InsuranceNewsNet Magazine | February 2025

Financial professionals are contributing their time and talents, and encouraging their families to join them. PAGE 8

PLUS Facing the long-term care explosion with Genworth’s Tom McInerney PAGE 4

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IN THIS ISSUE

INTERVIEW

4 Facing the long-term care explosion

Millions of baby boomers will need long-term care in the future. Genworth President and CEO Tom McInerney discusses how his company is facing the challenge of helping them fund it.

IN THE FIELD

12 Riding above the competition

By Susan Rupe

JD Moya was inspired by a mythological figure to build a business dedicated to serving Hispanics.

FEATURE

Giving back: It’s a family affair

By Susan Rupe

How industry professionals are helping others in their communities and getting their family members involved as well.

LIFE

17 What I wish I knew when I started out in life insurance

By Steve Spector

A newly retired agent looks back on the lessons he learned and what newer agents can learn from them.

ANNUITY

22 Three tips to adopt digital capabilities into your practice

By Craig Hawley

The annuity industry is moving toward a digital-first strategy.

HEALTH/BENEFITS

26 What is the future of long-term care in the U.S.?

By Susan Rupe

The age wave means more older Americans need long-term care — and that need will only increase.

INSURANCE & FINANCIAL MEDIA NE TWORK

ADVISORNEWS

29 Is a Roth IRA conversion key to strategic tax planning?

By Joe Schmitz Jr.

What clients must keep in mind when considering this tax move.

BUSINESS

31 Confidence is the key to cold calling success

By Susan Rupe

Self-assurance is crucial for cold calling success, and building it requires practice embracing discomfort.

IN THE KNOW

32 AI and ethics: What advisors must know

By Susan Rupe

One of the dangers of artificial intelligence is that it is expanding faster than the industry and individual advisors can keep up.

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Changes to our publication schedule

For 25 years, InsuranceNewsNet Magazine has been a trusted resource for independent insurance agents, financial advisors and the insurance industry. We want to share an important update about how we’ll continue to serve you in the future. To better meet the evolving demands of the industry and optimize our resources, InsuranceNewsNet Magazine will transition from 12 monthly issues to 10. This decision reflects our commitment to delivering the highest-quality content while adapting to the changing realities of the publishing landscape.

The primary reason for this adjustment is the increasingly high cost associated with printing and mailing. These expenses have risen significantly in recent years, as many of you may have experienced in your own businesses. By moving to a 10-issue schedule, we can maintain the exceptional standards you’ve come to expect while allocating resources more effectively to enhance the value of each issue.

As part of this change, we will combine two issues into special seasonal editions:

• December-January will become our “Winter” issue, offering an in-depth look at year-end reflections and trends for the year ahead.

• July-August will transition to a “Summer” issue, focusing on midyear strategies, insights and opportunities to keep your momentum strong.

These combined issues will be packed with curated insights, actionable strategies and timely updates tailored to your needs. We are confident that this revised approach will allow us to deliver rich, comprehensive content while ensuring a seamless reading experience for our loyal audience.

Our mission remains to provide you with the most relevant, engaging and insightful resources to support your success in an ever-evolving industry. By optimizing our production schedule, we can dedicate even more energy to producing impactful stories, expert analysis and innovative ideas strengthening our online content at InsuranceNewsNet.com.

We deeply value your continued support and trust. You have been the driving force behind our magazine’s success, and we are honored to be your partner in navigating the complexities of the insurance and financial industries.

Thank you for being a part of our community. We look forward to delivering exceptional content in the year ahead and beyond.

John Forcucci Editor-in-chief

NEWSWIRES

The fiduciary rule is probably history

The Department of Labor fiduciary rule is likely to end up in the political dustbin, some financial industry leaders say. Rep. Lori Chavez-DeRemer, nominated by President-elect Donald Trump to head the Department of Labor, is being viewed with skepticism by a financial services industry that wants efforts to extend fiduciary duty to go away for good

Chavez-DeRemer, R-Ore., has a sketchy history with the issue. As member of the House Committee on Education and the Workforce, she was the only Republican to vote against a Congressional Review Act resolution to strike down the fiduciary rule.

Despite that, however, it’s likely the DOL will not pursue the matter, a panel agreed during a recent webinar.

“It’s a little hard to believe she’s going to be passionate about it,” said Jason Bortz, a senior vice president and senior counsel at Capital Group, the investment manager to American Funds. “But it kind of suggests to me that they will let the litigation roll forward, at least in the Fifth Circuit Court of Appeals, where most watchers give that rule very small odds of surviving.”

‘EXCESS MORTALITY’ COULD REMAIN HIGH FOR A DECADE

COVID-19 might seem like a distant memory, but for life insurance executives, unexpectedly high mortality rates remain a stubborn reminder. And it’s starting to look like it might not correct itself anytime soon.

During recent third-quarter earnings calls, life insurance executives conceded that mortality assumptions might need to be reconsidered in light of new data. In particular, a recent Swiss Re Research Institute report concluded that excess mortality is likely to persist for as long as another decade. Excess mortality is a data point that insurers watch very closely.

“Under an optimistic scenario, we find that U.S. and U.K. pandemic-linked excess mortality would disappear by 2028,

reverting to pre-pandemic mortality expectations,” Swiss Re concluded. “Under a pessimistic scenario, we expect excess mortality to remain elevated until 2033, above pre-pandemic expectations.”

HOUSEHOLD FINANCE OUTLOOK HITS HIGHEST POINT SINCE 2020

The percentage of U.S. households expecting their financial situation to be better by the end of 2025 jumped to 37.6 percent, the highest since before the COVID-19 pandemic, a New York Fed

survey showed. On the other side of the scale, the level of those who expect their financial situation to get worse moved down to 20.7%, the lowest since May 2021. Despite this optimism, however, households told the Fed they are concerned about inflation and the resulting spike in consumer prices.

The cyber insurance market has been softer than it has been in some years.”

Inflation expectations at the one-, three- and five-year horizons all increased 0.1 percentage point, rising to 3%, 2.6% and 2.9%, respectively.

MORE THAN $100T IN WEALTH TO BE INHERITED

It’s called the Great Wealth Transfer, the passing down of assets from one generation to the next, and the largest amount is expected to be transferred in the next two decades.

Cerulli Associates estimates that $124 trillion will be passed to family members and charity by 2048. Of that amount, $18 trillion will go to charity and $106 trillion to family and heirs. Much of that will come from the wealthy: About $62 trillion will be passed on from the wealthiest 2% of Americans, or those with a net worth of over $5 million.

While the largest handovers are still a decade or two away, an estimated $2.5 trillion a year is currently being passed down to the next generations and spouses, according to the report. The annual windfalls will rise to $3 trillion a year by 2030 and to $4 trillion a year in 2036, eventually growing to over $5 trillion annually.

— Arthur Armstrong, partner in the insurance recovery group Reed Smith

Chavez-DeRemer

FACING THE LONG-TERM CARE EXPL SION

Genworth CEO Tom McInerney discusses the implications of millions of baby boomers needing long-term care in the future and how his company is facing the challenge of helping them fund it.

An interview with Paul Feldman, publisher

As more and more of the 70 million baby boomers require long-term care, the dearth of insurance providers and the shrinking number of care workers are shaping up to create a major challenge, says Genworth President and CEO Tom McInerney.

As one of the handful of long-term care insurance providers, Genworth is working to provide products to address the LTC need. Even so, McInerney says, with the tiny percentage of Americans who have LTC coverage, private-public partnerships such as the pioneering WA Cares program in Washington state may be needed to help assure adequate coverage. McInerney said working to overcome the past reputation of the LTC industry, which had failed to adequately deal with the drastically rising costs of care, requires a clear-eyed view of how to ensure a solid foundation for the future. Genworth’s subsidiary CareScout Insurance will offer what he calls “stand-alone long-term care

insurance. … The premiums go entirely toward paying the LTC claims in the future.” And future offerings include hybrid plans that may incorporate life or annuity components.

Prior to joining Genworth in 2013, McInerney served as a senior advisor to the Boston Consulting Group, providing advisory services to leading insurance and financial services firms. He had also previously served as a member of ING Groep’s Management Board for Insurance, where he was the chief operating officer of ING’s insurance and investment management business worldwide, and served in many leadership positions with Aetna, where he began his career as an insurance underwriter in June 1978.

In this interview with InsuranceNewsNet Publisher Paul Feldman, McInerney describes what it will take to provide successful long-term care insurance, what the explosive need will be in the next few years, and why public plans may be a vital component.

Paul Feldman: Tom, you’ve had a very successful career. How did you get started in the industry?

Tom McInerney: I started in insurance in 1978, out of college. I spent more than 20 years with Aetna, in all lines of business around the world. I was running the financial division of Aetna when that was sold to ING, a big Dutch financial service company. I spent 11 or 12 years there, and then ultimately came to Genworth 12 years ago.

Feldman: Genworth is a leader in long-term care insurance, and it has been an interesting marketplace. Tell us about the challenges you faced, and where you see it going.

McInerney: I would say that I think it’s very unfortunate that when the business started 40 years ago, the regulators and the insurance companies, and probably the policyholders, all believed that the

way to run the business was to start with original pricing assumptions and try not to adjust premiums until it became very obvious that there were issues. I think because of that, the history and the legacy, which has not been good as everyone knows, resulted because the product was generally approached as, a level premium. Although there was always the right to raise premiums as needed, that took way too long to happen.

Going forward, I believe the private individual LTCi business could be a strong business as long as you start with conservative assumptions for things like interest rates, lapses, and the incidence and the severity of claims. But then look at the original pricing assumptions — and reality every year — and to the extent that they differ, make appropriate adjustments in the premium levels, just like on most other lines of insurance. That wasn’t done. We are in the process of filing a new longterm care insurance product under the CareScout brand. The essence of that will be that we’re starting with conservative assumptions, but we’ll review those annually. To the extent that the assumptions prove to not reflect reality over the next 40 years, we’ll make assumptions along the way. If we need to change, we will do that.

Today, there are fewer than 10 companies that still write business, including us going forward with the CareScout brand. But we have interest rates more aligned with where the market is today, and we assume the annual lapse rate will be less than 1%. We’ve paid 370,000 claims over the last 40 years — about $30 billion worth of claims. We now have a very significant set of claim data on incidents and severity. So, we think pricing today reflects what the historical experience has been. I think that will be much better going forward.

Feldman: Tell us a little bit about CareScout.

McInerney: Genworth Financial acquired CareScout in 2008, and, historically, CareScout has been a very important subsidiary for us in the longterm care industry. Primarily it has run the Cost of Care survey process, as well as doing all the assessments. When our policyholders file a claim, CareScout has done all of the assessments of the claim. Going forward, in addition to continuing

with the survey, continuing doing the assessments, there are two other new businesses that CareScout is launching. One is already in place, and that’s called CareScout Services.

So, you would come to us, whether you’re a policyholder or a consumer without any insurance, and we would use CareScout to assess the claim, come up with a care plan, and then we’d recommend a CareScout Quality Network provider to you. And if you chose that provider, then you would be able to receive preferred rates that are generally about 20% below what that same provider would normally charge. So that’s one of

associated with it. The premiums go entirely toward paying the LTC claims in the future. So therefore, there’s generally more coverage on those policies for longterm care than there is in a hybrid. But the complaint about traditional long-term care historically has been, “Well, if I pay these premiums but I never use the policy, I’ve received no value.” So hybrids were introduced many years ago for that need. If you have an long-term care need, the hybrid policy covers that, but if you don’t have care needs, ultimately there’s an annuity or a life insurance benefit. Our first product, CareScout Insurance, is a traditional long-term care insurance

the new businesses of CareScout. And then we’re launching our first new longterm care insurance product next year, with another subsidiary called CareScout Insurance. This product will have not only better, more conservative assumptions that reflect the current reality, but also an understanding with regulators and with our policyholders going forward. If those price score assumptions differ from what reality is, we’ll change the premiums to reflect that.

Feldman: So there are only 10 carriers offering long-term care insurance today. It seems like a lot of the market has gone toward life insurance as a rider, or an annuity as a rider.

McInerney: This new policy I just described for CareScout Insurance is what I’d call a stand-alone long-term care insurance because there’s no life insurance

gives his opening

product, but we will go forward with a whole set of new hybrid policies that will combine hybrid features, life, and annuity, including variable annuities, with LTC benefits.

Feldman: Interesting. What is your distribution strategy with the new products?

McInerney: We will rely on the current distribution that’s available, which is the traditional: brokerage general agents, independent agents, financial planners, financial advisors. We also will offer these new products to the employer. We’ll offer both intermediary distribution and employer distribution. Then going forward, we’re also looking to build the CareScout brand, and ultimately go direct to consumers without an intermediary agent. But that’s probably several years down the road.

McInerney

remarks at Genworth’s 2023 LTC Symposium in Washington, DC.

Feldman: What would you tell somebody who isn’t selling long-term care insurance right now? I see long-term care insurance as one of the most important things to anyone’s financial plan, and it seems to be missing from most people’s plans.

McInerney: I think that’s right. I think there are many reasons for that. I think, in general, American consumers believe that Medicare covers long-term care, which it doesn’t. So we — and I think the Medicare planners — need to be better at educating the public on that. The second is that it is expensive, but that’s because the care is expensive. I would say to most individual Americans, as well as distributors who sell insurance, that half of the 70 million baby boomers — who in 2025 will be 61 to 79 years old — will need long-term care at some point in their life.

And if you don’t insure against that with private insurance, then you’re going to have to come up with the amount to cover that care out of your own savings. And the average claim that we’ve seen over time has been about $250,000. And some claims, particularly Alzheimer’s disease or dementia claims, can be well over a million dollars, depending on how long the claim lasts.

And with Medicare, you still pay premiums to Medicare, and Medicare does have deductibles, and so on. I think people underestimate the amount of money they’ll spend on long-term care.

Feldman: Who do you think is the ideal customer right now for a longterm care policy? What does their demographic look like? Where’s the big opportunity here?

McInerney: I think the broad age category is 40 to 70, and I think the narrower range is 50 to 60; most people buy in their mid-50s. I think there are probably the top 20% of Americans, by income and wealth, who can self-fund if they want, but they may regret not buying some insurance, because self-funding turns out to be more expensive.

Most people, in my view, should buy insurance to cover at least some portion of what they may need for long-term care. And again, based on claims today, the average claim is in the $250,000 range.

Feldman: What is the age when claims usually begin?

McInerney: Usually, it’s early to mid-80s. Again, at 40 to 70, 50 to 60, you’re in the prime buying age. I think you want to plan, and either set aside money to pay potential claims, or buy long-term care insurance, whether it’s a stand-alone or a hybrid. And again, I think you can cover some, or all, of what you think you’ll need in the future.

Feldman: So one of the trends I see is home health care. Do you think that changes the game, or do you think that’s in line with all the other claims?

McInerney: If you look at those 370,000 claims that we’ve paid over the last 40 years, two-thirds of them start in the home. I think more people will want to start receiving care in their home if they need care. So I think that will continue to be the case going forward. But I think people underestimate how much in-home care costs. In our 2023 Cost of Care survey, the average cost per year for in-home care — and that was based on around 40 hours of care per week — was about $75,000 a year. Whereas for a single private room in a nursing home, which is the most expensive, and that’s usually 24/7 care, the average there is about $110,000 a year. So home care is less expensive because people don’t usually have 24/7 type coverage in the home, but it’s still very expensive.

If you have a severe dementia or Alzheimer’s disability that causes the need for care, then it becomes a 24/7, 365-day need, and that’s when most people go into an assisted living community or nursing home or hospice care. But I would say with most claims that we’re seeing, when they start to need the care, they can’t do two of the six activities of daily living. Usually, they start in the home. If their disability worsens, many times they will move from in-home care to a facility, and that’s when the hours of care increase dramatically.

Feldman: It’s such an underinsured marketplace.

McInerney: About 90%-plus — probably closer to 95% than 90% — of the baby

boomers don’t have long-term care insurance. The younger ones who will be 61 to 70 next year, they can still probably buy. It’s more expensive than if they bought in their 50s, but they can still probably buy. But for the other half of the boomers that are 70 and older, they probably wouldn’t qualify today.

And for them, they’re going to be on their own, paying out of pocket, or relying on unpaid family care. Ultimately, the government program, which is the payer of last resort, is Medicaid. But in order to qualify for Medicaid to pay for longterm care, you have to qualify under the income standards, which are pretty low. Medicaid reimbursement rates are not sufficient to pay the actual cost of the care.

Feldman: Where do you see longterm care going in the future?

McInerney: I think there is an increasing realization in the states of the situation, because I think they’re seeing the significant rise in Medicaid costs that the states are paying because of the rising long-term care costs as Americans age. And in 2025, the oldest boomer will be 79, which is still below the peak claim year, so it’s only going to get worse. Washington state is probably the furthest along. They now have a program called WA Cares, which is state-funded. It’s a mandatory system, so all employees in the state of Washington pay a payroll tax. It’s 0.58% of their pay that goes into a long-term care fund.

That’s a pretty low tax rate. And they are entitled to care — after paying into the program for at least 10 years — from the Washington state plan, but the amount that’s covered is limited to $37,000, which doesn’t cover a lot. But at least Washington is there. A number of other states are looking at that program. And there’s a Senior Aging Committee of the Senate, and there’s a group in the House that focuses on a federal long-term care system. Nothing has been implemented. There is a federal legislative proposal labeled the WISH Act. It doesn’t have a lot of sponsors yet. The way that would work, depending on your income, is that you pay the cost of care for a certain number of months, or years, and then past that, the federal government, under this act, if it passed, would step in and pay the amount over that.

And I actually like that program. I like it because it does require individuals to put aside some money or buy a policy to cover some cost of care, but not necessarily enough to cover the very expensive diseases. I don’t see that being enacted at the federal level anytime soon, but I think there are more and more people in Congress who are focused on the need. And then the states are experimenting. While Washington is the furthest along, I know California and several other states are looking at similar kinds of programs.

I think ultimately, based on my 12 years of being at Genworth and CareScout and focusing on this industry, the best solution is a private-public partnership, where you have to have either private insurance or private savings to cover some amount based on your income. So the lower the income, the more the government steps in earlier, and then beyond a certain amount, particularly for the severe dementia-type diseases, there’d be a government catastrophic coverage paid by a broad-based payroll tax that would cover the higher level of claims beyond the amount that needs to be covered privately. I think that’s ultimately the right solution. I do think it’s very difficult politically because it’s a long-term problem, and Congress tends to have enough challenges.

of skilled nursing facilities are closing. They can’t afford to keep their doors open. People can’t depend on family members to take care of them because people have smaller families, and they’re scattered. Where do you see the future of the actual caregiving itself going?

McInerney: I think that’s a major challenge going forward. The first thing I’ll say, there are 70 million baby boomers

There needs to be much more focus on how we’re going to cover those 95% of boomers who don’t have long-term care insurance. Some, maybe the top 20%, have enough in savings, but for the rest, I think it will be a significant challenge for them.

So I do think we’re getting close, because the oldest boomers are only a few years away now from their peak claim years. There needs to be much more focus on how we’re going to cover those 95% of boomers who don’t have long-term care insurance. Some, maybe the top 20%, have enough in savings, but for the rest, I think it will be a significant challenge for them.

Feldman: How do you see the nature of caregiving changing? We see a lot

who are 61 to 79, and in 2026, those born in 1946, which is the first year, will be turning 80; then it’ll be a little under 10,000, but close to 10,000 every day for 20 years, and that creates a significant demand for caregiving. And then the supply of caregivers, as you said, is decreasing. It’s very hard work, and generally very low pay. I think we already have a significant shortage and that’s only going to increase as the baby boomers age. I think that the public sector and the private sector have

a lot of work to do to figure this out, because this is supply-demand. And then it’s economics 101. Demand will go up dramatically as the 70 million baby boomers age. The number of people 85 years and older will triple over the next 20 years as those baby boomers age. But the supply is not tripling to cover that; it’s actually shrinking. So it’s a huge challenge, and I think the ultimate solution for that is very complex. We will need to train more people to give care, and we will have to pay them better. That also increases the cost of care, but we must do those things. And I think without a significant increase in paid caregiving to meet the demand of the baby boomers as they age, the care will fall to their family members, their kids. So I’m right in the middle of the baby boomers; I’m 68. I have three daughters; they’re 35 to 40. Fortunately, I have coverage, but I think that a lot of the children of the baby boomers are going to increasingly become members of the squeeze generation where they have their own kids. I have three granddaughters, and they’re five or younger; so my daughters are taking care of them. And if I didn’t have insurance, my daughters would have to potentially also take care of me. But 95% or so of boomers don’t have insurance, and so they’re either going to rely on their savings or have to ultimately rely on their children or family members to provide non-paid care. That will be a big challenge. I wish I had an easy answer. I think it’s very complex.

It will take both the public and private sector working together to try to figure that out. Maybe some of these new pharmaceuticals for Alzheimer’s and other diseases can help reduce the demand side, but I think there needs to be a dramatic increase in the supply of caregivers, for sure.

Financial professionals are contributing their time and talents, and encouraging their families to join them.

BY SUSAN RUPE

Sean Locke was everybody’s friend. A talented basketball player at the University of Delaware, Sean was as gifted at bringing people into his life as he was at racking up points on the court.

He lived in an off-campus house a few blocks from the university. The house soon became known as the party house, where everyone was welcome and the fun never ended.

“Sean didn’t care who you were or where you were from. If you walked through the door, you were a friend,” said Scott Tuozzolo, a family friend.

Sean died by suicide in 2018, shocking his family and friends. “He was struggling, and obviously struggling in silence,” Tuozzolo said.

and his wife volunteer with UnLocke The Light, helping with various fundraising events and helping raise awareness of the foundation’s work.

Tuozzolo is one example of how people in the financial services industry are giving back to their communities and involving their families in their charitable work.

Not long after Sean’s death, Tuozzolo said, his family held a high school basketball tournament to raise funds for the Mental Health Alliance of Delaware. That first tournament, held in February 2019, raised $168,000.

“It kind of morphed from there, where his family created the foundation and then created Sean’s House, at the house where Sean lived for three of the four years he was at the University of Delaware,” he said. Tuozzolo said he and his wife volunteered at that initial fundraising basketball tournament and every tournament held after that. And when it was time to turn the former party house into Sean’s House, the Tuozzolos were among the volunteers who showed up to paint.

The party house where Sean spent much of his college life has a new purpose since Sean’s death. Sean’s family created a foundation, UnLocke The Light, in his honor. The foundation is dedicated to unlocking students’ light by providing resources for those struggling with depression, self-injury and suicide. The house on West Main Street in Newark, Del., is now Sean’s House, a safe haven for teens and young adults who need support to improve their mental health and well-being as well as connect with their peers in a confidential environment.

Tuozzolo is principal and head of agency development at Income & Estate Planning Partners in Newark. Sean and Tuozzolo’s son were longtime friends. Now Tuozzolo

Sean’s House was dedicated in 2020 and provides peer support, crisis help and support groups to young people experiencing mental health crises. Support groups for the parents of these young people also are available. Tuozzolo calls himself “an unofficial ambassador” to Sean’s House, where he often brings people to meet Sean’s father, Chris, and learn more about the work that is done there.

UnLocke The Light has grown since 2020, opening “Sean’s Rooms” in several schools in the Newark area. The rooms are places where students can access mental health resources and talk with someone who understands. Future plans include opening Sean’s Rooms on military bases and in police departments to provide mental health resources to people who work there.

Tuozzolo said he is working with a payment processing company to create an affinity program that would benefit UnLocke The Light. He also solicits

sponsors and volunteers for the annual basketball tournament, which keeps growing every year.

He and his wife keep their calendars open for the first weekend of February each year, where they will spend two days at Chase Fieldhouse in Wilmington, Del., volunteering at the basketball tournament that raises funds for the house named in memory of their son’s friend.

“It’s a fun event,” he said. “It’s kind of like a reunion for so many of us, because you see people there who you may not have seen in some time.

“I tell everyone, if you like high school basketball, come out and catch a couple of games because there’s some good basketball to watch and you’re supporting a tremendous cause.”

Giving back is a GIFT

Some companies have a giving plan that is part of their organization and guides them on their quest to make their communities better places to live.

Financial Independence Group in Cornelius, N.C., established the GIFT Fund, a program that blends employee engagement with volunteer work. Employees are encouraged to have their family members join them in volunteering.

GIFT stands for Giving time, Investing in our community, Feeding the children and Teaching financial literacy, Leslie Lipscomb, FIG’s senior vice president, told InsuranceNewsNet. FIG works with a number of core nonprofit partners that rotate each year. This ensures the fund supports a broad range of causes and addresses various community needs. It also allows FIG to keep its volunteer efforts fresh and diverse, while continuing to build deep, lasting relationships with the nonprofit partners.

FIG encourages its employees to suggest new volunteer activities and share causes that are close to their hearts. The company holds quarterly volunteer days, and employees can pitch local causes to the GIFT Fund board. The board votes on two causes they will fund for the year.

Lipscomb said the Feed aspect of GIFT is of particular interest to her.

“We are hyperfocused on making sure children in our community are not hungry,” she said. The GIFT fund has partnered with community initiatives such as FeedNC, which provides food and other

Scott Tuozzolo and his wife, Colleen, volunteer each year for the annual basketball tournament that benefits UnLocke The Light and Sean’s House.

resources to people in need. FeedNC operates a community dining room, Donaghue’s Open Door, where anyone can eat one meal a day between 7 a.m. and 2 p.m. The dining room also provides training to those developing culinary arts skills. “It doesn’t matter if you walk up carrying your sleeping bag or you drive up in your Lexus, you are entitled to one free meal a day,” Lipscomb said.

FeedNC also operates Grassroots Grocery, where eligible individuals can select food in a retail-like setting. “It’s set up just like your Publix or your Harris Teeter,” Lipscomb said. “And a lot of donations come from those retail grocery stores, so we’re talking good food — not expired food.”

“We have a big emphasis on helping people understand the concept of financial literacy,” she said. The GIFT Fund has partnered with Common Wealth Charlotte, an organization dedicated to providing what it calls “uncommon financial solutions for low-income families.” Common Wealth provides economically vulnerable people in the community with trauma-informed education, certified financial counseling, asset-building and wealth-building skills, and access to banking services and 0% interest loans.

“Regardless of your credit, you can go to Common Wealth and get a $750 loan,” Lipscomb said. “Part of the terms is that you repay the loan, which helps you build your credit. People take advantage of the

involved in the GIFT Fund’s projects. He worked alongside her at a recent Christmas Angel Workshop, helping pack gifts for families devastated by Hurricane Helene in western North Carolina. He also helped her and other FIG employees at a back-to-school event where volunteers filled backpacks with school supplies for students in need.

“Having our children watch us not just work but also serve the community and give back, doing things that mean a lot to people, is so important,” she said.

Youthful interests fuel giving back

The activities that interested us as teens and young adults can form the basis for giving back throughout adulthood. Laura

Lipscomb said she and her seven-yearold son, Brewer, often help at Grassroots Grocery, helping clients pack the food they have chosen and loading groceries into their cars.

The GIFT Fund also has worked with Bags of Hope, which provides food for children in need in the Mecklenburg County Schools. Students are given a bag full of breakfast items, milk, juice, vegetables and ready-to-eat meals every Friday so they have food at home to tide them over for the two days when they won’t receive lunch at school.

“We packed more than 800 meals for the children to take home to provide 16 meals during spring break,” Lipscomb said.

The Teach aspect of GIFT goes hand in hand with FIG’s role in the financial services industry.

opportunity to build their credit. We’ve partnered with Common Wealth to help people focus on building their credit and working with people to increase their financial literacy.”

One of Lipscomb’s most enjoyable “giving back” projects through the GIFT Fund was helping rebuild a playground at the elementary school she and her sister attended as children.

“It was at the Marie G. Davis School in Charlotte, and my sister came along with me to support that initiative to do the playground build,” she said. “It was really special given that the two of us went to school there. I went to fourth grade there and she went to fourth and fifth grades there. So there were definitely some roots there for us, and it meant a lot for us to work on this.”

Lipscomb’s son is becoming more

and Tim Schultz, owners of Preservation Retirement Services in North Olmstead, Ohio, are inspired to give back by building on the things they loved in their younger years.

For Laura, giving back stems from her years as a Girl Scout. She earned Girl Scouting’s highest honor, the Gold Award, and is a lifelong Scout. Today, she volunteers with the organization in several capacities.

“I’ve had 35 years of membership at least, and I served on the board of Girl Scouts of Northeast Ohio, which is our local council, serving 18 counties in Northeast Ohio,” she said.

Laura said she joined Girl Scouts when she was in kindergarten “because I saw it as something fun to do. My mother and grandmother had been Girl Scouts. My grandmother was my mom’s Girl Scout

Leslie Lipscomb and her son, Brewer, pack bags of food for Bags of Hope, which feeds hungry students in the Charlotte, N.C., community

leader, and then my mom became my Girl Scout leader.”

She persisted in Girl Scouting “because I saw the value in it.” When Laura was in high school, she took advantage of a Girl Scouting program called Wider Opportunities, which gave her the opportunity to spend a month at Sangam, a Girl Scout Girl Guide World Center in Pune, India.

“I came from a very small town in West Central Illinois, which was a wonderful place to grow up but didn’t offer much diversity,” she said. “So to travel to India as a 16-year-old girl was a big game changer for me.”

In India, Laura and the other Girl Scouts worked with women to help teach

financial needs. “We have a concentration on women and investing,” she said. She added that she has invited some of Preservation Retirement’s clients to join her in helping the Scouts with some STEM projects.

Girl Scouting is more than the “3 C’s” of crafts, camping and cookies, Laura said. “Girl Scouting is investing a lot of resources in STEM programming. Our council is building a multimillion-dollar STEM Center of Excellence at one of our camps. Girl Scouting has leaned in and said, ‘Let’s give girls a space to do all the fun things we’ve always done. We’re still camping, we’re still selling cookies, we’re still making crafts, we’re still traveling. But let’s also give girls the opportunity

media, one Iowa fan suggested that the team and fans should think up something to do during the game to connect with and cheer up the children in the hospital, and “the wave” was born. At the end of the first quarter, all 70,000 fans at Kinnick Stadium look up and wave to the children who are patients in the hospital.

Tim and Laura continue to support Stead Family Children’s Hospital. They not only provide financial contributions to the hospital but also hold events for their clients and friends, such as a March Madness tournament, to raise money for it.

Laura said she conducts presentations on how to incorporate charitable giving into a financial plan “because that is an important piece for folks who have the

them life skills as well as skills that would help them earn money for their families. “This experience gave me the confidence that I could do anything,” she said.

Laura’s interest in Girl Scouts faded after she went to college and graduate school but was rekindled during an event in her community. “There was a fundraiser for the YWCA in which they had an auction where, instead of bidding on items, you could bid on lunch with a community leader,” she said. “I saw that one of the leaders was the CEO for the local Girl Scout council, and I thought about how I had lost touch with the organization and why not meet her and talk to her?” Laura had lunch with the leader and was soon asked to join the board.

She said her involvement with Girl Scouts dovetails with Preservation Retirement’s interest in serving women’s

to engage in STEM, with the hope of increasing the number of women in STEM and helping girls have a career if they are interested in it.”

Tim and Laura met at a University of Iowa alumni football watch party in Cleveland. They got married on the university campus, and a Hawkeye football game and tailgate were part of their wedding weekend.

At the same time, the University of Iowa was building the Stead Family Children’s Hospital that overlooks Kinnick Stadium, where the Iowa Hawkeyes football team plays. Before the 2017 college football season began, news broke that the Press Box, a lounge on the 12th floor of the children’s hospital where the patients and their families can gather for breathtaking views of the stadium and the game, would open for the first home game. On social

resources to do that.”

The Schultzes said they believe giving back involves more than simply writing a check.

“You can always give back no matter what you have,” Laura said. “We try to do that with our checkbook as well as with our time, because I think it’s important to do both. And we try to engage other people around us to do that as well.”

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  srupe@insurancenewsnet.com.

Laura Schultz has become known in her community for her work with Girl Scouts, an organization she has belonged to since she was a child.

JD Moya , who said he ‘was Hispanic before Hispanic was cool,’ built an insurance brokerage empire inspired by a mythical icon.

By Susan Rupe

When JD Moya and his then-business partner decided to create a managing general agency aimed at the Hispanic market, they met for lunch at a rotating restaurant atop a highrise building in Dallas.

While drinking Scotch, the two of them kicked around some possible names from history, religion and mythology. Genesis was one possibility; Excalibur had some appeal. But then they looked out of the restaurant window and saw an iconic piece of Dallas architecture — the red figure of Pegasus, the winged horse of Greek mythology, atop the Mobil Oil headquarters (now the Magnolia Hotel). Pegasus was Mobil Oil’s mascot, and the figure of the legendary horse has lit up the Dallas skyline for decades.

Moya recalled the story of Pegasus from Greek mythology — how the warrior Bellerophon captured and tamed the flying beast only to be thrown from the horse as he tried to ride it to Mount Olympus.

The Pegasus Insurance Group of Companies was born.

“I started telling people, if you ride with us, you will be above your competition,” Moya said.

Today, Pegasus is a $14 million company with headquarters in San Antonio, Texas, and Albuquerque, New Mexico. Moya, his wife, Gale, and their three children run a company focused on serving Hispanic consumers.

“I was Hispanic before Hispanic was cool,” Moya said, adding that he grew up speaking only Spanish until the age of 14.

Moya was born and raised in Grants, New Mexico, a small town that was a center for uranium mining between the 1950s and the 1990s. “Our town was mostly Hispanic, although we didn’t notice that in those days. I came from no money, but I came from a lot of love. My parents were the two greatest people in the world,” he said.

At a young age, Moya felt called to the

Catholic priesthood, so he left Grants at the age of 14 to attend St. Francis Seminary in Cincinnati. Moving to Ohio resulted in some culture shock.

“In the East, people talk differently. They have supper and they drink pop; they eat crazy things like sausages and Brussels sprouts, which was totally different from where I grew up.”

A change of plan

Moya graduated at the age of 23 and took some time off to discern whether the priesthood was his life’s work. He returned home to Grants and needed a job.

“I found work going door to door and collecting life insurance premiums for $100 a week,” he said. “That was back in 1974, so I have been in the business for 50 years now.”

consumers that I was dealing with,” he said. “My people couldn’t afford a lot, but they wanted a lot of life insurance, and I wanted to be able to provide that.”

Wanting to do more

Moya left the company he started with and eventually became a manager for a major carrier. But he wanted to do more and decided to go independent.

“Sales were going very well, and soon I was attracting attention from some of the companies,” he said. He eventually became an MGA.

“I didn’t even know what an MGA was, but they said they would help me recruit agents,” he said. “So they recruit agents and I tell the agents, ‘Let me tell you what I do. If you do it, you’re going to do well. If you don’t do it, well, you can keep on

“I would go to the carriers and say I needed material written in Spanish. And the companies would say the Hispanic population doesn’t have a lot of money, and they would question their mortality rate.”

Moya soon realized he couldn’t live on $100 a week, so he began selling life insurance. He sold 526 policies in his first year in the business, and thoughts of entering religious life were pushed aside.

He found his early success by upselling what customers were buying.

“Back then, it was mostly housewives who paid the premiums I collected, and I found that the agents who were there before me had sold them small policies — $500, $1,000 — and I would go in and say, ‘Well, funerals cost a lot more than that. Don’t you think you should add another $1,000 or $2,000 to that?’ And I started setting sales records.

“After my first year in the business, I thought, ‘Maybe this isn’t too bad of a way to make a living.’ And I liked getting dressed up and wearing suits every day!”

As Moya learned more about life insurance, he discovered products such as universal life, which he believed would make a difference for his clients.

“I thought it really felt right, for the

going the way that you’re going.’ And my story was basically: You must be focused. You must be persistent. Don’t leave the house until they throw you out.”

Business continued to grow, especially among Hispanic consumers. Moya paid attention.

“I noticed that my Hispanic agents stayed with me while my other agents would come and go. So I decided we would focus solely on the Hispanic market.”

But he found it was difficult to get carriers interested in focusing on this growing demographic.

“I would go to the carriers and say I needed material written in Spanish. And the companies would say the Hispanic population doesn’t have a lot of money, and they would question their mortality rate.”

An untapped potential

Moya persisted and his knowledge of the Hispanic community backed up his pleas for the industry to take this ethnic group seriously. Eventually, the carriers he

the Fıeld A Visit With Agents of Change

The glowing pegasus atop the old Mobil Oil headquarters in Dallas, TX was inspiration for the name of Moya’s Pegasus Insurance Group.

worked with began to realize the potential of the Hispanic market.

“Hispanics are very family oriented,” he said. “But I don’t think the insurance industry — which is still mostly white men — understand what that means. For example, when there’s a funeral, you have to go. That’s part of our culture.”

Risk aversion also is something common to Hispanics, he said.

“We don’t want to take a big risk; we don’t want to lose money. We’re afraid of the stock market because we don’t want to risk losing money.”

It’s a myth that most Hispanics are poor, Moya said. “We are growing faster than any other group in the U.S., we are becoming wealthier and we are starting businesses.”

Moya said that to be successful in serving the Hispanic market, an advisor must know that many Hispanic men have an aversion to life insurance.

“We’ve heard every excuse. ‘Well, a cousin of mine bought life insurance and he died two weeks later. No, we don’t want to do that.’ Or, ‘When she gets all that money, the boyfriend is going to take it.’ Or, ‘I don’t want another bill.’”

Storytelling is key to overcoming

objections, Moya said. He uses his own family as an example.

“I went to my father 10 years before he died and said, ‘We need to get you life insurance. You’re 10 years older than Mom. If something happens to you, who will take care of Mom?’ And he said, ‘You’re going to take care of Mom.’ And I said we would get him life insurance and I would pay the premiums, but eventually he took over paying them. Some years after Dad died, Mom needed to go to assisted living and she stayed there for 15 years. Where did she get the money to pay for that? From his life insurance. I invested the death benefit and kept it safe so she would be taken care of.

“You have stories. You need to use them, and people need to hear them.”

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.

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 srupe@insurancenewsnet.com.

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.

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New life premium up 6% in Q3

After a strong third quarter that saw life insurance new premium rise 6%, LIMRA executives were ready to declare 2024 a fourth consecutive year of record-high premium.

Total new annualized premium jumped 6%, to $3.9 billion, in the quarter, according to LIMRA’s third-quarter 2024 retail individual life insurance sales survey. The number of policies sold in the third quarter was level with the same period in 2023.

For the year, new premium topped $11.6 billion, up 1% over the prior year’s results. In the first nine months of 2024, policy count was flat. Policy count had slipped during the second quarter.

“Following solid third-quarter results and strong preliminary October sales figures, LIMRA expects 2024 will mark the fourth year of record-high new premium collected for the industry,” said John Carroll, senior vice president and head of Life & Annuities, LIMRA and LOMA. “Barring an unforeseen economic downturn, LIMRA is forecasting life sales to grow in 2025.”

CHOIR SINGS ITS LAST SONG

Nearly three years after two financial service professionals launched a program to diversify industry events, Choir is singing its last song. Choir was formed in 2021 as a diversity certification program for financial services conferences. The program’s goal was to make industry events more representative of the U.S. population.

Choir also maintained a database, Choir Voices, which includes the contact information for diverse members of the industry who are available for interviews or speaking at industry events.

In addition, Choir maintained a list of Choir Certified Conferences, which were subject to assessment of their most recent event to determine the prominence and visibility of women, nonbinary people, and people of color on stage in comparison to their representation in the U.S. population. Source: LIMRA

Choir’s founders, Sonya Dreizler and Liv Gagnon, said that Choir has seen a significant drop in industry demand for diversity initiatives in the past two years . Specifically, there has been less interest in allocating dollars toward diversity, equity and inclusion initiatives, particularly regarding racial diversity efforts.

NIPPON LIFE CONTINUES $12B ACQUISITION SPREE

Nippon Life Insurance did more than $12 billion of deals in the last month of 2024, and Japan’s biggest insurer is expected to continue its buying spree into this year.

The insurer already poured billions into a pair of global insurers. Now Nippon Life is seeking to obtain a majority stake in the Los Angeles-based firm as the foundation of its global asset management expansion, President Hiroshi Shimizu said. It already has about a 27%

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stake in TCW, which is also 34.2% owned by private equity powerhouse Carlyle Group and the rest by management and employees.

In 2024, Nippon Life agreed to buy Bermuda-based Resolution Life Group Holdings for about $8.2 billion in the biggest takeover by a Japanese insurer. It also completed the acquisition from American International Group of a 21.6% stake in Houston-based Corebridge Financial for $3.8 billion.

PRUDENTIAL COMPLETES REINSURANCE DEAL WITH WILTON RE

Prudential completed its reinsurance transaction involving a portion of its guaranteed universal life insurance block with Wilton Re.

The deal is part of Prudential’s strategy to focus on higher growth and capital-efficient operations. Prudential also disclosed the restructuring of a series of internal captive reinsurance arrangements tied to its in-force term life insurance block.

Prudential said that these adjustments align with its ongoing efforts to optimize its financial operations and improve long-term performance.

Whole life new premium totaled $1.3 billion in Q3, down 3% from the prior year’s results.

What I wish I knew when I started out in life insurance

A recently retired agent looks back on lessons learned and what newer agents can learn from them.

By Steve Spector

As I reflect over the past 43 years, I wanted to share some key elements that I hope will help newer agents succeed in our amazing business. An agent’s career path can and will change over time, and mine certainly did.

My career began as a 23-year-old agent with Northwestern Mutual. I had no clients, I had just graduated from the University of Wisconsin-Madison, and I also had no salary! In 2003, I decided to retire from Northwestern Mutual and join the largest locally owned CPA and advisory services firm in southeastern Wisconsin., Kolb & Co. We then merged with Sikich, which was a top 25 CPA firm in the country. This is where I ended my

career, as the partner-in-charge of the insurance services division.

What I had in February 1981 were some attributes that I now know would become huge assets down the road. These attributes were:

1) A very strong belief that life insurance was the most important coverage a person could possibly buy. What other asset could create cash at a discount when a person needs it the most? What was more important to a family or business than to insure a human life?

2) An extremely positive attitude. Attitude, not aptitude, determines altitude. When a new agent begins their career, they need to know that this business is a marathon, not a sprint. We are in a name-processing business, and you never want to run out of names. Becoming a trusted advisor is not something you do, it is something you earn. It is up to you, as the agent, to invest in the relationship and become that trusted advisor.

3) After examining how I could build my business, I decided to make it happen. I chose to design it using Al Granum’s 100 lives approach. I knew that if I could make the prospect into a client, I would develop a long-term relationship and trust, which would enable me to work with them for many years to come. As a new agent grows their career, they will become familiar with the ins and outs of the business. We all develop our own style of selling. We incorporate our personalities into our own techniques. We each evolve into a unique way of doing things, which we simply call “my way.”

100 lives annually

Focusing on writing at least 100 lives annually would guarantee me success. I learned this from Al Granum and used his system religiously. It clearly works. So, in my first year, I sold 120 lives. Young agents need to call on prospects through referrals only. I have never made one cold call. It may take a bit longer

Young agents need to call on prospects through referrals only. I have never made one cold call. It may take a bit longer using the referralonly method, but it is far more effective than coldcalling.

using the referral-only method, but it is far more effective than cold-calling. Earn your referrals from your clients and centers of influence by showing them that you do quality work. People will refer you if you ask!

You must do these things every day:

1) Stay focused on being organized in your scheduling. Set up a breakfast and a lunch meeting daily. Try and see (or meet on Zoom) with between five and seven people every day. In my opinion, there is nothing better than a face-to-face meeting with new prospects. It is much harder to initiate a solid relationship with someone new over the computer.

2) When you receive referrals, call them promptly. Do not delay, because if you do, someone else will contact them first.

3) Cross-sell multiple policies. These cases are opened up by doing thorough fact-finding interviews. So, insure dad, mom and the children for life insurance, and always discuss the importance of disability insurance for the breadwinner. In the business setting, insure the owner and key people for both life and disability coverage.

4) Hire an assistant. They can handle your daily administrative duties such as scheduling appointments, conducting insurance company contacts and following up with clients. This will allow you to focus on seeing clients and prospects.

By writing 120 lives in my first year, and doing what I suggest above, my production skyrocketed. I was fortunate to write between 400 and 500 lives for 20 straight years at Northwestern Mutual and led the entire field force in lives sold in 2003.

You must add new clients to your system each year, without exception! I added 80 to 100 new clients into my system every year. When you add new clients, you will have your existing clients and the new ones to contact each year going forward.

What I didn’t know then

Here’s what I know now that I didn’t know when I was starting out.

People buy life and disability insurance for emotional reasons, not logical ones. New agents must spend a lot of time perfecting their fact-finding techniques. This is where the sales are made! The agent must politely disturb the prospect so they feel uncomfortable. You need to look for and pinpoint the problem by asking questions such as “Would your family be financially secure if you died last night?”

If we can identify a problem that is going to cost the prospect or their family money, they need insurance. Make sure you have found the problem, that you recognize it, that you understand it so well that you know the price of doing nothing about it. You will need to show your prospect that by doing nothing, it will cost them dollars, but by doing something, it will cost them pennies!

Some people think that they are invincible. We know that nobody is. The art of questioning when it comes to protecting an income is very important. Questions such as “If you get sick or hurt, there are four sources of income for your family: relatives, friends, charity or insurance. Which do you prefer?

“When you land in the hospital, what do you want me to send you — a get-well card or a check?

“If you become disabled and cannot work, do you have enough money coming in each month to pay your bills without tapping your invested assets?”

As you see, these questions create an uncomfortable feeling, but they must be asked to show the importance of protecting one’s income and to motivate your prospect to act in their best interest.

My belief has been that if I could not earn a referral from a client, prospect or friend, I did not deserve to work with that person. If you can acquire 20 to 30 new referred leads per week, that will set you up for building your network. It made me feel good to know that people were willing to refer me to their contacts, and when these referrals became clients, they then referred me to new people. I called this the “snowball effect.”

Overcoming objections

In all forms of sales, there are objections. I loved hearing objections, because I knew right then that the prospect was going to buy something from me, as there was a

dialogue taking place. How did I overcome objections, and how can any new agent?

» Use tact. Do not give the impression of being overly aggressive, impatient or angry.

» Maintain a real interest in the prospect’s needs. There should be a feeling that the two of you are working together to solve their financial needs.

» Tell a story to prove your point. People love hearing stories. Develop a book of illustrative stories that you can draw on readily and can tell with enthusiasm.

When I was starting out, I also didn’t know about consumers’ perception of term insurance. Some people said that

» I never hit a sales slump because I always made sure that I made at least two sales every week. If I did hit a slump, I would do one thing: keep working!

» The best life insurance policy is the one that is there one day longer than the client. Often, this would be a permanent life policy.

» Be persistent. Spend time on building client relationships. Focus on the long term. Stay positive.

» Whatever you do, remember client appreciation is the art of making others feel special.

Some people think that they are invincible. We know that nobody is. The art of questioning when it comes to protecting an income is very important.

instead of spending a lot of money on permanent insurance, they would prefer to buy a term policy and “invest the difference between the two.”

Assume the person purchased a 20-year term plan. Now, I know that if they are still alive at the end of the term, the term plan will jump in price, and if they still need coverage, they will need to buy a new policy at an older age at higher cost and hope that they are still insurable. Further, it’s likely they did not invest the difference but used the money for various life items.

I sold millions of dollars of term insurance over the years, and happily so. We then converted the majority of these policies to permanent coverage over time. Whatever the need was, I made sure that it was met!

A few other things I learned along the life insurance journey:

I hope these ideas and tips will provide new agents with the motivation to work hard, protect your clients and most of all, enjoy our wonderful business. I have made a big difference to thousands of good human beings, and so can you!

Steve Spector is a recently retired partnerin-charge of insurance services for Sikich. He has written $3 billion in death benefits on more than 15,000 lives in his 43-year career. Contact him at steve.spector@innfeedback.com.

Like this article or any other? Take advantage of our awardwinning journalism, licensure and reprint options. Find out more at innreprints.com.

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ANNUITY WIRES

Widow sues insurers over annuity sales

The widow of a New York City man who died by suicide is suing brokers and insurers for allegedly selling him improper annuities.

Joan Jacobson claims her late husband, Jay, suffered from dementia and was preyed on by a trio of brokers. The brokers sold Jay Jacobson $2 million worth of annuities with no death benefits from 2019 and 2023, Joan Jacobson said.

The lawsuit names USAA Life Insurance Company, New York Life Insurance and Annuity, Fidelity, and Massachusetts Mutual Life as defendants.

Jay Jacobson clearly suffered from dementia, his wife said in the lawsuit filed in New York Supreme Court.

“At the times these annuities were sold, [Jay Jacobson] was unlikely — by virtue of his advanced age and dementia — to live more than five years, let alone the near decade necessary to recoup just the mutimillion-dollar principal outlay,” the lawsuit states.

On July 27, Jacobson, 84, died after jumping from a penthouse apartment at the Anagram Columbus Circle at 1 West 60th Street.

CALIFORNIA BILL LIKELY MEANS CHAOS FOR ANNUITY SALES, EXPERT SAYS

California legislation that took effect Jan. 1 is certain to cause confusion for agents selling annuities, one consultant says.

Under Senate Bill 263, agents who sell cash value life insurance or annuities in the state will be required to undergo training to ensure compliance with new regulations. These regulations are designed so that agents can sell life and annuity products that are only in the consumer’s best interest.

The trouble is, many insurance agents do not seem to be aware of the new training requirements, according to Cynthia Davidson, director of content and compliance at ExamFX, an insurance certification institute.

“There’s so much confusion out there. There hasn’t been a lot of notification .… We had a couple of polls we did on our webinar asking ‘Did you know about

this training requirement?’ and people were like, ‘Nope,’” she said.

At the same time, some consumer groups still feel strongly that the bill will do more harm than good. In an interview with InsuranceNewsNet, Brian Brosnahan, co-founder and executive director, the Life Insurance Consumer Advocacy Center, slammed Senate Bill 263 as an “anti-consumer bill” that will only lead to more customer complaints in the future.

METLIFE AND GENERAL ATLANTIC FORM NEW ANNUITY REINSURER

MetLife and General Atlantic are forming Chariot Reinsurance as a Bermuda-based life and annuity reinsurance company. Chariot Re is expected to launch in the first half of 2025 and will have a future

strategic reinsurance partnership with MetLife, a news release said.

MetLife and General Atlantic anticipate Chariot Re will have an initial combined equity investment of over $1 billion and that they will each initially own approximately 15% of the equity in Chariot Re, the release said.

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The remaining equity interests will be held by third-party stakeholders, including Chubb, a global property and casualty insurer, which is expected to be an anchor third-party investor.

LAWSUIT ALERT: CALIFORNIA TEACHERS CLAIM IN-PLAN ANNUITY RIDER FEES ARE UNFAIR

Several California teacher lawsuits over in-plan annuity costs have been consolidated into one case involving rider fees.

The judge is giving participants plenty of leeway for mediation, with trial dates scheduled for November and December 2026.

The initial lawsuits, filed in the Northern District of California, alleged several violations of the California Education Code and the California Unfair Competition Law. Teachers claimed the cost of the annuities ate into their 403(b) retirement plans.

The insurers named as defendants are Life Insurance Company of the Southwest, North American Company for Life and Health Insurance, and Midland National Life Insurance Company.

The cases were filed in 2023. Plaintiffs allege that the insurers are “charging teachers millions of dollars in undisclosed and unauthorized fees on their supplemental retirement savings plans, in violation of” the California laws.

American Council for Life Insurers

Three tips to adopt digital capabilities into your practice

Ways to streamline operations and enhance client engagement

By Craig Hawley

Digital technology is revolutionizing the retirement planning industry — and the world — as we know it. Mobile apps are allowing users to manage retirement accounts with unprecedented convenience, artificial intelligence is improving customer service through advanced chatbots and blockchain technology is offering increased transparency and security.

It’s also something investors are seeking out. According to the Nationwide Retirement Institute’s 2024 Advisor Authority survey, 10% of investors began working with their advisor because of their knowledge or use of artificial intelligence, and 9% began doing so because of their advisor’s use of mobile technology.

However, embracing the ever-evolving digital landscape can be scary, and it’s understandable that some advisors are

What is digital first strategy?

• Emphasizes prioritizing digital solutions that work for the consumer as well as financial professionals.

• Meets customers and financial professionals in their digital channels and in the tools they support.

• Prioritizes fast, efficient data that is cost-effective, scalable and flexible to support these digital experiences.

• Optimizes automation and digital tools to streamline processes and reduce manual work and friction in the process.

hesitant to adopt new tools. In fact, according to a Cerulli report, 29% of advisors listed managing technology needs as one of their practice’s greatest challenges. Reasons for this may include limited resources, resistance to change or even genuine mistrust of new technology.

Although it’s clear the benefits of digital tools do not come without risks, embracing these tools is crucial to staying ahead of the competition and helping ensure seamless transactions for clients.

For example, in the annuity industry, the Insured Retirement Institute is moving to a digital-first strategy that proposes adopting fast, modern, streamlined processes for each step in the financial professional and consumer journey. IRI is essentially creating standardized rules of engagement for how the industry delivers essential data to facilitate faster transactions and easier management of annuity products.

If you haven’t already, the time is now to at least dip your toe into the digital solutions pool or risk falling behind as your competitors find ways to make new technology work for their practice. Here are a few tips to help advisors begin integrating digital tools into their annuity practice — or adopting the ones recommended by their firms — to help streamline operations and enhance client engagement.

1. Educate yourself and your team on the latest digital trends and tools.

The digital landscape is changing faster than ever, and it’s important to stay up to date on the latest trends and developments. Staying informed about innovations impacting the industry is one of the most important things you can do.

Regularly read industry publications and blogs from fintech companies that are highlighting new tools and technologies. Explore online courses and certifications, such as those offered through LinkedIn Learning, to expand your knowledge about data analytics and digital tools specific to the retirement industry.

You should also talk with your carrier partners about the tech tools they are adopting — and those they think you should incorporate in your practice.

Most important, seek feedback from your clients on their digital experience to continuously improve your service offerings. Nationwide’s Annuity Marketing

team conducted a survey with annuity owners earlier this year and found the most valuable resource for understanding annuities is online account access. In fact, 82% of annuity owners surveyed had online account access, with 22% checking it every three to five months and 20% checking it every one to two months.

Just by asking what their preference was, we learned more about what clients are looking for when it comes to digital capabilities and ease of use — something advisors can quickly and easily do in interactions with clients to set themselves apart from the competition.

Adopting the right tools — or leveraging the ones recommended by your firm — can help you stay ahead of the curve as digital technology continues to evolve.

can augment work and provide better customer experiences for partners and customers.

For example, you can use generative AI to draft personalized emails and reports, helping ensure accurate and tailored communication with clients. GenAI also can help with administrative tasks, freeing up time for strategic planning and personalized advice. Because it can process vast amounts of data quickly, providing insights into market trends, client behavior and investment opportunities, GenAI can help you make informed decisions and offer better advice. However,

2. Choose the right tools for your practice.

Adopting the right tools — or leveraging the ones recommended by your firm — can help you stay ahead of the curve as digital technology continues to evolve. I suggest you consider three types of tools as you evaluate what’s best for your practice.

Aggregation tools, which can help consolidate clients’ financial data from various sources into one platform, can make it easier to analyze, provide comprehensive advice and offer personalized recommendations.

Performance reporting tools can generate detailed reports on investment performance, helping you track and communicate portfolio progress to clients, which will improve your efficiency and accuracy.

Comprehensive planning tools can assist in creating detailed financial plans, modeling scenarios and optimizing tax strategies.

3. Embrace artificial intelligence.

AI technologies can help improve efficiency, enhance client relationships and drive business growth. Generative AI

it’s important to remember that GenAI is not replacing human intelligence; it is complementing it. Responsible use of AI requires a human-in-the-loop approach to ensure quality, accuracy and ethics.

Integrating digital tools into your practice will not only provide value to your clients but position your business for future success as well. This tech isn’t only streamlining operations; it’s opening doors to financial inclusion, reaching clients who’ve never had access to these services before.

It’s an exciting time to be in the retirement sector, with technology driving growth and opportunity like never before. Embrace these tools to deliver topnotch service and grow your client base. Remember, staying tech-savvy is not optional — it’s essential to thrive in today’s evolving financial services landscape.

Craig Hawley is president, Nationwide Annuity. Contact him at craig.hawley@innfeedback.com.

HEALTH/BENEFITSWIRES

Health care costs are top trend to watch in 2025

Health care costs, vendor accountability and the impact of the 2024 election are among the health and well-being trends to watch in 2025, Business Group on Health announced. Other top trends for 2025 include employers addressing escalating pharmacy spending, reassessing well-being programs, continuing to focus on mental health, helping employees navigate services, and effecting meaningful change in health care.

Pharmacy-related costs, which now consume more than 25% of employers’ U.S. health care budgets, show no sign of abating. To address overall health care costs, employers must tackle pharmacy expenses by leveraging private-sector strategies while engaging policymakers, Business Group recommended.

Employers also plan to reassess their current pharmacy partners; one-third anticipate taking a closer look at their pharmacy benefit managers. Businesses will also evaluate coverage approaches for expensive GLP-1s in the broader context of their obesity and cardiometabolic health strategy.

This year also presents an opportunity for human resource and benefit leaders to reevaluate their organizations’ well-being initiatives, Business Group said, especially as chronic conditions and health care costs continue to surge worldwide.

QUOTABLE

We’re finding that people are living more healthily earlier in life but then have a longer long-term care need.”

— Robert Eaton, principal and consulting actuary, Milliman

of qualified health care professionals and an insufficient number of hospital beds.

In fact, five Western states rank among the top 10 states where health care is least accessible: Utah, Nevada, Arizona, Wyoming and Idaho.

CVS HEALTH TESTING PRIMARY CARE MODEL

MANY WORKERS PAYING MORE FOR LESS COVERAGE

Small-business employees face higher health insurance deductibles and premium costs compared to their counterparts at larger companies. And despite paying more, these workers receive coverage with less financial protection.

That was the word from The Commonwealth Fund, which studied trends in employer health insurance costs.

In 2023, small-business employees paid an average of $7,529 annually for their share of family premiums — $733 more than employees at larger firms. In nearly all states, small-firm employees also face higher deductibles. In 2023, the

average family plan deductible was $5,074, more than $1,500 higher than the $3,547 average for large-firm employees.

HEALTH CARE IS LEAST ACCESSIBLE IN UTAH

Nearly half of Americans (45%) can access and afford quality health care when needed, according to a recent survey from Gallup and West Health. But in some states, accessing health care may be more challenging than in others due to high costs, a lack of health insurance coverage and a shortage of health care providers.

Forbes Advisor compared all 50 states across 14 key metrics and found Utah tops the list of states where health care is least accessible, while Massachusetts ranks as the best state for health care access. Utah’s ranking was based on its lack of resources, including low numbers

CVS is moving to a space some of its competitors have abandoned — providing primary care. The pharmacy giant launched in-network primary care earlier this year at its MinuteClinic locations in Houston and San Antonio, and it has since expanded to markets in Florida, Georgia and North Carolina, with more expected this year. The program is currently limited to certain Aetna health insurance plans, but CVS Health is in discussions to add additional payers.

Competitors such as Walgreens and Walmart have already abandoned or scaled back their forays into primary care, citing the challenges associated with entering the market. Navigating the health insurance landscape is complicated, and the reimbursement rates that providers are paid by insurance companies are lower for primary care than for other services.

Experts noted that CVS Health has one clear advantage — it owns Aetna , which reduces the uncertainty of negotiating reimbursement rates for primary care providers.

Independent Health Association of Buffalo, which operates two Medicare Advantage plans, will pay up to $98 million to settle fraudulent billing allegations.

Source: KFF Health News

What is the future of long-term care in the U.S.?

Experts weigh in on the increasing need for long-term care and the possible solutions to pay for it.

By Susan Rupe

The age wave means more older Americans need long-term care — and that need will only increase.

That was the word from Bryan Langdon, Ash Brokerage’s national spokesperson for long-term care, during the National Association of Insurance and Financial Advisors’ Peak 65 Impact Day.

“People are seeing their parents, their grandparents, their neighbors needing care at an advanced rate,” he said. “Our clients, our friends, our neighbors are coming to us asking, ‘What do we do about long-term care? Do I have a need? Is insurance an option?’ There

are many tools out there to help with this, and we must get ready for it.”

The baby boom generation is changing the way society and the industry look at long-term care, Langdon said, and consumers are beginning to ask about LTCi at younger ages.

“It used to be that people ages 65, 70 started asking us about long-term care insurance,” he said. “Now we’re getting questions about it from people in their 50s.”

‘Enormous pressure’ on the care system expected

The baby boomers will “put enormous pressure on the care system, not only because there are so many in that generation but because they are living longer,” Langdon said. If the supply of care in the form of long-term care facilities or home care workers doesn’t accelerate to keep up with demand, the price of receiving care will skyrocket.

Langdon suggested advisors help their

clients devise a care funding solution that considers all income streams – not depending only on LTCi to cover care costs.

“Look at where they are in retirement, what income streams they have. Maybe long-term care insurance doesn’t cover 100% of the cost, but you can layer it in with income sources such as Social Security, pension, retirement funds or rental income. Don’t make the insurance cover 100%, but layer it in with a supply of income, SS, pension, retirement funds, rental income.”

Clients who have most of their wealth in qualified funds, such as 401(k) accounts, need their advisor to help them find nontaxable ways to pay for future long-term care, he said.

“There are many tools available for us to pay for long-term care,” he said. One tool is permanent life insurance with an LTC rider. In addition, he said, group LTCi is making a return to the marketplace.

Are partnerships the answer?

Long-term care is a financial risk that will touch most Americans, their families and the people surrounding them. The risk is getting larger and it’s not going away. Strategies to deal with an increasing need for LTC in an aging population were on the agenda during the Employee Benefit Research Institute’s Winter Policy Forum.

“The majority of us will need long-term care,” said Ben Veight, director of the WA Cares Fund. “It’s not only a prevalent risk, it’s an expensive risk, and that makes it a prime candidate for insurance.”

Veight said that most LTC planning is “based on an antiquated assumption that women and people of color provide caregiving for free. But it’s also important to recognize that family caregiving is not free.”

Many family caregivers drop out of the workforce to provide care, he said.

health assistance, transportation to medical appointments, medical equipment and residential and nursing home care. It’s funded with a 0.58% payroll tax collected by employers. Self-employed individuals can opt into the program as well.

But Veight admitted WA Cares “is a modest premium for a modest benefit.” He called for a public/private partnership to help the states address long-term care needs and funding.

More public/private partnerships

An actuary also said he believed public/ private partnerships are a way to address the long-term care crisis.

Robert Eaton of Milliman pointed to LTC claims stemming from Alzheimer’s disease and other forms of dementia as driving the cost and duration of care.

“Cognitive impairment claims make up 40% of all claims paid by long-term care insurers,” he said.

What will be new modes of care and how will people receive care in the future?

No one knows, yet this is what we are trying to predict.

journey and find care.

“No one entity can do this alone,” White said of funding care.

“We want to be able to partner so people can have the coverage they need and afford it. We want to make sure the middle market has access to coverage. But we don’t see a partnership on the catastrophic end, we see it more on the front end. A state program to cover the earliest costs of care, private long-term care insurance in the middle and federal catastrophic coverage at the end.”

Difficult to predict

“If there’s one thing we know about longterm care, it’s that it’s difficult to project how care will be received,” Eaton said. “What will be new modes of care and how will people receive care in the future? No one knows, yet this is what we are trying to predict.”

Eaton predicted the private LTCi market “will muddle through … they will figure

The result is that those caregivers miss out on years of income as well as years of 401(k) matches and Social Security earnings credits.

Veight said 11% of people in his state of Washington are family caregivers.

‘Problem will get much worse’

“Most of us don’t have a way to pay for longterm care,” he said. “The problem will get much worse in the coming decade. In our state, the population of those 85 and over will quadruple in the next 10 years.”

In addition, he said, as the population ages, fewer people will be of prime caregiving age, creating a shortage of available care.

WA Cares is the first-of-its-kind state program in the U.S., which provides up to $36,500 in benefits that can be used to pay for expenses, such as residential

Medical advancements are enabling doctors to diagnose dementia and Alzheimer’s sooner, he said. “We’re finding that people are living more healthily earlier in life but then have a longer longterm care need,” he said.

Eaton called for insurers to develop a product that would cover the early years of a long-term care claim and then a public program that would kick in as the care need is prolonged.

A three-pronged approach to funding long-term care

A three-pronged approach to funding long-term care was one possibility discussed by Lynn White, president and CEO of CareScout Insurance, a subsidiary of Genworth Financial. CareScout helps older adults and their families navigate the aging

out the economics of providing care. But we’re not optimistic.”

He said innovation is needed as the LTCi market evolves to serve a growing market.

“That’s what a public/private partnership offers — some way to offset the uncertainty.”

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.

Middle-income earners exceed retirement savings expectations

Middle-income households are generally applying strong retirement savings habits and behaviors, even as they balance competing financial priorities, according to a survey from Principal Financial Group.

According to the survey, Principal Real Life Retirement Journeys, 77% of middle-income households (those earning between $50,000 and $99,999) are saving for retirement at an average rate of 7.8% of their income before receiving additional contributions from their employers. In addition, 40% of the middle-income household respondents anticipate that their retirement will be better than the one they first envisioned

“The more we can personalize and tailor experiences to meet the unique needs of individuals, the better we believe their outcomes could be.”

Teresa Hassara, senior vice president, Principal Financial Group

Why are middle-income households exceeding their retirement savings expectations even when other groups do not appear to be saving enough for retirement?

“Access to a workplace retirement savings plan is the key,” explained Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal. “Of the 1,000 Americans we surveyed, 88% are saving for retirement, with 89% of those individuals utilizing their employer’s retirement plan. This is double the number of people using IRAs (45%) and is three times more than those with a pension (27%).”

More than half of Gen X investors are ‘sandwiched’

Generation X has entered the sandwich generation, taking care of parents and children. And the financial responsibility of supporting both parents and children is also taking a toll on Gen X investors’ retirement savings.

More than half (56%) of Gen X investors currently provide financial support to their parents or children, according to

Savings bump

In 2023, the average combined 401(k) savings rate was 12.7%, up from 12.1% in 2022.

Source: Plan Sponsor Council of America

Americans lag in knowledge of financial options

A slim majority of U.S. consumers consider themselves financially literate, but their use of basic financial accounts and insurance policies severely lags behind.

According to a recent Million Dollar Round Table survey, 53.8% of Americans rate their own financial literacy as good (40.5%) or excellent (13.3%), including 59.2% of men and 49.3% of women. However, far fewer Americans report owning important financial tools, including retirement savings accounts, high-yield savings accounts and life insurance.

Only 35.3% of Americans have a 401(k) or Roth 401(k) account , the most popular tool included in the survey, and another 36.3% of Americans say they know how these accounts work. Slightly fewer Americans (31.6%) own stocks, though another 39.2% know how they work. Only 28.2% of Americans have an IRA or Roth IRA, and another 34.6% know how they work.

Nationwide’s tenth annual Advisor Authority study. Among them, 21% report taking on large levels of debt to manage this responsibility.

One in five (20%) reports being unable to save for retirement , while 23% have reduced or halted retirement savings due to supporting their children and/or parents. What’s more, 16% have tapped into retirement accounts or investments to manage these financial pressures.

Is a Roth IRA conversion key to strategic tax planning?

Many clients will benefit from a Roth IRA conversion, but there are several considerations to keep in mind. • Joe Schmitz Jr.

As financial advisors, our heroics don’t typically make for riveting dinner conversation, but in our daily duties, we frequently step in and save the day. We wield advanced modeling tools to optimize our clients’ retirement portfolios. We brandish calculators and sophisticated software to free clients from nagging tax liabilities and penalties.

One tool that seems to surface more and more in our daily quest to help clients is the Roth IRA conversion.

Why consider a Roth IRA conversion?

Many of our clients benefit from the tax-free growth and withdrawals they receive during retirement with a Roth IRA conversion. Unlike traditional IRAs, our clients’ contributions to a Roth IRA are made with after-tax dollars. Clients will not receive a tax deduction for the year they make their contribution, but their qualified withdrawals during retirement are completely tax-free. This can result in quite a bit of tax savings, especially if

their investments grow substantially. Many clients also appreciate that Roth IRAs do not force them into required minimum distributions. The IRS mandates that retirees who own traditional IRAs begin taking distributions right around age 73 or 75, yet because these distributions are added to taxable income, it pushes many people into higher tax brackets. Additionally, since Roth IRAs do not have RMD requirements, Roth IRAs offer retirees greater flexibility when managing their tax situation.

Finally, Roth IRAs can be an excellent vehicle for clients who want to leave a financial legacy. Roth IRA beneficiaries continue to enjoy tax-free withdrawals, although they are subject to the 10-year rule under the SECURE Act, which mandates that the account be emptied within 10 years of the original owner’s death.

Gauging the ideal timing for Roth conversions

Converting to a Roth IRA cannot be a snap decision. Strategic timing is needed to maximize benefits and minimize tax burdens.

One optimal time for conversions is during lower-income years. For many clients, this occurs after they retire but before they begin taking Social Security

or other significant income streams. Converting in these years can help ensure your clients remain in lower tax brackets and can minimize their tax hit from the conversion.

Another opportune moment for a Roth conversion is during market downturns. Converting during a dip means transferring assets at a lower value and reducing the tax bill. As the market recovers, your clients’ assets can then appreciate in the tax-free environment of the Roth IRA. Due to recent tax legislation, current tax rates are relatively low, so many of our clients will find it prudent to perform conversions now. I say this in anticipation of possible higher tax rates after 2025 when provisions of the Tax Cuts and Jobs Act are set to expire unless extended by new laws.

Assessing the tax considerations with a Roth conversion

While a Roth conversion can be incredibly beneficial in the long run, we must remind clients about the immediate tax implications. When we help clients convert from a traditional IRA to a Roth IRA, the amount we convert is treated as taxable income, potentially increasing our clients’ tax bills that year. However, we can guide them on strategies to minimize

these tax burdens.

As financial advisors, we can counsel our clients to spread their conversions over several years to avoid being pushed into higher tax brackets. This strategy, often called “partial conversions,” allows for a more manageable tax burden each year.

Converting just enough each year to “fill up” the lower tax brackets without pushing the client into a higher bracket — for example, converting up to the top of the 24% tax bracket if it makes sense for the client’s situation — is an effective strategy.

Calculate the tax impact precisely and strategically decide how much to convert each year. For your clients over age 59½, consider using existing retirement funds to pay the taxes. This allows more of the converted amount to remain in the Roth IRA.

To offset the tax implications of a Roth conversion, take advantage of years when your client can leverage significant deductions or tax credits. Large out-of-pocket medical expenses, business losses or charitable contributions can mitigate the immediate tax impact of the conversion.

It’s also important to consider the conversion’s impact on other taxes and benefits. For example, converting large amounts could increase the taxation of Social Security benefits or raise Medicare premiums due to higher reported income.

Long-term planning strategies

A strategic Roth conversion involves more than immediate tax considerations. It’s part of a broader long-term tax planning strategy.

By performing Roth conversions, our clients can reduce the size of their traditional IRAs, enabling them to lower their future RMDs. This can be particularly beneficial for those who anticipate being in higher tax brackets in retirement due to substantial RMDs, Social Security benefits or other income sources.

A key tenet of long-term strategic tax planning is tax diversification. Having assets in a mix of taxable, tax-deferred and tax-free accounts gives clients more flexibility in managing their tax situations in retirement. Roth IRAs play a crucial role in ensuring this diversification, allowing our clients to withdraw

from tax-free sources when it’s most advantageous.

Under the income-related monthly adjustment amount, our higher-income clients face increased Medicare premiums. However, by using Roth IRAs, they can reduce their modified adjusted gross income and avoid higher premiums.

Avoiding common mistakes when converting

While Roth conversions offer several benefits for our clients, they also present several pitfalls. One of the most common mistakes our clients make is not considering future tax rates.

If a client’s future tax rate is expected to be lower than their current rate, a conversion may not make sense. However, many clients — especially diligent savers — may find themselves in similar or higher tax brackets in retirement

check for contradictory penalty assumptions. If they are under age 59½, using funds from the converted IRA to pay taxes might incur a 10% penalty on early distributions.

Another frequent mistake involves overconversion. Converting too large an amount in one year can push our clients into higher tax brackets, negating some of the conversion’s strategic benefits. Advisors should emphasize the importance of partial conversions and the potential to spread them over multiple years.

A final mistake I will mention is failing to plan for the widow’s penalty. When one spouse passes away, the surviving spouse files as a single taxpayer, often resulting in higher tax rates on the same income level. Planning conversions while both spouses are alive mitigates the risk of incurring this penalty.

By performing Roth conversions, our clients can reduce the size of their traditional IRAs, enabling them to lower their future RMDs.

due to RMDs, Social Security and other income sources.

The second common mistake is ignoring the Medicare premium surcharge. Conversions can impact Medicare premiums, and higher reported income can trigger a premium surcharge, increasing the cost of Medicare Parts B and D. Therefore, it’s essential to plan conversions to avoid or minimize these surcharges whenever possible.

A third error involves overlooking state taxes, which can also affect the cost of Roth conversions. Some states do not tax retirement account distributions, while others do, so financial advisors must consider the client’s state tax situation as part of the conversion strategy.

An additional error to watch for is failing to plan for RMD integration. Our clients often overlook how Roth conversions interact with their RMD strategy. With this in mind, we must educate our clients that RMDs from traditional IRAs must still be taken for the year of conversion if they are already subject to RMD rules.

Don’t allow your clients to neglect to

So as we help our clients fight for the worry-free retirement they deserve, Roth IRA conversions can be a key component in our strategic tax planning. They offer the one-two punch of tax-free growth and withdrawals in retirement.

Before converting, we empower clients to consider tax implications, other taxes and benefits, and potential future changes in tax laws. We help them time their conversion during lower-income years or market downturns to minimize their immediate tax impact. Additionally, our long-term planning strategies, such as reducing RMDs and ensuring tax diversification, arm them with greater financial stability and flexibility.

As financial advisors, we save more than the day. We save years for our clients, guiding them through a minefield of complex decisions that ultimately ensure a more secure and tax-efficient retirement.

Joe Schmitz Jr. is

founder and CEO of Peak Retirement Planning.

Contact him at joe.schmitz@innfeedback.com.

Confidence is the key to cold calling success

Self-assurance is crucial for cold calling success, and building it requires embracing discomfort and persistent practice.

By Susan Rupe

Confidence is the key to cold calling success, and that confidence comes from being uncomfortable.

That’s the word from Katelynn Blackburn, founder of Diligence Agencies, where she provides financial services to families seeking security and retirement planning. Blackburn also is an expert in cold calling, having done research on what makes for successful cold calling. She told InsuranceNewsNet that women are a bit better at that technique than men are.

“I think it’s because of our nature,” she said. “Our voices are more nurturing. But if you’re selling insurance, that can be more of a touchy subject. So if you do have an empathetic voice, you sound a little bit more trustworthy, along with the fact that a lot of people will stay on the line with you, because you’re not nearly as intimidating. I know a lot of women who do really well with phone sales. And I think that it comes down to they’re not necessarily better at cold calling than men, but if women are willing to put in the work, I do believe people will stay on the phone a lot longer than they will with men.”

But women also tend to be more reluctant to pick up the phone to make those cold calls than men are, Blackburn said.

“We’re worried about rejection, we’re worried about getting yelled at or doing something wrong. But if you can overcome that hurdle, you’ll surpass a man at cold calling every single time and people will be more receptive to listening to you.”

Women who build confidence will succeed at cold calling, Blackburn said, as nervousness and anxiety can be a hindrance to successful calling.

How to build confidence

“The way to build that confidence is by being uncomfortable,” she said. “When you put yourself in an uncomfortable position over and over again, you become more confident in overcoming it.

“My motto is, ‘Always live in the uncomfortable, be OK with being uncomfortable, and start living that way.’ That’s the only way you grow.”

“Everything is difficult if you make it difficult, but you can look at it a different way and say, ‘I’m going to become more confident’ and you can seek the discomfort and grow from it.”

Blackburn said she uses role playing to train the agents on her team to respond to objections and deal with different cold-calling scenarios.

Successful cold calling comes down to having the right mindset, she said.

“At the end of the day, cold calling is a numbers game,” she said. “And if you make enough calls and you’re willing to put in the work and you believe you can do it, there’s no way you’ll fail. If you’re not worried about the rejection, if you’re not worried about the outcome, if you just

put your head down and do the work and not think about those things, you’ll see success.”

Blackburn said she believes cold calling will never go away, despite consumers’ reluctance to answer calls from unfamiliar numbers.

“I think that people build a lot of relationships through cold calling. Not everyone wants to scam you. There are people out there who genuinely want to provide you with information that is useful to your life. There are a lot of businesses that don’t run off of leads. They rely on cold calling. I don’t think cold calling will ever go away because it is a very lucrative and profitable way of doing business.”

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.

Research has shown that while women project more empathy on the phone than men do, men are more willing to pick up the phone and actually make cold calls.

the Know In-depth discussions with industry experts

AI and ethics: What advisors must know

The use of artificial intelligence is expanding rapidly, but advisors must understand how to use this tool ethically.

By Susan Rupe

Artificial intelligence is making inroads into many aspects of the insurance industry — from underwriting to onboarding to filing claims. But one of the dangers of AI is that it is expanding faster than the industry and individual advisors can keep up.

The financial services community must collaborate to address the risks of AI and promote ethical decision-making, said Azish Filabi, managing director of The American College Cary M. Maguire Center for Ethics in Financial Services. She has spoken and written on the ethical principles guiding the use of AI in financial services, emphasizing AI’s impact on clients and advisors.

Filabi told InsuranceNewsNet that confidentiality is a key concern when advisors use AI.

“I think is important not to put any client information into a technology tool unless you’re absolutely certain what’s going to happen with that information, where the data is going and that the data is protected. So that’s one area of confidentiality that I think is important, not only from an ethical perspective, but it could have legal repercussions as well,” she said.

Confidence is another concern that Filabi said advisors must consider when using AI.

“Duty of care implies that you are knowledgeable about what you advise clients about and you take care that the

information you give is accurate,” she said. She said advisors must be confident that they are inputting the correct information into AI tools and confident that AI is giving accurate answers.

“Generative AI tools are designed to be stochastic, which means that each time an input is put into AI, you might not get the exact same answer every time,” she said. “It’s not like using a calculator, where if you put in the same numbers, the calculator is designed to give you the exact same answer every time. Gen AI tools are more creative, and that’s the beauty of them. They can present different outputs that maybe you wouldn’t think of as a user. There are right and wrong answers in what advisors do. If the information isn’t accurate and you’re relying on it, that’s problematic both from an ethics perspective and a legal perspective.”

Filabi cited a court case from New York state in which an advisor was hired as an expert witness to advise on an evaluation

matter relating to a mutual fund.

“They used a generative AI tool to assist with the calculations — they were looking at valuation over a certain period of time — and the court used the same tool to kind of double-check the calculation, and they got different answers each time. And as a result, the court didn’t accept the evidence in that case,” she said.

Filabi said she believes this case is an example of how an advisor’s use of AI as part of their process “is introducing a new risk that could have repercussions down that line that maybe you’re not thinking about today.”

“This not only poses reputation risks for the advisor, but it has an impact on the client as well.”

The Center for Ethics in Financial Services has been studying AI since 2020, a few years before ChatGPT was released to the public, marking the beginning of AI tools being widely available to the public.

“There are right and wrong answers in what advisors do. If the information isn’t accurate and you’re relying on it, that’s problematic both from an ethics perspective and a legal perspective.”

— Azish Filabi, managing director of The American College Cary M. Maguire Center for Ethics in Financial Services

“We started studying AI from the perspective of the ethical risk that AI could present in underwriting,” Filabi said. “We began studying AI at a time when there was a lot of emphasis on diversity and inclusion issues, and we wanted to make sure that processes are fair, unbiased and inclusive.”

From there, researchers began to study how to support ethical decision-making when AI is used in the industry.

“We focused on how industry leaders and regulators can think about AI as it’s embedded into things such as underwriting technologies,” Filabi said. “We provided a three-pronged framework that included audits, testing and certification that contemplated the different players in a chain of AI accountability and the role that each of those prongs might have in making sure that the data is accurate and there are no mistakes and that certain ethical observations have been embedded in the process.”

Understanding AI’s limitations

It’s important for advisors to understand the limitations of AI in order to use it ethically,

said Eric Ludwig, director of The American College Center for Retirement Income.

“You need to understand the knowledge component of AI,” he said. “These large language models are not necessarily databases of facts. They’re not like a big encyclopedia that spits out facts back to you. Their job is to generate text, and they are really trying to predict what the next word is in a sequence based on other patterns and probabilities from the data they were trained on. After someone understands that, then they can start to understand what those limitations are, and it goes back to the individual to verify that the output generated by AI is accurate.”

Advisors who use AI also must understand where the information used by AI goes.

“If an advisor is using these tools, they must realize that if they’re inputting personally identifiable information into it, that information could now become part of the large language model, which also means that it could potentially be extracted by someone else,” Ludwig said. “So it’s important to understand where the knowledge or data is going.”

When advisors use AI to determine the type of advice they give a client, are they obligated to inform the client that AI was used as part of the process? “My gut feeling is that they are not obligated to do so,” Ludwig said. He explained further.

“Let’s say I’m sending an email to someone. I don’t disclose that I used spellcheck, which is a type of AI. Just the same as if I ran a Monte Carlo simulation using Microsoft Excel or some other program.

“So I think it still goes back to the advisor having to be the one who is responsible for verifying whether the output is accurate. They are using the AI tool to generate some time efficiency, which is totally normal. That’s why we use technology in the first place.”

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 srupe@insurancenewsnet.com.

Insurers look to improve distribution productivity to meet customer needs

Carriers are making substantial investments to continue generating growth.

By Laura Murach

ALIMRA and Boston Consulting Group study revealed profitable growth as the most important priority for C-suite life insurance executives. A follow-up study explored the best practices that leading carriers use to measure and improve life insurance productivity.

Given the competitive nature of the life insurance industry, carriers must focus their strategies and initiatives on increasing the productivity of their financial professionals. Leading carriers align their strategic goals with key performance indicators used to evaluate financial professional productivity. They are also taking a systematic approach that includes continuous monitoring of production, identifying top performers and creating initiatives to help boost financial professionals’ productivity to help drive profitable growth.

Measuring performance is fundamental to the overall strength and health of life insurance companies. Regardless of the distribution channel, the most common KPIs used to monitor productivity of financial professionals are the numbers of policies and premium — both total and per policy. Additional metrics used include placement rates, persistency rates, policy retention rates and policy size by product.

Aligning strategies with the company’s distribution channel is key to increasing life insurance productivity. Carriers with affiliated distribution can benefit from a holistic approach and cross-selling. Independent distribution uses wholesalers who can help increase life insurance

AFFILIATED CHANNEL

Wholesaler engagement and increased ease of doing business can help become carrier of choice and drive growth.

The benefit of more oversight of their financial professionals allows for fast revisions and adjustments.

productivity. The service and support wholesalers provide to the financial professionals they work with is critical to a carrier’s success. Leading carriers are investing in technology and easy-to-use tools to increase the impact of wholesalers. Those carriers that can strategically define, measure and monitor wholesaler productivity that impacts sales and increases financial professional production are better positioned for growth.

Substantial investments are required to continue to generate growth. The research revealed that carriers are investing in sales support, both financial professional and customer-facing technology, and wholesaling to drive productivity. The ease of doing business is also top of mind for executives, and they are investing in making it easier for financial professionals to sell. Investing in data collection processes and analytic tools to track financial professional performance will also help drive growth. Carriers that rely on wholesalers are investing in the tools and technologies to help them better support the financial professionals they work with.

Improving distribution productivity is widely recognized as a significant driver of market growth. It is important for carriers to focus their initiatives and investments on growth — not only for their own success but also that of their financial professionals.

According to the 2024 Insurance Barometer Report by LIMRA and Life Happens, almost 4 in 10 American adults say they need (or need more) life insurance, which represents a life insurance need gap for about 102 million American adults. The top three reasons for not owning life insurance (or more of it) are, 1) It is too expensive — although the research shows consumers vastly overestimate the cost, 2) They have other financial priorities, and 3) They’re not sure how much or what type to purchase. In the research, almost half of adults say they would experience a financial hardship within six months if a primary wage earner were to pass away.

Aligning strategic goals with key metrics to measure productivity will help maximize growth, which can lead to greater success for both the insurance companies and financial professionals. Having companies increase their distribution’s productivity is important because it ultimately means more Americans will get the individual life insurance they need to protect the ones they love.

Laura Murach is research director, distribution research, with LIMRA and LOMA. Contact her at laura.murach@innfeedback.com.

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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

CBO’s deficit-reduction report doesn’t tell the whole story

We can’t afford to ignore the options outlined in the report.

By Diane Boyle

Any financial professional who questions the importance of being politically involved must review a publication released late last year by the Congressional Budget Office. “Options for Reducing the Deficit: 2025 to 2034” is a 110-page report that presents 76 ways Congress could slash spending and increase revenue. It gives the individuals who hold our nation’s purse strings a lot to think about. But not all the CBO’s ideas are good ones.

Coming in at over $36 trillion and growing by the second, our national debt truly is colossal. To pay off our country’s obligations, every adult and child in the United States would need to chip in more than $107,000.

Most of us don’t have that kind of money lying around. While many people would agree that reducing the annual budget deficit is a worthwhile goal, financial professionals understand better than most that some of the ways the government might alter spending and revenue would have profound consequences for the financial security of American families and businesses.

The CBO merely provides options and analysis. It does not set policy, and the current report explicitly states that it makes no policy recommendations. But the options outlined in the report are ones that members of Congress have included in past legislative proposals or may put forward in the future. We can’t afford to ignore them.

Just to pick a few of the 76 CBO options, consider whether any of the following would have an impact on your business or clients:

» Increase Medicare Part B premiums.

» Reduce Medicare Advantage benchmarks.

» Modify payments to Medicare Advantage plans for health risk.

» Reduce Social Security benefits for high earners.

» Raise the full retirement age for Social Security.

» Use an alternative measure of inflation to index Social Security and other mandatory programs.

» Increase individual income tax rates on ordinary income.

» Impose a surtax on individuals’ adjusted gross income.

» Raise the tax rates on long-term capital gains and qualified dividends by 2 percentage points.

» Tax carried interest as ordinary income.

» Expand the base of the net investment income tax to include the income of active participants in S corporations and limited partnerships.

» Change taxation of assets transferred at death.

» Reduce tax subsidies for employment-based health benefits.

» Further limit annual contributions to retirement plans.

» Eliminate certain tax preferences for education expenses.

» Lower the investment income limit for the earned income tax credit, and extend that limit to the refundable portion of the child tax credit.

» Impose a new payroll tax.

» Increase the maximum taxable earnings that are subject to Social Security payroll taxes.

» Increase the corporate income tax rate by 1 percentage point.

» Impose a tax on financial transactions.

As you can see from this list, it’s farfetched to believe that deficit-reduction debates won’t touch on issues important to our industry. That’s why it is vital for insurance and financial professionals to have a unified advocacy voice. No one is better positioned to understand how these proposals would impact American consumers or explain to lawmakers why policies need to encourage Americans to mitigate risks, prepare for the future and have confidence that they will be financially secure.

You have the unique ability to tell lawmakers how you work with your

clients and how the products and services you offer protect them and help them prosper. Real Life Stories, created and distributed by NAIFA’s Life Happens community, are great examples of the power of storytelling. These videos feature real American individuals, families and business owners along with their financial professionals and illustrate how our industry has come to the aid of people during times of great need. NAIFA has begun using Real Life Stories videos in our discussions with lawmakers to provide powerful and lasting examples of how insurance and financial services improve people’s lives.

Even if you haven’t been featured by Life Happens, every financial professional has a Real Life Story to tell. You have clients who would be much worse off if not for your services. Members of Congress need to know about them as they consider policies that could impact Americans’ financial security.

Being a strong policy advocate is an important part of serving the best interests of your clients, just like offering financial protection products to create financial certainty and help people navigate financial shocks. A great way to get started in advocacy is to attend NAIFA’s Congressional Conference on May 19-20 in Washington. You’ll learn how to create connections with lawmakers, make a strong impression and build confidence to be the best advocate you can be.

Financial professionals and our industry offer so much to American consumers and are a vital part of the economy. We can’t let all that you do be lost in the line-item figures of a government report. The best way to spotlight the value of insurance and financial services is to speak up and tell your stories.

Diane Boyle is the senior vice president for government relations at NAIFA. Contact her at diane. boyle@innfeedback.com.

Building a future of true financial security for all

We must develop a forwardthinking mindset for 2025.

By Maggie Seidel

For years, America has been fixated on the here and now, focusing on immediate financial needs without considering what lies further ahead. We tend to address the pressing issues — retirement ages, Social Security payments and short-term market trends — without taking a broader view of the long-term journey toward lasting financial security. It’s time to change that. This year, we must adopt a forward-thinking mindset and work toward a future where every American, not just a select few, can achieve a retirement marked by dignity and peace of mind.

The best time to build an exit plan is not when retirement is in sight, but the very first day you start your career. A well-thoughtout plan gives purpose to your work and provides a road map to ensure that when the time comes to retire, you’re prepared not just for the transition but also for a fulfilling chapter ahead.

Financial security in retirement is more than a target number; it’s a testament to a life well planned. Without a strategy that considers protection options, investments and annuities, many Americans will find themselves scrambling, unable to sustain the lifestyle they worked decades to create. This is where EY’s independent research comes into play. Their findings have shown that a holistic financial plan — one that integrates permanent life insurance, diverse investments and annuities — yields significantly better outcomes. It’s not just about one product or one solution; it’s about a synchronized approach that builds a strong, sustainable financial future.

The aging Social Security bridge

For nearly a century, Social Security has played an indispensable role in the financial health of our nation. It has been the backbone of retirement for millions, ensuring

countless retirees don’t fall into poverty. To me, it’s like a beloved, historic bridge that has connected generations safely across vast distances and eras, serving as a reliable support in times of need. However, time has taken its toll, and Social Security is now under strain.

It is well documented that Social Security faces solvency issues. An aging population, longer life expectancies and fewer workers supporting each beneficiary reveal a system that, in its current state, is unsustainable. While public policy fixes are essential — and I’ll leave that to the experts — there is a clear and pressing opportunity to reinforce this aging bridge with modern financial strategies that complement and support it.

Imagine an America where financial mastery and holistic planning are integrated into career beginnings. Picture a future in which individuals are empowered with the tools and knowledge from Day 1 to build secure, long-term plans for themselves and their families. Social Security is still very much an essential component of that plan, but it includes a much larger network of support — one that allows individuals to walk confidently across a strengthened financial bridge that yields decades of support.

As we look to 2025, we must commit to realizing this vision. This means promoting policies and programs that encourage early, comprehensive financial education and ensuring diverse financial tools are accessible to everyone. It also means policymakers and regulators working alongside the financial security professionals who dedicate their lives and careers to guiding millions of Americans toward this new path of security. Employers must also step up, supporting their employees in building financial resilience from the start.

Starting a career with a focus on longterm financial health offers more than future benefits; it gives immediate purpose to every paycheck and cultivates a sense of ownership that permeates our everyday lives. When people are confident about their financial future and can see the path

they’re marching down, I can only imagine what the contribution to their communities will look like, but I know they’ll certainly approach life with greater optimism.    By acting now, we can ensure that Social Security becomes part of a fortified framework. By fostering a culture of early, holistic planning, we create a future where individuals cross their financial bridge with confidence.

Writing the next chapter

The next chapter of America’s financial story needs to be written with foresight and integrity. It is our duty to future generations to look beyond today and map out tomorrow’s road. This year, 2025, must be the year we prioritize inclusive, comprehensive financial planning that leads to financial security for all. Only by moving beyond temporary solutions can we achieve a future where retirement is not marked by anxiety but rather is a celebration of thoughtful planning and fulfillment.

It’s time to shift our perspective and take inspired action to shape the future of financial security. It’s certainly my hope that 2025 will be remembered as the year we began constructing a new architecture — innovative, inclusive and resilient. By reinforcing the foundation we’ve had over the last century with holistic strategies, we build a network that empowers Americans to face the future with confidence. At this point, we can’t limit ourselves to maintaining the status quo. When we look forward with purpose, we create a future where financial security becomes a milestone of fulfillment, supported by the architecture we envisioned and built with care.

Maggie Seidel is the executive vice president of external affairs and chief of staff at Finseca. Contact her at maggie.seidel@innfeedback.com.

Reimagining investment strategies with alternatives

Alternative investments can diversify client portfolios and boost overall returns.

By Brandon Wellman

Traditional investment strategies, such as stocks and bonds, face increasing volatility and uncertainty in the market. Factors such as high inflation, rising interest rates and policy changes create instability and erode the reliability of these traditional avenues. Therefore, financial advisors are turning to alternative investments, such as private equity and hedge funds, to mitigate market unpredictability and enhance client portfolios.

Defining alternative investments

Alternative investments are assets that lie outside the realm of conventional stocks, bonds and cash. These include private equity, hedge funds, real estate, commodities and exotic options such as art or collectibles. Cryptocurrency stands as the largest and most prominent alternative asset class, drawing the attention of investors and institutions. However, mainstream adoption of crypto is being delayed by several challenges related to its practical utility, including regulatory uncertainty and high energy consumption.

The primary appeal of alternative investments lies in their ability to diversify client portfolios and boost overall returns. By incorporating assets with less correlation to traditional markets, advisors can better help clients weather economic storms. For example, during periods of high inflation, tangible assets such as commodities and real estate can serve as a hedge, preserving purchasing power when traditional investments may struggle.

An example of an alternative investment is real estate investment trusts, which offer attractive income potential by giving individuals a way to invest in real

estate without directly owning or managing properties. These companies own or finance real estate across retail, residential and health care sectors. They provide liquidity and diversification when publicly traded, making them an accessible and professionally managed alternative. Private equity is another option providing access to high-growth companies not available in public markets. Meanwhile, hedge funds, which can be bought and sold later at a higher price or sold to be bought later at a lower price, offer downside protection in volatile markets.

When to consider alternative investments

Not all clients are equally suited for alternative investments. Financial advisors typically recommend these strategies for high net worth individuals, accredited investors, and those with higher risk tolerance, and longer investment time horizons. The complexity and illiquidity of many alternative investments make them less suitable for clients who may need quick access to their funds or have a lower risk capacity.

Consider various factors when selecting alternative investments, including the client’s risk profile, investment goals and overall portfolio composition. As you are an advisor, due diligence is crucial, as many alternative investments lack the transparency and regulatory oversight of traditional assets and require the evaluation of underlying assets and have the potential for liquidity constraints.

Education is vital in helping clients navigate the world of alternative investments,

including clear communication, using analogies to explain complex concepts and being exposed gradually to options. For example, start with more familiar alternatives, such as REITs, before introducing more sophisticated strategies such as hedge funds and private equity. It is crucial to dispel common misconceptions, such as beliefs that all alternative investments are high risk or guarantee superior returns. Instead, clients should view alternatives as tools for diversification and potential return enhancement. As the investment landscape evolves, alternative investments are poised to play an increasingly important role in portfolio construction. These investments provide the ability to achieve a balanced financial plan based on a client’s situation such as providing diversification, mitigating risks and creating opportunities for nonlinear growth with the liquidity and simplicity traditional investments provide. By carefully considering client needs, conducting thorough evaluations and providing comprehensive client education, financial advisors can help clients harness the potential of these nontraditional opportunities to build more resilient portfolios.

Brandon Wellman, CFP, RICP, is a financial planner at Prudential Financial. He is a sixyear MDRT member with four Court of the Table qualifications. Contact him at brandon.wellman@innfeedback.com.

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M-8984 (1/2025) For financial professional use only – not for use with the public.