist

and speaker at NAIFA’s annual Diversity, Equity and Inclusion Symposium.

“One of the things I wanted to do at NAIFA is to see more agents and advisors in the communities who look like the people we serve,” she said.

Educating the educators

Havir’s husband, Gary, is marking his 45th year with Horace Mann, and he convinced her to join the company.

“He said, ‘You have experience working in the inner city, you come from a multicultural background, you’re a former teacher. This would be a perfect place for you,’” she said.

At Horace Mann, Havir said, “We educate the educator by helping them understand what financial benefits may be available from the school district and how to make the best use of their hard-earned dollars.”

“We want to help public school employees keep more of their money in their pocket and make sure they take full advantage of the 403(b) plans that their school district might have available to them,” she said. “We want to help them have a secure retirement. We want to help them feel financially secure so that they can focus more of their energy on helping kids.”

She and her husband mentor several students, and she said those students come to them when their families need help navigating life’s obstacles. For example, one student called her in the middle of the night because the family’s electricity had been cut off and they didn’t know what to do. She helped them negotiate a payment plan with the utility.

It’s another way that she educates the public and follows her father’s admonition about giving back.

“My goal was always to be an educator, not just in the school system but to educate people about how money works and how to recreate people’s money stories — not stories of scarcity but stories of plenty and of gratitude,” she said.

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

Insurance products issued by Minnesota Life Insurance Company

Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.

Product features and availability may vary by state.

Life insurance products contain charges, such as Cost of Insurance Charge, Cash Extra Charge, and Additional Agreements Charge (which we refer to as mortality charges), and Premium Charge, Monthly Policy Charge, Policy Issue Charge, Transaction Charge, Index Segment Charge, and Surrender Charge (which we refer to as expense charges). These charges may increase over time, and this policy may contain restrictions, such as surrender periods. Policyholders could lose money in this product.

Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender and will reduce both the surrender value and death benefit. Withdrawals may be subject to taxation within the first fifteen years of the contract. Clients should consult their tax advisor when considering taking a policy loan or withdrawal.

These materials are for informational and educational purposes only and are not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. Securian Financial Group, and its subsidiaries, have a financial interest in the sale of their products.

Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues.

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

For financial professional use only. Not for use with the public. This material may not be reproduced in any way where it would be accessible to the general public.

Bryon Holz presents Havir with the NAIFA 2023 Diversity Champion Award.

Life insurance applications up for first time in 4 years

Application activity for U.S. life insurance grew at a rate of nearly 3% in 2023 compared with the previous year, showing the first uptick in almost four years, according to the MIB Group.

insurance activity for ages:

• 0-30 was up 5.4%

• 31-50 up 5.5%

• 51-60 down 1.9%

• 61-70 down 2.5%

• 71+ flat at 0.7%

Source: MIB Group

The 2023 year-to-year comparisons are impacted by the decline in 2022 applications. MIB reported that total activity last year was down 2.8% compared with 2021, flat compared with 2020, but up 4.4% compared with 2019.

The growth in 2023 was largely driven by younger age groups, MIB said, with application activity for ages 0-50 accelerating, while ages 51-70 saw declines and ages 71+ saw flat activity.

Twenty-nine percent and 26%, respectively, said they have either an individual term life or whole life insurance policy, while 13% had multiple forms of coverage.

QUOTABLE

As agents, we need to have difficult conversations. Otherwise, why are we here?

— Jenee’ Green, senior partner, personal lines, with AMH Group

20% WHO PLAN TO PASS DOWN DEBT ARE UNINSURED

More than 20% of American adults who plan to leave unpaid debt behind for their loved ones to inherit do not have life insurance coverage, according to a survey from Policygenius. The study found that just under 50% of Americans expect their spouses, children or parents to have to cover their debt when they die

The Policygenius survey found 46% of Americans believe “that if they died today, their loved ones would inherit their debt.” The company emphasized the value of life insurance as “one way to cover shared debt in the event that one of the co-signers dies.”

However, 21% of respondents said they do not have life insurance. Another 5% said they do not know whether their household has life insurance coverage.

Most respondents (38%) said at least one adult in their household has group life insurance through an employer.

89%

PRIVATE EQUITY STAKE IN LIFE INSURERS DRAWS NEW ROUND OF CRITICAL REPORTS

Private equity firms continue to stalk insurance company takeovers, and critics say the potential for a financial disaster grows along with that trend. Americans for Financial Reform is the latest group to raise the alarm about what it deems to be risky private equity investment of policyholder funds.

By the second half of 2023, private equity firms owned $774 billion in life insurance assets, or 9% percent of the life insurance industry, according to AM Best. Likewise, PE firms are estimated to manage $5.7 trillion in global assets, giving these firms ample ability to buy up even more insurance companies, AFR noted.

The private equity insurance-buying spree dates to the 2008 financial crisis but picked up significantly in recent years. At the end of 2022, private equity firms owned 137 U.S. insurance companies with $533.7 billion in assets, representing 6.5% of total U.S. insurance assets, according to data from the National Association of Insurance Commissioners.

US INSURERS TO EMBRACE MORE PORTFOLIO RISK IN 2024

More than half (62%) of U.S. insurers say they are willing to take more investment risk in 2024 despite mounting concerns about election year politics, fiscal/monetary policy, persistent inflation and volatility, according to a Conning survey.

Following a year of significant inflation, falling bond portfolio values, rising interest rates and the growth of artificial intelligence, U.S. insurers still indicated they would further embrace risk.

Insurers said they will allocate more to private assets such as private equity (61% said they will add exposure), private credit and private placements (56% will add exposure), and real assets including real estate (52%) and infrastructure (48%). Overall, 51% said their portfolios would consist of at least 20% in private assets in two years.

For an agent/advisor there is one very important sale that can propel their career and their income like no other.

I am talking about Future Purchase Options (FPO) on a disability insurance sale. Just think what this feature can do on one sale, then multiply it for an entire book of business!

FPO’s work like this:

You sell a young upward income person disability insurance with the FPO rider. This guarantees them the right to buy more disability insurance every 3 years without any medical questions. The only requirement is that their income is higher. This allows the agent to make another sale with full first-year commissions every 3 years! Proof of income is the only underwriting requirement.

You now have a reason to follow up with your client and sell more disability insurance. It’s an ideal time to review their life insurance as well. Keeping their disability coverage up with their income is an important feature for the client. Your renewals, persistency bonuses and income from disability insurance increase with each additional sale.

Here are 3 anecdotal stories proving that FPOs are better than compound interest!

1. I had a broker call who told me he had just received a $6,000

commission check and was afraid to cash it. He did not know what it was for. I called the carrier and found out 5 owners of a company he had sold to 3 years ago exercised FPO options through the mail with the disability carrier, doubling their disability coverage. And his commission was $6,000!

2. I personally have a client who was referred to me for disability insurance. I called her every 3 years and exercised several FPO options. She married another very successful investment banker and after 15 years as a disability client, I sold each $10,000,000 permanent life insurance policies. These are the largest individual life sales I have ever made.

3. I helped a retired broker with a life client and sold $1,000,000 20-year term for $900 a year. I noticed the client was a 50-year-old physician making $400,000. I asked him if I could review his disability insurance and found that all he had was what he purchased as a resident, $3,500 a month. I quickly sold him another $10,000/month for a premium of $6,600.

Our agency has made a career helping agent/advisors sell disability insurance and then earning their life insurance business. You can do the same thing by using disability insurance as a door

opener to life insurance sales. Just think about all the business applications for disability insurance. For every life sale there is a disability sale. Start by promoting disability insurance to your life insurance applicants! Learn from your peers. Many of the best life insurance agents have also sold disability insurance. The renewals are better than most any other product. Retired life agents always wish they had sold more DI, because those are the only checks they still receive in retirement — disability insurance renewals!

Diversified Brokerage Specialists has been in business for 75 years. We invented the Business Overhead Expense disability policy in 1955. You can count on Diversified Brokerage Specialists to help grow your business and improve your success in the life and disability insurance markets!

Jeff Mohr, RHU, CLTC Chief Executive Officer Diversified

Having the beneficiary discussion now prevents problems down the road

Asking clients about their beneficiaries can open the door to further discussions about life insurance and financial planning.

By Brent Simmons

One key question about financial planning often is overlooked by most clients: To whom will you transfer your acquired income and assets at the end of your life? I know, it’s not the most comfortable topic to discuss. But it’s not enough to simply know who the intended recipients are. The question that clients must answer is: “Who are your beneficiaries?”

This is also a topic we, as brokers, don’t discuss enough with our clients. But it represents a clear opportunity for us to provide some much-needed education and reminders. So, I thought I’d share a few key tips that might be worth sharing with your clients.

Let’s start with life insurance

When clients purchase life insurance, a key question they must ask themselves is: “Who is my beneficiary?” If the client does not have someone in mind that they want to protect, they’re missing one of the key reasons for buying life insurance in the first place. I bought my first policy when I was newly married. Buying a new home or having children are other common triggers for adding life insurance because there is an increased dependence on your income. But again, it’s all about the beneficiary.

Assigning beneficiaries

So, where should clients start when thinking about their beneficiaries? Begin by asking them to take an inventory to identify

their financial products that allow beneficiary designations. Financial products to review might include:

» Individual life insurance.

» Employer-sponsored life insurance.

» Retirement accounts.

» Pension plans.

» Bank accounts.

» Savings bonds.

Next, encourage clients to think about their present circumstances compared with when they first made the beneficiary designation — they should also be mindful of any recent life-changing events.

» Did you make the designation when you began employment at your present company years ago?

» Are you married, or have you been divorced?

» Do you now have children and/or stepchildren?

» Has a family member recently died?

» What if something happens to your primary beneficiary?

Do they know?

Every year, millions of dollars in life insurance benefits go unclaimed because beneficiaries are unaware of the coverage or don’t have basic information about the policies.

Overall, just 39% of baby boomers surveyed say they feel they are prepared for their roles as life insurance beneficiaries. This drops off among younger beneficiaries. Just 30% of millennials and only 22% of Generation Z surveyed say they are ready.

Half of all those surveyed said they are listed as a beneficiary on a friend’s or relative’s life insurance policy. But some people don’t know about the policies at all. Overall, 21% of Gen Zers and 20% of millennials say they don’t know whether they’re named as a beneficiary.

Source: National Association of Insurance Commissioners

That last question is a good one. A contingent, or secondary, beneficiary is a recipient of the proceeds if the primary beneficiary predeceases your client — and naming a contingent beneficiary may be worth considering.

Finally, clients obviously must consider who should not be named as a beneficiary. Naming minors or people with disabilities as beneficiaries may lead to a tricky situation. Assets left to a minor often require a court-appointed custodian to manage the funds. In addition, it’s important to consider that an influx of income could disqualify a person with disabilities from receiving government benefits based on a change in their financial standing.

designation such as “all my surviving children/stepchildren” can be used. A “per stirpes” option — one in which your client’s estate is divided equally among the beneficiary’s descendants if the original beneficiary dies before your client — can be attractive when the desired outcome is for assets to pass equally among the branches of a family. This is exactly what happened to me when my mother and uncle predeceased my grandmother. Instead of my mother’s portion of the inheritance being distributed equally between her surviving brother and sister, her share was passed down equally to her children.

Depending on the size of the policy or the amount of the proceeds, incomplete or

When clients purchase life insurance, a key question they must ask themselves is: “Who is my beneficiary?”

If minors and persons with disabilities are not ideal beneficiaries, it leads us to the next question: “Who can be a beneficiary?” The answer may surprise you. Nearly any person can be named a beneficiary, even your estate. However, some providers and state laws may impose more strict requirements. Can’t think of a beneficiary at this time? There is always the possibility of naming a charity or a trust as a beneficiary. I’m sure your client’s name would look great on a local youth sports field, hospital wing or school building!

Make sure to coordinate with the estate plan

One piece that many clients often forget about when it comes to beneficiaries is coordinating the beneficiary designation with their estate plan. Although it will not overwrite a life insurance beneficiary designation, the estate plan can help to convey instructions for how the proceeds are to be distributed.

In certain instances, it may make sense to specifically name beneficiaries instead of using more broad language such as “all my children” or “wife/spouse.” This is especially important when an ex-spouse or stepchildren are part of the picture.

To save time, and make things clearer, a

inaccurate beneficiary designations could cause delays in receiving funds or could result in unintended tax consequences for recipients. Although a surviving spouse may receive the proceeds tax-free, if a spouse is deceased at the time of the client’s death, the resulting inheritance left to an estate may result in a taxable event to remaining heirs.

Millions of dollars in life insurance proceeds are unclaimed due to beneficiaries not even knowing about the policy naming them. Many beneficiaries don’t know the insurer’s information or the location of the policy!

Are you seeing the education opportunity here? Some of it is complicated. But some of it is just a matter of sharing simple reminders. Bottom line: It is important for clients to communicate with their beneficiaries and make them aware. Reminding your clients of these beneficiary best practices can go a long way toward alleviating issues and challenges further down the road.

Brent Simmons is a regional sales manager with Trustmark. Contact him at brent. simmons@innfeedback.com.

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ANNUITY

Rising interest rates pushed annuity sales to another all-time high in 2023, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey.

Powered by unprecedented fixed annuity sales, total annuity sales topped $385 billion in 2023, 23% higher than the record set in 2022.

Rising interest rates are driving sales in at least two big ways, said Bryan Hodgens, head of LIMRA research. In a trend that drove sales in the fourth quarter and is likely to continue in the first quarter of 2024, consumers are buying annuities to lock in better rates before the Federal Reserve cuts rates.

Likewise, annuity holders are rushing to exchange contracts for new annuities with better rates.

Annuity sales also set a record in the fourth quarter. Total annuity sales were $115.3 billion, a 29% increase from the fourth quarter of 2022 and 23% higher than the record set in first quarter 2023, LIMRA said.

AGENT USED CONN. WOMAN AS ‘A BANK,’ FAMILY CLAIMS

A former Connecticut insurance agent defrauded a Connecticut woman out of more than $800,000, using her as “a bank” to compensate others in a kind of Ponzi scheme, according to her brother.

John Michael Horvath, formerly of The Insurance Education Center Agency, pleaded guilty in July to defrauding at least eight victims out of more than $1.18 million between July 2015 and April 2021, according to the U.S. Attorney’s Office.

Horvath had persuaded the woman to transfer her Merrill Lynch account to Allianz Life, based in Minneapolis, which

DID YOU KNOW ?

he then used to purchase annuities, said Chris Hunt, her brother. Federal authorities also said Horvath advised clients that they could get better rates of return through alternative investments rather than existing annuity contracts.

NEW ANNUITY PLATFORM TARGETS ADVISORS

Traditional advisors who might be warming up to annuities have a new product source to consider with Flourish Annuities. Annuities have often been inaccessible to independent registered investment advisors due to the many complexities and pain points of offering insurance products.

Problems ranging from client and advisor user experience challenges to licensing and regulatory requirements, as well as a lack of fee-based products that align with RIA billing standards, have sharply limited RIA

QUOTABLE

Our data found that financial advisors’ younger clients want to retire at 61 – three years ahead of the generation before them.

— Julia Bartak, a financial advisor with Edward Jones

adoption of annuities in client portfolios. To open this asset class to advisors, Flourish Annuities has alleviated the three key pain points historically preventing annuity integration: burdensome, complicated paper applications; commission structures that conflict with a fiduciary approach; and RIA insurance license requirements.

‘ANNUITY KING’ SENTENCED TO PRISON FOR $6.3M FRAUD

A Tampa, Fla., judge sentenced Phillip Roy Wasserman to 15 years in prison for overseeing a fraud that cost retirees millions. Wasserman must turn himself in on Feb. 23. Wasserman said he will appeal to the Court of Appeals for the 11th Circuit, adding, “And we will win.”

Judge Charlene Edwards Honeywell’s decision bars Wasserman from working in the insurance industry ever again.

Wasserman was convicted May 15 on nine felony counts. The three most serious — wire fraud, mail fraud and conspiracy to commit wire and mail fraud — all carried lengthy prison terms. The self-styled “Annuity King” in Florida promotions, Wasserman ran a fraud totaling $6.3 million, the government said.

In a separate order, the judge granted the government’s motion for forfeiture of more than $6.3 million from Wasserman.

More than 76% of Americans ages 55-95, with savings of at least $100,000, said they thought it was valuable to own a guaranteed lifetime income product.

The annuity puzzle is especially puzzling for older retirees

Why does interest in annuities tend to decrease as retirees age?

By David Blanchett and Matt Drinkwater

Buying an annuity, a product that provides income for life, offers increasing value as you age, as opposed to attempting to self-insure longevity risk. This is due to “mortality pooling,” a principle that leverages the increasing odds of death with age to provide larger payouts.

For example, when you reach age 65, the payout rate for a life-only immediate annuity is typically around 7.5% (as of Dec. 27, 2023, according to CANNEX). By age 80, this rate can increase to about 11.8%, an increase of about 58%. Despite these growing benefits as one ages, interest in annuities paradoxically tends to decrease with age.

If people fully grasped the benefits of risk pooling, we might expect their interest in annuities or similar products to rise with age. However, reality paints a different picture. Survey data, such as that from the 2017, 2019, 2021 and 2023 LIMRA Consumer Retirement Investors surveys, show that while about 60% of respondents in their 40s are interested in annuities, interest drops to around 20% for those in their 70s (Figure 1).

Despite the overall decline in interest as age increases, there has been a consistent uptick within each age group over time, with a notable rise in 2023. For example, only 30% of respondents ages 60-69 were interested in annuities in 2017 versus 41% in 2023. That’s definitely progress, and it suggests that the public is gradually recognizing the potential benefits of annuities.

Part of the increase in 2023 could likely have been attributed to stock market volatility and the notable rise in interest rates; however, the trend is still present (although less pronounced) if we focus on only 2017, 2019 and 2021. These survey results

Note: Question wording: “Would you consider converting a portion of your assets or an additional portion of your assets into a lifetime-guaranteed annuity in retirement?” (Yes/No). Source: Analysis of 2017, 2019 and 2021 LIMRA Consumer Surveys, and the 2023 LIMRA Retirement Investors Survey.

suggest that although interest in annuities is growing, a significant barrier remains among older investors, who theoretically would benefit most from these products.

One reason for this pattern could be a mismatch between how long people think they will live (their subjective estimates) and their actual life expectancy. Some might underestimate their lifespans, seeing less need for long-term income security. On the other hand, studies indicate that retirees often overestimate their longevity.

The Health and Retirement Study offers insight into this discrepancy by comparing individuals’ subjective longevity estimates with actual survival probabilities. Figure 2 compares respondents’ subjective estimates of living 15 more years (e.g., surviving to age 75 for someone who is currently 60 years old, and to age 85 for

someone who is currently 70 years old) to the actual (objective) probabilities, using data from the latest Health & Retirement Survey wave (primarily conducted in the year 2020). Subjective estimates exceed objective reality for younger retirees, and this relationship flips at older ages.

This interplay between subjective and objective estimates would imply that younger retirees should be less interested in lifetime protection products, such as annuities, since they often underestimate their lifespan. Yet the reverse is true — annuity interest seems to decline, not rise, with age. This counterintuitive trend suggests that other factors, such as retirees already having sufficient income or certain psychological biases, may influence the decision-making process.

What could potentially explain the fact

What could potentially explain the fact that people increasingly think they are going to live a long time as they age but become increasingly disinterested in annuities?

Figure 1 — Willingness to Annuitize Assets, by Age and Year

Source: RAND HRS Longitudinal File 2020 (V1). Accessed Dec 8, 2023.

that people increasingly think they are going to live a long time as they age but become increasingly disinterested in annuities? One possible explanation for the lack of interest in annuities is that today’s retirees are already in fairly good shape in terms of lifetime guaranteed income sufficiency (e.g., they already have sufficient benefits). However, fewer and fewer future retirees are expected to enjoy this level of coverage.

Other decision-making tendencies and biases could be playing a role as well, such as loss aversion, temporal discounting and endowment effects, according to LIMRA’s 2020 report “Behavioral Finance and Retirement Income Preferences.” For people in their 40s and early 50s, the idea of converting some of their assets into lifetime-guaranteed income 20 to 30 years in the future is abstract and probably seems like a great idea (perhaps seen as a kind of “personal pension”). But when they actually reach retirement, annuitization becomes a much more real — and much more difficult — decision.

The relatively low level of annuity sales today, especially for those strategies focused on providing lifetime income, makes it clear that the “annuity puzzle” — the question of why more people don’t purchase annuities despite their benefits — persists. Although interest in annuities is increasing gradually, a significant gap remains, particularly among older retirees. This suggests a need for better education about the importance of incorporating longevity into retirement income strategies.

One potential path is emphasizing how

annuitization, especially at older ages, is increasingly consistent with retirees’ own relatively optimistic forecasts around longevity. In other words, providing context on how annuities complement investors’ longevity expectations appears to be a potential path to at least solving part of the puzzle.

Although the demand for annuities is on the rise, more effort is needed to educate potential buyers, especially older ones, about their benefits. As people become more aware of how annuities can secure their financial future, we may see a shift toward more widespread adoption, which could lead to greater financial security and peace of mind for many retirees.

David Blanchett, PhD, CFA, CFP, is managing director, portfolio manager and head of retirement research at PGIM, the global investment management business of Prudential Financial. He is also an adjunct professor of wealth management at The American College of Financial Services and a research fellow for the Retirement Income Institute. Contact him at david.blanchett@innfeedback.com

Matt Drinkwater, PhD, FSRI, FLMI, AFSI, PCS, is corporate vice president, annuities and retirement income research for LIMRA. He leads the annuity and retirement income primary research program. Contact him at matt. drinkwater@innfeedback.com.

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Figure 2 — The Probability of Surviving 15 Years Beyond the Current Age

Health insurers add ‘insurrection’ and ‘riots’ to exclusions

Be forewarned: If you injure yourself while participating in an insurrection against the government, don’t expect your health insurer to pay your medical expenses.

Very quietly, a number of health insurance companies have added “insurrection” and “riots” to their list of excluded benefit payments, apparently in reaction to the Jan. 6, 2021, attack on the U.S. Capitol.

It’s not known whether any of the actual Jan. 6 insurrectionists filed injury or sickness claims but, in keeping with insurers’ strategies of limiting risk and exposure, the companies have sought to head off any future potential losses from political riots. Or perhaps they’re expecting some political unrest in this election year.

The 2024 Cigna Health Care insurance policy excludes “ treatments of an injury or sickness which is due to war, declared or undeclared; riot; or insurrection.” Aetna also excludes losses “caused directly or indirectly by invasion, insurrection, riot, civil strife, or civil commotion.”

Similarly, this year’s UnitedHealthcare policies say it will not cover for illness, treatment or medical condition due to “war declared or undeclared.”

FEDERAL MANDATES BRING HEADACHES TO HEALTH PLAN ADMINISTRATORS

The Consolidated Appropriations Act of 2021 is imposing new disclosure requirements on health plan providers and bringing the potential for big lawsuits. Signed into law Dec. 27, 2020, the CAA includes provisions designed to increase transparency in employee health benefit plans by amending the Employee Retirement Income Security Act of 1974. It has taken time for the compliance deadlines to come due on some parts of the law.

This is more than just another federal mandate for health plan administrators. Major class-action lawsuits are in the offing if health plans are not managed according to changes in the law.

One provision in the bill that impacts

health benefits brokers states that health plan brokers and consultants must provide specific service and compensation disclosures for their contracts or arrangements to be considered “reasonable.”

Plan fiduciaries must review those disclosures prior to entering into, extending or renewing the arrangement and concluding the compensation is reasonable. That part is not new. But the new law requires public disclosure of the amount that is being paid to a provider for certain procedures.

MEDICARE BENEFICIARIES NEED TO SAVE MORE FOR EXPENSES

Many older Americans find out the hard way that just because you have Medicare doesn’t mean you don’t have medical expenses. In fact, a report from the Employee Benefit Research Institute finds that the amount of savings Medicare beneficiaries could need for health expenses increased again last year. Some couples could need as much as $413,000 in savings.

The predicted savings target for Medicare beneficiaries to cover

QUOTABLE

In health care, you can’t improve what you don’t know, and the way to know is with data.

— Dr. Meena Seshamani, director of the Center for Medicare

premiums, deductibles and prescription drugs in retirement rose in 2023, representing a slight increase from the $383,000 savings target last year.

To have a 90% chance of meeting their health care spending needs in retirement, a man will need to have saved $184,000, and a woman will need to have saved $217,000. Couples enrolled in a Medigap plan with average premiums, meanwhile, will need to have saved $351,000 to have a 90% chance of covering their medical expenditures in retirement. A couple with particularly high prescription drug expenditures will need to have saved $413,000 to have a 90% chance of having enough money to cover their health care costs in retirement.

NO SURPRISES ACT PROTECTED AGAINST 10M SURPRISE BILLS

During the first nine months of 2023, the No Surprises Act protected Americans from more than 10 million surprise medical bills, according to a sur vey by AHIP and the Blue Cross Blue Shield Association.

However, the survey also showed that use of the in dependent dispute resolu tion process skyrocketed during that same time.

Before the law took ef fect, federal agencies estimat ed that 17,000 claims would go through the IDR process annually. In fact, between April 15, 2022, and March 31, 2023, 334,828 disputes were initiated through the IDR portal, nearly 14 times greater than the initial estimate.

More than $600 billion is lost to smoking each year, looking at both medical expenses and lost productivity.

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Pass

Why benefit brokers should think like human capital managers do

Simply enrolling workers in coverage isn’t enough. Brokers must understand and address workers’ pain points.

By Chris Labrecque

Benefit brokers face some significant challenges in 2024. Employer health insurance costs are expected to jump 6.4%, KFF reports, after years of steady increases. This is a result of higher hospital labor costs trickling first to insurers and then to employers. Meanwhile, a recent Federal Reserve survey showed fewer Americans adults can afford a $400 emergency expense.

This means benefit brokers may find themselves with the difficult tasks of not only helping employers choose the right benefits for their employees but also helping them find tools and programs to ensure employees can access those benefits as needed. The ultimate goal is to help employees choose and access benefits to

promote optimal health, engagement and productivity.

Given this reality, the most successful benefit brokers will be those who think like human capital managers do. Here’s a look at what that will mean.

What does human capital management involve?

In addition to handling the core benefits advisory work of juggling technology, compliance and logistics, human capital managers also think in terms of strategy. Which benefits will help employers attract and retain workers? How can brokers craft benefits packages that help employees optimize their physical and mental health and workplace performance?

And how do national, local and hyper-local (specific to your workplace) trends affect the answers to these questions?

This is more than benefit brokers are expected to know on their own. Employee feedback is essential to creating and adapting benefits packages that lead to

the best possible outcomes. For example, a benefit broker might note national reports about rising health care costs and add a question about paying for care to an employee survey.

Employees might express frustration with rising pharmacy costs, too-high deductibles or the high cost of mental health care. From there, benefit brokers can decide how to ease those frustrations. New plan offerings? Better educational resources to help employees navigate existing offerings? Additional payment support benefits?

In addition to thinking about how they can support employees, however, benefit brokers embracing the human capital manager mindset must also think about how to empower employees.

Empowering employees: Benefits + Info + Access

What does empowering employees look like from a benefit broker/human capital manager lens? The simplest formula

is making appropriate benefits available, equipping employees with the information they need to choose the right benefits, and ensuring that employees can access those benefits as needed.

None of this is necessarily new; what’s important to recognize for today’s benefits advisors is that accessibility is changing. For example, inflation continues to push prices upward, and health care is no exception. Meanwhile, the Federal Reserve reports wages aren’t expected to catch up with inflation until late next year.

This means that the same benefits options that worked for an employee population last year might be less accessible this year, simply for cost reasons.

Benefit brokers can help by making available benefits that empower employees to pay for care in more cost-effective ways. Health savings accounts and flexible spending accounts are excellent options to urge employers to offer. A newer entrant to the benefits space, a health payment account, is an employerfunded tool that lets employees pay with a card at the point of care, then repay over time without any interest or fees.

demand. For those who changed jobs or whose benefits changed in the interim, removing barriers to care is essential to facilitate re-engagement with their health and health care. That, in turn, is neces-

has moved us closer to that reality, we’re not there yet. Why not? Because there’s now so much data available, we must first overcome the challenge of processing it all.

The simplest formula is making appropriate benefits available, equipping employees with the information they need to choose the right benefits, and ensuring that employees can access those benefits as needed.

One big reason HPAs may be a crucial addition to the payment product mix is that they make funds available to employees from their first day of employment, whereas FSAs and HSAs only allow employees to use the money that they have already set aside or that the employer contributes.

We’re seeing evidence that a growing proportion of employees find value in the HPA model: Our most recent usage data shows that the user group with the largest growth in the most recent quarter was those making $75,000 a year or more. Moreover, the average cost of care that employees used their HPA to finance dropped from $132 in Q1 of 2023 to $118 in Q2 2023.

Empowering employees to seek care as needed may be particularly impactful now. While some people have sought care they deferred during the early years of the pandemic, there is still some pent-up

sary for early prevention, detection, and treatment of chronic illnesses that might otherwise become serious and costly problems.

Looking ahead: The coming role of price transparency

I mentioned the importance of engaging with national trends for human capital managers. I confess that I’d hoped, by now, one of those trends would be the emergence of a variety of digital tools — built with publicly available price transparency data — that would let employees proactively shop for care by cost.

Although the publication of health care prices by payers in the past year

One industry leader noted that “most payer pricing files on their own are too big to open on personal computers.” That means anyone who wants to build a customer-facing price comparison tool on aggregated data likely must go through a third-party intermediary that can process and provide streamlined access to all this data, which is updated monthly.

But that process is underway. Benefit brokers thinking like human capital managers would pay close attention to developments in the price transparency space, as the tools built on price transparency data will provide an incredibly powerful way for employees to manage costs on the front end. This will be a hugely empowering development.

A final thought for benefit brokers ready to embrace the role of human capital manager: Whether or not employees feel comfortable sharing their financial difficulties, know that many are likely experiencing difficulties. Multiple data sources show that accessibility and affordability are pain points and will likely remain so as health care costs continue to rise.

Making it easier for employees to access the care they need for themselves and their families is one of the most powerful things that benefit brokers can do to improve retention, productivity and engagement.

Chris Labrecque is chief customer officer of Paytient. Contact him at chris.labrecque@ innfeedback.com.

Have you seen my advisor?

Consumers favor flat fees for wealth planning

When it comes to paying for financial planning and investment management, consumers say they like flat fees. A Hearts & Wallets survey showed wealthier households with $1 million or more in investable assets found flat fee pricing attractive, especially for financial planning.

Flat fees are appealing because consumers appreciate their transparency, said Hearts & Wallets’ CEO and founder, Laura Varas. The consumer knows exactly what they are paying. That’s important because there’s a lot of confusion around pricing.

More than one-third of consumers do not know how they pay for their primary and secondary saving and investing relationships. And in 20% of relationships, customers believe their saving and investing solutions are free.

The advisor industry has a head count problem

Advisor head count was largely unchanged in 2023 as the number of advisors grew by just 2,706 in 2022, according to Cerulli.

Over the next decade, 109,093 advisors plan to retire, Cerulli said — a whopping 37.5% of industry head count and 41.5% of total assets Meanwhile, the rookie failure rate hovers around 72%. As the industry grapples with such a low success rate for new advisors entering the industry, firms must grow their talent pipeline and better communicate the role and training timeline of a financial advisor.

According to Cerulli, only a small portion of rookies (13%) join the financial advice industry as the first job in their career; however, 40% of rookie advisors work in the financial services industry prior to becoming an advisor. Networking and referrals could be as critical for firms building a pool of potential advisor candidates as it is for those looking to become financial advisors — nearly one-third (32%) of rookie advisors were referred by a personal contact.

Different strategies to meet different expectations

Different generations have their own expectations about how and when to retire. So it’s only natural that those expectations are placing an increased focus on personalized investment strategies, according to Principal Financial Group.

Principal found that the majority of Generation X and millennials are planning on a “phased” retirement before the age of 65, while baby boomers and Generation Z prefer an immediate retirement where they stop working entirely. In addition, each generation expresses a preference to retire at an earlier age than the prior generation, with baby boomers stating their preferred retirement age as 68, Gen X as 64, millennials as 59, and Gen Z as 55.

@&#* &%!$

Authorities warn of AIgenerated investment fraud

Financial authorities are sounding the alarm about the increase in investment frauds that supposedly involve artificial intelligence. They range from promoting platforms claiming to have AI-designed investment strategies that guarantee ample returns to AI-generated videos impersonating family members, alleged business leaders and public officials.

The SEC’s Office of Investor Education and Assistance, NASAA, and FINRA also called on users to disregard social network influ-

The research also found that increased personalization, as well as tailored savings and investment strategies that take into account an individual’s financial goals, lifestyle, health care needs, dependent-care obligations, retirement-income expectations and other unique factors, can help achieve improved financial security in retirement, no matter whether someone wants a traditional or a phased retirement.

Nice save!

52% of American adults said they saved the amount of money they wanted to in 2023.

Source: New York Life

encers who present themselves as supposed specialists to give investment advice.

Social media posts have skyrocketed that promise high investment returns through AI models that can predict the best stocks to invest in with little or no risk — often a classic sign of fraud, the agencies warn.

Social Security planning is crucial to preparing clients for retirement

Understanding the amount of money your client will receive from Social Security is the bedrock of forming a retirement strategy. •

KErnest J. Guerriero

nowing your client is the foundation for a successful financial plan.

Part of that process is to understand the client’s current financial positions, including the amount of money the client (and spouse, if applicable) receive from Social Security in the form of retirement, disability and survivor benefits. This article assumes the client has covered employment and focuses on a retirement claiming strategy for a client and spouse. Understanding these benefit amounts will assist the advisor and their client in identifying any gaps in the current financial retirement plan, whether they are investment-related or protection-related or both.

Advisors go through a considerable amount of training, and much of that training is around legal issues, the regulatory environment and company-specific products. When it comes to Social Security, that is not the focus of training; we know what is available, and few have specialized knowledge.

Additionally, various company-sponsored proposal platforms do not provide the precise Social Security retirement planning strategies that are available to clients, including any tax impact. The advisor and client must rely on making important strategy decisions solely from information found on the client’s Social Security statement.

Providing accurate Social Security strategy estimates based on the client’s specific situation is critical to finding solutions that meet the client’s financial and protection goals.

Let’s look at a hypothetical married couple, Thomas and Mary, with a complete understanding of their Social Security situation as we review claiming

strategies to maximize their income from Social Security. We will also show them the importance of proper protection planning as a survivor benefit.

The following Social Security analysis has been prepared in accordance with standards established by the National Association of Registered Social Security Analysts. The RSSA Roadmap provides benefit estimates by considering historical earnings, future assumptions, and conditions provided by the client and advisor to determine optimal Social Security benefit claiming dates and strategies. The RSSA Roadmap is based on current Social Security law.

The facts for Thomas and Mary are listed below. From this information, we can review four claiming strategies.

Lifetime benefits are shown as the present value of all future benefits. Annual and monthly benefits are shown in today’s dollars and are based on the year the younger spouse reaches age 71.

Although this information is important, the question remains: when to file? This will show the advisor and client which combination is optimal as well as the timing to claim such strategy. The purpose here is to maximize the retirement lifetime income benefit.

In addition to the lifetime benefits, an important planning topic is the “what if?”

What if one spouse predeceases the other? Social Security provides survivor benefits for spouses and other dependents of the worker.

As with the claiming strategy, the survivor amount and rules surrounding this benefit are often misunderstood and can vary based on when the worker begins retirement benefits, the age at death and the age the survivor begins survivor benefits. The survivor benefit, which depends on the claiming strategy chosen and other factors, is shown below.

Visualizing all this for the client is now made easy; with the myriad of claiming strategies, the advisor and client are now in a better position to determine the best variation of when to claim based on the specific facts for Thomas and Mary. Below is a chart for Thomas and Mary and their advisor to consider.

The fact is, Social Security will be a part of the retirement plan for almost every American worker. The advisor plays a critical role in educating the client and should consider future earnings, health, life expectancy, all other assets and debt, taxes, and finally, what the client’s desired financial standard of living will be. Consider many options; best practice is to work with the client to show the optimal claiming strategy. The optimal strategy is not necessarily the one that will provide the maximum lifetime income based on the assumed life expectancy.

This is a high-level overview of the type of information an advisor and client should have in order to have an educated discussion of the distinct options that are available. Advisors have several tools available to assist clients; this is one financial technology tool that plays a valuable role in foundational planning.

Martha Shedden , NARSSA president and cofounder, said, “We are all part of the Social Security insurance program. It was put in place as soon as we started working, and we have been paying into it for decades. Because you are an expert on this topic, your value is the knowledge you provide to make sure each retiring individual receives all the benefits to which they are entitled.”

Ernest J. Guerriero,

CLU,

CPCU,

ChFC, CEBS,

CPC, CMS,

AIF, RICP, CPFA, is the past national president of the Society of Financial Service Professionals. He can be reaged at ernest.guerriero@ innemail.com

Boost your confidence, embrace your uniqueness and transform your sales

Unleashing your creative strength will lead to stronger presentations.

By Lloyd Lofton

Imagine a sales landscape where every presentation is a showcase of confidence, creativity and unique ideas, a scenario in which prospects ask you, “How does that work?” or “How do I do that?”

How would your conversations be different if every prospect you spoke with disclosed the reason for their hesitation or the history of their failure to take action; or better yet, what if they actually came out and told you “This is the problem I’m having, the concern I have, the fear that’s held me back”? Can you imagine that happening on most of your calls?

Why doesn’t that happen for you? (Hint: If you’re in this boat, you’re normal; most of us are or have been there.)

Unfortunately, the fear of judgment often compels us to censor our thoughts, which leads to stifling our creativity and potential success.

This self-imposed ideacide hinders our ability as professionals to present our best selves to prospects and clients. Ideacide is a toxic self-worth disease that everyone except the person who has it recognizes. Those who have this disease believe (or need to believe) that it’s the lead vendor’s fault or the fault of a bad lead, bad management, lousy products, rates that are too high or just plain bad luck.

W. Clement Stone said, “Hope is the magic ingredient in motivating yourself and others.”

This can be overcome. Let’s understand how to embrace your uniqueness in order to transform your sales presentations.

Embrace self-reflection

Before delving into the dynamics of sales presentations, take a moment for

self-reflection. Recognize that the fear of judgment often stems from our inner critic, the voice within us that prejudges us and stifles our creativity.

Who should the sales call be about? The prospect, right? Yet when I listen to sales calls, the one word that discloses who the salesperson thinks the call is about is always “I.” That’s right — they keep saying “I.” “I want to help; I want to get you the best price; I want to blah, blah, blah.”

The call should be about the prospect, their pain, what they want to solve and where they are in the process. But we’re so busy trying to be liked that we forget to make sure the prospect feels as though we like them and are interested in them.

Ask yourself:

» Are you limiting your options by conforming to perceived expectations?

» Are you dismissing your creativity because it doesn’t align with preconceived notions?

Understanding these self-imposed limitations is the first step toward diffusing self-judgment. The things we worry about, the points we feel should be important to the prospect often aren’t. We become hostage to our own self-imposed limitations, and the results are often predictable — we don’t get the second call scheduled, or we don’t get the prospect as a new client. And that triggers self-judgment, repeating a cycle that has sabotaged our business for years.

Acceptance leads to confidence

To diffuse self-judgment, accept yourself wholly. You are the cookie jar, you have the cookies, you don’t have to give a cookie to anyone you don’t want to have it and you can give the cookie when you want.

Acknowledge your unique combination of talents, experiences and wisdom. The value you bring to the table is unique to you and will be specific to this prospect. You are an unparalleled individual with gifts that no one else possesses. You should never compete with other agents or advisors. Instead, you should compare yourself with the experience your prospect has had.

Shift your focus from self-criticism to appreciation:

accepting “what is” allows us to embrace confidence and focus on what works and let go of what isn’t working.

Know your uniqueness advantage

To leverage your uniqueness in sales presentations, answer the following questions:

» Identify the aspects of your life that would improve if you stopped suppressing your true self.

Your uniqueness is your creative strength

Remember, your uniqueness is not a hindrance but a creative strength. And you can benefit from this strength only by exercising it — and exercising it often. Your experiences, perspectives and knowledge form a tapestry that distinguishes you from others. Banishing the inner critic amplifies your creative contribution to the market.

“To diffuse self-judgment, accept yourself wholly. You are the cookie jar, you have the cookies, you don’t have to give a cookie to anyone you don’t want to have it and you can give the cookie when you want.”

Bonus: Encourage others to shine

As you liberate yourself from self-judgment, you inspire others — including your prospects and clients — to do the sam e. Encourage your clients, prospects and colleagues to embrace their uniqueness, fostering a culture of creativity and authenticity. I promise you they won’t get that from other agents or advisors.

Authenticity in sales presentations is magnetic. When you confidently embrace your unique self, prospects and clients will resonate with your genuine approach. This will pave the way for stronger connections and more successful outcomes. Remember, your success will come from the next thing you do.

» List your unique talents, experiences and wisdom. What are three positive things clients have said about you, and how did they benefit from working with you? Write those down and keep them in front of you all the time.

» Recognize the value of being exactly who you are. People buy from those they relate with, and you won’t be able to help everyone. Remember SWSWSMO — some will, some won’t, so move on.

By embracing and appreciating your uniqueness, you’ll find that self-judgment loses its grip, making room for confidence to flourish. It is in the “wanting” that self-defeating thinking occurs,

» How does being unique work to your advantage in sales?

» List three ways you’re unique for your clients.

» List the ways your uniqueness enhances your ability to connect with clients and prospects.

» How does being yourself make things easier for you?

» What type of buyer has become your client before?

» Develop your prospect profile and look for them.

So, step into the spotlight, celebrate your uniqueness and let your creativity shine! The risk is worth it. Let 2024 be unique for you.

Lloyd Lofton is the founder of Power Behind the Sales. He is the author of The Saleshero’s Guide To Handling Objections Lloyd may be contacted at lloyd.lofton@innfeedback.com.

What works for one person might not work for another

The path to success is different for each individual. Here are the components critical to achieving your goals.

By Joe Templin

“Do not seek to follow in the footsteps of the wise; seek rather what they sought.” — Matsuo Basho, Japanese Edo era poet.

“Tell yourself what to do and stop waiting for others to lay it all out.” — Tim Grover, CEO of ATTACK Athletics.

Many people complain that instead of telling them exactly how to do something, or even what to do, I focus on teaching the fundamentals and the metacognitive skills of learning how to learn and self-motivate on the path to success. There is a simple reason for this: You are not me, so what works perfectly for me will imperfectly work for you.

As anyone with grown children can attest, the job is to show the way and help, but not lay it out step by step in all ways, because that does not prepare them (or you) for what is to come. Their success (and yours) is as individual as each of us, so the planning and execution to achieve this success must be personally developed as well.

There are many factors at play in “success.” Three major components critical to achieve your goals include:

1. The IKEA effect.

2. Big five personality traits.

3. Environment.

Let’s start with the IKEA effect, which

shows we tend to like things more if we’ve expended effort to create them. This is partially due to the sunk cost bias that makes something more valuable to us if we work for it and there is more emotional attachment from the effort.

Think about Grandma’s homemade cookies baked with love, or the bookcase you put together for your first real apartment that you kept for way too long because you were emotionally attached to it. There is pride in making something yourself. Your goals, as well as your plans for achieving them, are stronger if you develop them yourself instead of having your manager or I dictate those plans and goals to you.

So instead of me telling you to do $500,000 of production this year, let me ask you: How much production would excite you and meaningfully improve your life? Don’t just blurt out the answer; think about it and calculate the numbers for a few minutes. The extra effort will make that number more meaningful to you because you derived the goal.

An internally generated goal is more achievable and desirable than anything externally imposed, such as a sales quota. This is where my goal of attaining 5,000 newsletter subscribers came from: not because it’s a round number, but because it directly aligns with things I want for my children and myself. Thus, it becomes a huge buy-in. Designing your goals this

way and having clients do the calculations with you for their goals gives your clients more buy-in and increases the probability that they will work with you to follow through on their goals.

From a biochemical point of view, having that goal you developed — a goal that is meaningful and exciting, plus slightly scary — means you have flooded the brain with dopamine and norephedrine. You have a cocktail of desire coursing through you and rewiring your brain, increasing the chances of long-term success. In general, this is great, but on an individual basis it might not be, because of our individual psychological traits. Decades of longitudinal studies have boiled down almost all successful personality traits to five key factors known as OCEAN: Openness

Conscientiousness Extraversion

Agreeableness Neuroticism

My favorite test for the Big Five is https://bigfive-test.com as it deeply dives into the constituent subtraits in addition to being quick and free. You might want to take the quiz.

Two of these five OCEAN traits carry a disproportionate weight for achievement in our realm: Conscientiousness (the way

in which we control, regulate and direct our impulses) and Neuroticism (the tendency to experience negative feelings).

Here are definitions taken from my own Big Five report.

I am almost off the chart for Conscientiousness. This has contributed to my discipline that leads me to run ultramarathons, but don’t put a Boston cream donut in front of me as even I have my limits. If you have a lower Conscientiousness score, you need to rely more heavily on procedures and external reinforcers than someone like me, since I will toil away constantly as that’s how I’m wired.

If you know someone who is addicted to work, chances are they have a very high Conscientiousness score. Of the Big Five, Conscientiousness has the highest correlation with success in any endeavor.

If you are not as driven and are less willing to sacrifice sleep or parties in order to work, internal motivators are less effective than the external structures we will address soon. But understanding how your own psyche is set up is critical to pushing your own buttons for success (to paraphrase Grover again).

The other main trait from the Big Five is Neuroticism. I am extremely low in this. I feel no shame, as anyone who has hung out with me at a conference can attest, and I am totally willing to embarrass myself for a laugh or a donation to a cause I support. I DGAF about the opinion of 99.9+% of the world, and so I can repeatedly fail without it bothering me.

Are you at this level? If not, what I do won’t work for you, but aspects of it can, albeit at a lower risk level that insulates the ego more. The more sensitive you are to others’ feelings and judgments, the more their opinion matters to you and the less you are willing to push. Former Apple CEO Steve Jobs is a good example, as his otherworldly self-confidence and infamous Reality Distortion Field made him comfortable with what would make most people cringe.

How comfortable are you with being uncomfortable? And I’m not talking about ice baths but about exposing yourself emotionally and professionally. My insane tolerance for risk and my ability to not take essentially anything personally inoculate me from fear. If

you have a higher Neuroticism score, you are more concerned about what others think of you. You’re probably not great at asking for introductions or dialing for new appointments out of concern for what people might say to you. Your body is probably more freeze- or flight-oriented than fight-oriented, and the norephedrine of huge goals scares you and makes you skittish.

If you are always worried about what others say, you exhibit anxiety. Exposure therapy (increasing levels of that which scares you or makes you worried, so you become comfortable in the uncomfortable) is one treatment you can self-administer. As the adage for phoning dictates: Do that which you fear until you fear it no more. It applies to asking for introductions or larger checks, for example: you build up a tolerance for that which would have previously overwhelmed you. As influential scholar Joseph Campbell observed: “The cave you fear to enter holds the treasure you seek.”

Understand your fear and start facing it head on. A great way to do this is to be in an environment that develops and supports facing and overcoming your fears and has a culture of success, which is where the third major component comes in. As General James Mattis (also known as “the warrior monk”) said: “Courage is contagious.” Setting up your office and processes so that they compensate for your weaknesses is natural, as humans have always used tools to survive and thrive in a dangerous world. We can’t fly like birds, so we build airplanes. If you aren’t naturally emotionally courageous, you can use other tools to get you to fly high in your business.

A key to support success is to use less emotional energy and reduce the negative inputs that can key off anxiety (which is often exhibited as avoidance behavior like spending time on the computer instead of reaching out to potential clients). The following activities have all worked.

If you are sociable (a high Extraversion score on the Big Five), do a dialing session with another agent each week so you have a cheerleader and accountability partner to make those 30-plus dials. The social aspect will be more powerful than the anxiety. When you make this a regular occurrence (such as weekly), the dopamine hit that comes from the expectation of fun

with the friend will counter the stress and increase your success. Having food with it further enhances the social aspect and turns it into a “dialing for dollars party.” Just remember to actually pick up the phone instead of talking with your friend the whole time. This is similar to going for a run or to the gym with a buddy.

Maybe instead of picking up the phone to call clients, you spend the time it takes you to drink a cup of coffee each morning sending LinkedIn messages to clients (“Hey, I notice you are connected to Bud Grant and Frank Tarkenton. Any reason I shouldn’t reach out to them?”) and then to their people (“Bud, Alan Page said we should talk. To make it easy for you, here is my Calendly link. Let’s grab a half-hour when it is convenient for you”). Note the use of technology to asynchronously communicate, thus reducing the potential for negative immediate feedback.

Another tactic is to shift the burden off of you and onto the client, relieving you of negative emotions and anxiety. If you have a good relationship with the client, ask them to send a mutual introduction direct message or text to the client to open the door. After the other person responds, it is easy to continue the conversation. This method has an above-average success rate with extremely low emotional risk.

Manipulating your processes and environment in this way reduces your exposure to negative energy. The tools described above are time-efficient mechanisms for increasing productivity with zero cost. They can be layered on top of what you are already doing, even if you have a low Neuroticism score, to further enhance your production.

Remember: You are not me, and so you shouldn’t try to walk in my footsteps, as your journey and goals are different from mine. But you can learn about yourself and create your own path to where you want to be. You need to understand yourself, tell yourself what to do and where to go, and then do it. And that is the best success of them all.

Joe Templin, MCEC, CEC, CLU, ChFC, CAP, the Human Kaizen Expert, is the author of Every Day Excellence. Contact him at joe. templin@innfeedback.com.

Empowering Americans to better understand financial products

Americans understand the need for protection but often don’t understand how to obtain it.

By Stephen Wood

Sometimes it can seem as though the financial services industry collectively believes that the universal solution for end-of-life planning and retirement funding is to simply “buy more policies” or “save more money.” This is simplistic and not an accurate or fair perception, but does it matter if consumers feel that way?

To set the stage, LIMRA and Life Happens partnered on the 13th annual Insurance Barometer Study in 2023 and took a closer look at consumers’ attitudes and behaviors regarding financial security and preparedness. Too many Americans are unable to prepare as well as they would like to, and many more are unaware of how to do so.

top concern in all 13 years. This feeling is nearly universal. Retiring comfortably is the top concern for households with more than $150,000 per year of income (40%) as well as those earning under $50,000 (55%).

Strikingly, among the 14 other concerns on the survey, those landing in the top four for everyone, regardless of income, are concerns that typically become more likely later in life.

self-report a life insurance need gap — that is, those who are uninsured and say they need it in addition to those who own some type of life insurance who say they need more. Although much of the life insurance and savings needs are aspirational for many Americans, we cannot overlook the millions who are willing and able to enter the market — with the right tools.

Many financial and insurance companies are developing sales strategies to better reach markets that may have been overlooked in the past — diverse markets such as middle- and lower-income households, single mothers, and different races and ethnicities.

It is important for the industry to set the path for potential consumers to better understand the options attainable for them. With each passing year, we have more tools and platforms than ever before to educate, communicate and market tailored products to a diverse array of potential customers.

We know that there are millions of Americans who understand the need for protection products but believe they cannot afford them and, moreover, are unsure how to go about purchasing them. Not to mention they don’t know what products are best for them and their families.

The Barometer Study has asked respondents what their top financial concerns are since its inception in 2011. “Saving money for a comfortable retirement” has been the

This is a snapshot of a persistent trend in America: Millions of families are not financially prepared for retirement, declining health, or serious illness or injury. A multitude of factors contribute to this general unease regarding financial security and stability.

Wealthier and more educated Americans are generally in better positions for retirement and emergency funding, but as the demographics of America change and diversify, sellers and agents must diversify their potential customer base as well.

We consistently see in our research the desire and need for consumers to better protect themselves and their families. For example, 41% of American adults

What can the industry do now to help consumers in the future?

» Create trustworthy online content relevant to their needs — not corporate news or self-congratulations.

» Rethink marketing. Use social media to reach millennials and Generation Z.

» Invest in modern and online interfaces. Make the direct-to-consumer experience for life insurance as smooth as possible, perhaps using property/casualty sites as a template.

» Reconsider underwriting and partnerships with trusted brands. Today’s consumer wants the process to be as quick as possible and may not even want to meet with an advisor in person.

» Provide honest information to prospective clients. Retirement and estate planning can be difficult, but it is hugely important and will provide real and perceived security.

Stephen Wood is research director, consumer markets, with LIMRA. Contact him at stephen. wood@innfeedback.com.

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

The shadow caregiving system and economy

Family caregivers provide billions of hours of unpaid care, but that care comes at a cost.

By Carroll S. Golden

We do not necessarily use or understand the term “life expectancy” correctly, according to Josh Zumbrun’s Dec. 15, 2023, article in The Wall Street Journal.

About 95% of the time, life expectancy projections are based on the concept of a synthetic or fictitious cohort, according to Michel Guillot, a demographer and professor of sociology at the University of Pennsylvania. Many of the results come from statistics that look at how many people died at each age in a given year and then calculate how long a hypothetical infant would live if those age-specific death rates applied for that infant’s entire life.

For example, if 1.5% of people aged 65 die in 2024, this period-type calculation assumes 1.5% of babies born this year who are still alive in 65 years will die at that age. It assumes that for today’s babies who won’t actually turn 65 until the late 2080s, neither environmental nor medical progress nor a pandemic or natural disaster will have an effect on their mortality. Guillot suggests that using cohort life expectancy — which requires assumptions about medical advances, natural and man-made disasters, a pandemic, wars, or who knows

what — should be considered instead.

What’s the practical implication of all this? No matter which statistic you use in discussions about longevity, health and life planning, or financial longevity planning, advisors and agents (and really everyone else) must plan for extended care needs. Why? Regardless of the statistical measure used in discussions about longevity, health, life planning or financial longevity planning, everyone — including advisors, agents and individuals — must factor in extended care needs.

The 2023 AARP Public Policy Institute report titled “Valuing the Invaluable” reveals that family caregivers contributed an astonishing 36 billion hours of unpaid care, valued at an estimated $600 billion. This constitutes what I term the shadow caregiving system, creating a substantial $600 billion shadow caregiving economy, a figure expected to grow. This estimate excludes workforce shortages, care-related costs, out-of-pocket expenses, lost wages and disrupted careers.

The complexity of care, coupled with a shortage of trained caregivers and facilities, exacerbates the situation. Many individuals erroneously believe that Medicare or Medicaid will cover all their long-term care needs. Emotional stress is another factor that is not easily attached to a number and added to these estimates. If your clients are not already part of the shadow caregiving system, it’s likely they will be soon.

What’s the practical application of this? Staying informed about the range of insurance products available is crucial. If you’re uncertain about initiating and sustaining conversations regarding extended care planning, it’s time to catch up. This is a topic that I have researched and written about in my two books: one for professionals, How Not To Tear Your Family Apart, and one written for consumers, How Not To Pull Your Family Apart: A Practical Guide to Caregiving and Financial Stability. Many advisors mentioned that their clients wanted to learn how to approach this topic with family members, which resulted in a third book, How Not To Pull Your Life Apart Caregiving: Overcome Challenges and Objections to Planning Conversations. This opportunity to positively impact your clients’ lives and the lives of care recipients — and by extension their families (no matter how they define family) — is growing every day.

Longevity can affect insurance funding and legacy planning, leaving no room for negotiation or delay when care needs arise. According to AARP, 53 million individuals assumed the role of family caregivers in 2021. It’s essential to ascertain whether your clients are part of this growing statistic, as these conversations, although challenging, are vital. Numerous resources, including books and articles, offer valuable insights into approaching this topic with clients or their families. Alternatively, collaborating with a trusted colleague specializing in extended or long-term care can provide valuable support.

Remind your clients that caring for oneself and fostering loving relationships, particularly when facing or anticipating extended care needs, are integral parts of love. Assisting clients in developing a comprehensive extended care plan not only communicates your concern for them and their families but also demonstrates your commitment to their well-being.

Carroll S. Golden, CLU, ChFC, LTCP, CASL, FLMI, CLTC, LACP, is the executive director of NAIFA’s Limited and Extended Care Planning Center. She is a bestselling author, and her third book, How Not To Pull Your Life Apart Caregiving: Overcome Challenges and Objections to Planning Conversations, will soon be released. Contact her at carroll. golden@innfeedback.com.

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.

Navigating 2024’s policy challenges

These policies will significantly shape our strategies and decision-making in our industry, impacting life insurance, retirement planning and investments.

By Alex Kim

Now that we are in the first few months of 2024, financial security professionals are navigating myriad federal policy issues that carry far-reaching implications for our industry and the diverse needs of the individual, family and business clients we serve. These policies will significantly shape our strategies and decision-making in our industry, which includes life insurance, retirement planning and investments.

Challenges spilling over into 2024 include high borrowing costs, persistent inflation worries and multiple armed conflicts worldwide. Adding to the complexities are the issue of federal legislative inactivity and the absence of decisive policy actions on important matters such as taxation. However, the 2024 concerns can be simplified into three main items:

the Department of Labor fiduciary rule proposal, upcoming elections and tax-related issues.

The DOL’s recently proposed fiduciary rule, released on Halloween 2023, expands the definition of investment fiduciary advice while simultaneously restricting the business practices of financial security professionals. The proposed rule will drastically impact the profession’s ability to provide holistic retirement planning to clients who depend on retirement advice.

Contrary to the DOL’s intended goal, the proposal could hinder or even deny needed retirement advice, particularly for individuals with low-to-moderate income. Additionally, the proposed rule will make it more challenging to enter or start a career as a financial security professional.

The DOL proposal is offensively framed, misleading and substantively very bad. The proposal overlooks the existing robust investor protections provided by the Securities and Exchange Commission’s Regulation Best Interest and the adoption of the National Association of Insurance Commissioners’ model regulation by 40 states. And if you think about it, it seems

that over the past 13 years the DOL has been on an ideological crusade to effectively ban commissions. That’s why they continue to come back with regulations that are so punitive that they will make it impossible for financial security professionals to do their jobs.

Looking at Congress in 2024

The 118th Congress has faced criticism as the least effective in history, marked by limited legislative rulemaking. While it seems numerous dramas and subplots unfolded on Capitol Hill in 2023, the focus is shifting toward the upcoming 2024 election. The election results can reshape the political landscape, impacting the presidency and control of the Senate and House of Representatives. This underscores the significance of taxes as a key issue in the pivotal political landscape.

Several key provisions of the Tax Cuts and Jobs Act are slated to sunset after 2025, including the estate tax exemption, child tax credit, SALT deduction cap, individual income tax rates, standard deductions and 199A deductions for pass-through businesses. The fate of these provisions beyond 2025 will be influenced by the outcomes of elections, determining the president and party control of the Senate and the House.

In addition, the upcoming transfer of an estimated $100 trillion from baby boomers to the next generation over the next few decades is expected to prompt legislative proposals aimed at capturing additional revenue. These tax proposals will be targeted to address the burgeoning government debt and Medicare and Social Security shortfalls and offset other federal initiatives. In fact, there are already several tax proposals targeting Americans based on specific income and wealth thresholds.

Finseca was created to reunify the financial security profession. With greater scale and a stronger voice, we have the potential to tackle the significant challenges emerging in 2024. Although the obstacles ahead pose significant challenges, they are not insurmountable.

Alex Kim is vice president of federal affairs at Finseca. Contact him at alex.kim@ innfeedback.com.

Finseca is the home of the top financial security professionals. This member-driven community serves as a credible source for the profession and provides exclusive access to the brightest minds in it.

Feel like your messages to agents and advisors are vanishing into the inbox black hole?

Financial professionals are swamped with emails vying for their time, attention, and business.

Make sure your message gets the attention it deserves by leveraging this overlooked strategy:

The Spectrum Financial Group ascended to the top of Kansas City Life Insurance Company by winning the Agency Building Award (ABA) for 2023 – the third year in a row. The agency also achieved the ABA in 2021 and 2022, and an ABA Honorable Mention in 2010.

Pictured from left: President, CEO, and Vice Chairman of the Board Web Bixby and General Agent Dennis Parrish.

2023 Agency Building Award winner

The Agency Building Award is Kansas City Life Insurance Company’s most prestigious agency honor, bestowed only to agencies that embody the spirit of entrepreneurship, growth, and building for the future.

“We could not have had any of our success without Kansas City Life. They have allowed us to build our agency our way and supported us 100%.”

– General Agent Dennis Parrish, CLU

The Spectrum Financial Group

CONTACT

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