THE 2020 GIVING ISSUE
Special Section • P. 23 January 2020
Heart to Heart How giving helps agents and companies build stronger connections to their neighbors • PAGE 16
T he Giving
Is sue
ALSO...
ean People Suck, M So Turn Them Into Raving Fans PAGE 8
Strike Down The 4 Sources Of Annuity Reluctance PAGE 42
10 Reasons Financial Advisors Choose To Go Independent PAGE 50
-From-
G o t r o d w o th o G People
Community
Planet
Relationships
Prospects
Results
The surprising connection between purpose-driven business and sales success (page 24).
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The
World has changed. Will you? 62% A great product and great service aren’t enough.
Consumers want to buy from businesses with a greater purpose than just profits.
Think it doesn’t apply to insurance? Think again.
Learn how Assurity can help you translate good to growth at Assurity2020.com
* Accenture Global Consumer Research, December 2018 Assurity is a marketing name for the mutual holding company Assurity Group, Inc. and its subsidiaries. Those subsidiaries include but are not limited to: Assurity Life Insurance Company and Assurity Life Insurance Company of New York. Insurance products and services are offered by Assurity Life Insurance Company in all states except New York. In New York, insurance products and services are offered by Assurity Life Insurance Company of New York, Albany, NY. Product availability, features and rates may vary by state.
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JANUARY 2020 » VOLUME 13, NUMBER 01
FEATURE
16
ANNUITY
Heart To Heart: The Giving Issue
42 A im Annuity Messages At The 4 Sources Of Uncertainty
By Susan Rupe and Cassie Miller
The list of what motivates individuals and corporations to give is as long as the list of worthy causes that need help.
INFRONT
The industry’s most socially responsible organizations are doing great things for the causes they care about and the communities they support.
By John Hilton and Susan Rupe An annuity sales standard could be on the horizon in 2020.
By Cassie Miller Aprilyn Chavez Geissler overcame abuse and homelessness to achieve her dream. Now she helps other women rise out of similar situations.
LIFE
38 How A Life Policy Can Send A Grandchild To College
Mean people are everywhere, so how do you turn that meanness to your advantage? Marketing expert Michael Brenner tells Publisher Paul Feldman how to use empathy to give mean people what they desire most, and turn the whole situation into a win for everyone.
46 Tapping The Full Potential Of Association Benefit Plans
50 10 Reasons Financial Advisors Choose To Go Independent
32 The Phoenix Of Albuquerque
8 How To Turn Mean People Into Raving Fans
HEALTH/BENEFITS
ADVISORNEWS
IN THE FIELD
INTERVIEW
By Susan Rupe This is what’s at the root of why people want guaranteed retirement income but are reluctant to buy an annuity.
By Kevin Morgan The purchasing power of medium to large employers can be most closely replicated by associations and affinity groups.
23 Giving Issue Special Section
6 2020: Regulators See Clear Path On Rules
online
www.insurancenewsnetmagazine.com
By Jason Wellmann Some clients may choose to pass a legacy to beneficiaries through the life insurance death benefit. But others may want to pass on wealth to their loved ones while they are still living.
By Shad Besikof If you’re seeking to stay passionate about your work and dedicated to your clients and brand, making the choice to transition to independence should be an easy one.
INBALANCE
54 Don’t Be A Bear: How To Get Out Of Your Cave This Winter By Bryce Sanders It’s easy to become complacent about diet and exercise in the cold-weather months. Here’s how to start the new year on the right track.
BUSINESS
56 Digital Marketing: Use A Vendor Or Do The Work In-House? By Chris Hooper
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The Other Side Of The Table
M
y Uncle Pete had not said anything since I had arrived at his house, and my 12-year-old self had trouble processing it. Mom was talking to Aunt Mary as we sat around a small table while Pete sat quietly, looking out a window. He hadn’t even looked at me, which left me wondering if I had done something to offend him the last time I saw him. Even adults struggle to understand someone else’s silence. But I was a kid and this was my favorite uncle, the one who used to drive me around the vast estate where he served as caretaker in Greenwich, Conn. He even let me shift the Willys Jeep as he hit the clutch and laughed. Pete was always laughing and telling stories embroidered with his Irish brogue. During that last visit, my hurt deepened with confusion as Pete picked up a cup and struggled to get a sip. The cup shook, splashing tea over the side in what looked like an almost comical take on Parkinson’s disease. But this was real. I could see the shame and the terror in Pete’s eyes when he put the cup down and finally looked at me. Mom and Mary kept talking as if nothing odd happened. I didn’t even know what Parkinson’s was, so I am sure that I had “What the hell was that!?!” written all over my face.
It’s Not About You
It was only years later that I came to understand the depths of Uncle Pete’s anguish in the last time I saw him, even though his haunted look stayed with me. It took even longer for me to appreciate that the behavior of others is not about us. Quite often, it is not even about them. That is the thing to remember about “mean people.” In this month’s interview with Publisher Paul Feldman, content marketer Michael Brenner talks about how mean people suck the joy out of life and work. Not only is it unpleasant to work with mean people, but they also lead to wasted time and money. Mean people set up a feedback loop where reaction to their behavior amplifies the reaction to the reaction, and so on. 4
We can stop that loop by not reacting with anger. Yes, easy to say, but not so easy to practice. This all connects to empathy. Brenner says mean people are disconnected from empathy and the only way to counter them is with empathy — basically asking ourselves why they are the way they are. “Giving” is the theme in our main feature this month from Managing Editor Susan Rupe. In that article, readers learn what motivates individuals and companies to give to others. In many of those stories, empathy is the unmistakable motivator. In fact, one of the examples is a program where people live on the same amount of money that food stamp recipients get. A person quoted in the article saw that trying to maintain a food budget that low would risk his daughter’s life because her allergies require higher-priced options that would have to be compromised.
Learning To Understand
Empathy is when we endure a bout of debilitating back or foot pain and we finally understand why older people always seem cranky. It is the pain talking. But we have difficulty being generous with that understanding. We often assume the poor are destitute because of their decisions, that people are victims because they place themselves in peril. It is only when we are in those circumstances that we understand why people behave the way they do. George Loewenstein, a Carnegie Mellon University researcher, looked into the phenomenon in his study, “Hot–Cold Empathy Gaps and Medical Decision Making.” He found that people in a “cold” or calm state cannot fully appreciate how they would behave in a “hot” or emotionally heightened state.
InsuranceNewsNet Magazine » January 2020
“When one is not hungry, afraid or in pain, it is difficult to imagine what it would feel like to experience one of these states, or to fully appreciate the motivational power such states could have over one’s own behavior,” Loewenstein wrote. “Such cold-to-hot empathy gaps have diverse consequences for decision making, such as impeding efforts at self-control.” Given that, ask yourself: Are you you when you are angry, in excruciating pain or drunk? We often say that we were not ourselves in those cases. When people are mean, it is more about what is going on with them. If we react in anger, we are just continuing to spin that wheel. The short-term satisfaction of telling someone off does not pay off in the long term. Here is where generosity comes in. We can give the benefit of the doubt. We don’t know what others are going through. We can give them patience and not respond spontaneously. Once we find out what their circumstances are, we can make a change in that situation. In these days of deeper division, many of us act like we want the “other side” to just wither and die. But every system has a left, right and center. Even if one side is lobbed off, like say in the Russian Revolution, the side that remains splits into a new left, right and center. We have to live with our families, neighbors and co-workers. No matter where they are on whatever spectrum, we all have a shared experience. And we all depend on each other for our survival. We can start with understanding what is happening with someone we love sitting on the other side of the table. Steven A. Morelli Editor-in-Chief
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INFRONT
2020: Regulators See Clear Path On Rules By John Hilton
M
eeting in New York in August, Ohio insurance director Jillian Froment succinctly boiled down the difficulty in developing an annuity sales standard: “What best interest means to us as a working group does not mean that every state around the table will support that.” Nor will every trade association, industry executive or consumer representative be satisfied, she could have added. Yet the National Association of Insurance Commissioners plows ahead with revisions to the Suitability in Annuity Transactions model. 2020 promises to be an eventful year as the NAIC, as well as various states, advances tightened annuity sales standards. The fear that many agents and insurers have of a patchwork of differing standards from state to state seems likely to become a reality.
A Model Attempt
The NAIC Annuity Suitability Working Group tentatively adopted an annuity sales model on Nov. 5 that establishes a best-interest standard. Producers must meet obligations of care, disclosure, conflict of interest and documentation under the model. The effort has made significant strides since it started two years ago, and many trade associations flipped to support a best-interest standard during that time. But a few thorny issues remain. Regulators were continuing to meet after this issue went to press on these issues, which include: » In-force policies. New York has passed its own stiffened annuity sales rule, which applies to in-force policies. Working group members have resisted this stipulation, which is vehemently opposed by industry. 6
What’s Next
The working group passed the annuity sales model changes to its parent Life Insurance and Annuities (A) Committee. The A Committee was expected to adopt the rule after this issue went to press. The NAIC Executive Committee and Plenary will then vote to adopt the model before it can be sent to the states. Regulators say the model could be approved early in 2020 if all goes well. There is a legitimate question of whether that will be too late. Several states, ranging from New York to Massachusetts, are pushing forward with their own annuity sales rules. New York: Finalized its rules in 2018, and all annuities sales were covered as of Aug. 1, 2019. All life insurance sales are covered Feb. 1, 2020. New York’s language unambiguously states that only the
» The Harkin Amendment. The amendment was added by then-Sen. Tom Harkin of Iowa to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It grants states an exemption allowing them to regulate indexed annuities as insurance products as long as they adopt the NAIC annuity regulation Model 275. The new annuity sales model includes a drafting note indicating that it will replace the existing regulation where it is mentioned in Dodd-Frank. If the NAIC replaces Model 275, states that don’t adopt the new regulation SEC On Track To Implement might lose the ability to Reg BI In June regulate indexed annuThe Securities and Exchange Commission worked ities. steadily through 2019 to advance its package of NAIC attorneys conrules known as Regulation Best Interest, set to take firmed the Dodd-Frank effect June 30. language is a real issue Adopted in June 2019, Reg BI includes these that must be addressed. main requirements: Disclosure obligation: Broker-dealers must » Best-interest oblidisclose material facts about the relationship and gation. Although this recommendations of the products and services definition is settled, they provide. the language is pleasCare obligation: A broker-dealer must exing neither side. The ercise reasonable diligence, care and skill when Independent Insurance making a recommendation to a retail customer. Agents and Brokers of The broker-dealer must understand potential America wants to strike risks, rewards and costs associated with the rec“act in the best interest ommendation. of the consumer” from Conflict-of-interest obligation: The the definition. broker-dealer must establish, maintain and enforce Meanwhile, the written policies and procedures reasonably deCenter for Economic signed to identify and — at a minimum — disclose Justice wants to tighten or eliminate conflicts of interest. the best-interest definiThe SEC rules were reportedly designed to hartion to this sentence: “A monize with the impending Department of Labor best interest standard retooled fiduciary rule. The Trump administration should be defined as a has indicated it wants a rule that gives the industry recommendation for the leeway to do business with retirement account a product or products dollars. A similar best-interest standard is expectthat best meet the coned when those rules are made public. sumer’s needs without As this issue went to press, DOL officials were consideration of the provowing to release the retooled fiduciary rule by the ducer’s interest.” end of 2019. •
InsuranceNewsNet Magazine » January 2020
INFRONT interests of the consumer can be considered in a sale, and in-force policies are covered by the rules. Massachusetts: The state filed a proposed rule last month that would impose a fiduciary conduct standard for broker-dealers, agents, investment advisers
and investment adviser representatives providing financial advice to clients in the state. Other states have toyed with other ideas with various degrees of success. New York remains the lone state to establish a comprehensive annuity sales rule.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton@innfeedback. com. Follow him on Twitter @INNJohnH.
Could 2020 Bring A Break On Drug Prices? By Susan Rupe
A
mericans could be getting closer to a break on prescription drug prices as the House of Representatives was expected to vote on a drug pricing bill backed by Speaker Nancy Pelosi, D-Calif. The bill would allow the secretary of health and human services to negotiate lower prices for up to 250 drugs per year, with the lower prices applied to people with private insurance and to people with Medicare. The Congressional Budget Office in October released a preliminary analysis of the first section of the bill, which allows for negotiation, finding the measure would save Medicare $345 billion. President Donald Trump opposes the bill. Although he has pledged to bring down drug prices, his plan for doing so includes making it easier for Americans to import drugs from Canada. Meanwhile, in the Senate, Majority Leader Mitch McConnell, R-Ky., and Sen. Chuck Grassley, R-Iowa, are increasingly at odds over a Trump-backed bipartisan measure to lower drug prices. McConnell opposes the bill while Grassley is trying to increase pressure on McConnell to support it. Many Republican senators object to a key provision in the bill that would require drug companies to pay money back to Medicare if their prices rise faster than
the rate of inflation. They argue that constitutes a “price control” that violates traditional GOP free-market thinking. Another key component of the bill, one that’s less controversial, would cap seniors’ out-of-pocket costs for Medicare drugs. With 2020 being an election year, leaders on both sides want to see action taken on a prescription drug bill before members of Congress become preoccupied with campaigning.
against the issue, worried about cuts to their payments.
‘Medicare for All’ Still Under Discussion
Whether private health insurance fades away in favor of a Medicare for All plan will depend on what the voters do in the November 2020 presidential election. Any congressional action to put a government-run health care plan in
Any congressional action to put a governmentrun health care plan in place won’t happen as long as Trump is president... An End To Surprise Bills?
One of the few healthcare issues on which Democrats and Republicans agree is the issue of surprise billing. House and Senate leaders have been trying to reach a deal on legislation to protect consumers from surprise medical bills. Trump also wants to see action on the issue. The legislation would protect patients from getting hit with massive bills when they go to the emergency room and one of the doctors caring for them happens to be outside their insurance network. Backers of the deal hoped to include it in a government funding deal that faced a Dec. 20 deadline. But as of press time, Congressional leadership had not yet signed on to the deal. Doctors and hospitals lobbied hard
place won’t happen as long as Trump is president, as he has pledged to veto any such legislation that would come across his desk. As the Democratic presidential campaign winds along, expect Medicare for All to continue to be promoted by some candidates, while others favor a hybrid approach or a Medicare buy-in option. Susan Rupe is managing editor for I n su ra n ce N ews N et . She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@ innfeedback.com. Follow her on Twitter @INNsusan.
January 2020 » InsuranceNewsNet Magazine
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ichael Marketing expert M mean rn tu to w o h s ll te r e n n Bre ts and n e li c y p p a h to in le p o e p co-workers er Paul Feldman An Interview with Publish
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InsuranceNewsNet Magazine Âť January 2020
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id you ever have one of those days when nothing seems to go right, from failing to connect with good prospects all the way to getting through the supermarket without wanting to bash someone with a frozen product? Welcome to the “everything sucks” era. You are not the only one feeling that way, and Michael Brenner has an answer to why that might be happening — a lack of empathy. That is why customer service is more exasperating than helpful. People who are supposed to help are not looking at what you need, only at what will move you on down the line. It is also why marketing sucks. The more disconnected we get from our prospects, the less human they seem. Facebook advertising can seem like an appeal to faceless mobs. Facing your next prospect is an exercise in overcoming their resistance to spending a moment away from a screen. It starts with you, Brenner says. Are you making the connection that matters? Are you showing that you are worth talking to? In his book Mean People Suck: How Empathy Leads To Bigger Profits And A Better Life, Brenner surveys the universe of suckitude and finds karma — what goes around, comes around. This is not a namby-pamby, new-agey thing, but the hard facts of how one person connects to another. It is the essence of sales and service. Brenner is a marketer who knows how to create engaging content and give it legs on social media. He does not do it with a “one weird trick” method but with actual thoughtfulness. It’s the tough stuff of understanding why you are doing what you are doing and what you want to do. As CEO of the Marketing Insider Group, Brenner has worked with more than 75 brands to improve their content marketing and to engage their own employees. Brenner earned his
HOW TO TURN MEAN PEOPLE INTO RAVING FANS INTERVIEW knowledge as the leader of marketing for the business software company SAP. He talked about empathy in marketing with InsuranceNewsNet Publisher Paul Feldman. FELDMAN: You went into this idea of “Why does your marketing suck?” and you ended up focusing on empathy. How did you connect the two? BRENNER: It’s more than just marketing. It’s like everybody’s working, but nothing is working. Everybody’s busy, but what are they working on? So, that’s where I started: It’s worse than the 80/20 Pareto principle. The principle’s classic advice is spend 80% of your time on the 20% of things that work, or 20% of the things that deliver 80% of the results, however you want to look at it. But we found in both external research and the case studies that I shared that it was really the one in 75 who was almost fanatically focused on delivering value for others. It is not in what most people do, which is looking at doing either what they think they’re supposed to do or — in a large company — what their manager told them to do. It’s this organizational blindness that turns people into lemmings that simply show up and do the easiest thing that’s on their desk. “We’re going to do this, because somebody told me to.” The folks who break through the mold are those in a customer-facing role, or even in back-office positions, who have empathy for customers. The successful HR person is the one who’s really trying to help make the workplace a better one, or the best accountants are the ones who are trying to make their fellow accountants’ work lives easier. Whatever the role is, it generally came down to feeling and service to others. FELDMAN: How have you seen “empathy” work with marketing?
BRENNER: When I started at SAP, they were working with Business Insider on a sponsored content promotion. Our team at SAP thought that the only way it would “work” was if the content was selling SAP. So the content was terrible. It had a 99% bounce rate, zero time engaged, no one clicked on it. It was “How SAP can …” even though it was sponsored content. After I took over, we ended up creating content that was much more engaging. And at the top of every article was a notice that this piece of content was sponsored by SAP. So it was delivering on at least the brand impressions that the advertising team wanted to see. Something I learned at SAP is what I call the pushback. It’s when someone is in a position where they feel like they are doing work that isn’t making an impact. It’s a way for any person at any level to navigate through that. This is true of any client’s relationship or employer-employee relationship, where you feel like it’s going off the rails. And it’s kind of a little bit of a reset, but it’s pretty simple. It’s a three-step question series. The first question is why does this matter? I think what happened in the situation with SAP and Business Insider is they jumped past the why, straight to the what. What are we going to do? The SAP team said, “I think you should do this,” and the editorial team at Business Insider said, “I don’t think so. But you’re the client, so I’m going to do it anyway.” So, they skipped the why. The second question is, what’s the impact? What is the thing that we want to change in order to do this? And then the third question is, how are we going to measure it? If you don’t have a good answer for all three, then you probably are in a bad spot. If you can’t answer the “why,” the “what,” and the “how are we going to measure the impact,” then you probably shouldn’t be working on it. FELDMAN: How does empathy work in the workplace? BRENNER: One of the core reasons I wrote Mean People Suck was that I realized I was unhappy in a lot of the roles that I had because I worked for managers I didn’t like, who sucked. They were mean people. And yet what I found out
January 2020 » InsuranceNewsNet Magazine
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INTERVIEW HOW TO TURN MEAN PEOPLE INTO RAVING FANS
WHAT YOU NEED TO KNOW hen you treat others with empathy, they will treat you with W empathy in return. This has a positive impact on everyone around you and can also help you make strong connections. Who will have your back when things get tough? Don't forget the golden rule: treat others the way you want to be treated. Find the balance between what you know, what you love, what the world needs and what has real value. Focus and nurture your empathy for others every day. — Mean People Suck: How empathy leads to bigger profits and a better life, Michael Brenner, 2019
FELDMAN: When a client is adamant about something, how do you work around that without alienating them or sounding like a jerk? BRENNER: That’s a classic education gap. And I think we’re all weary of the salesperson who likes to ask those challenging questions like, “Well, do you really understand what an annuity is?” Instead of saying that, I think a better way is to say, “I wrote an article about the pros and cons of annuities, and a deep description to help people have a better understanding of what that tool can really do for you.” It’s funny, I find myself saying to people all the time, “I actually wrote an article about that. And I’ll send you the link.” Because articles are, if nothing else, just answers to questions. And those questions should be the questions that are being asked by your customers, your prospects. That would be how I would answer that. It’s the whole, “What is it? Why is it? Why is it a good thing? How could someone like them use it?” Basically, all I do in my editorial strategy for clients is to walk through the what, the why, the how, the when and the where. And we do that on every category of product in different ways. So this is my challenge to your audience: Every agent should have answered those questions publicly on their website. To me, that’s more important than the price of an annuity or life insurance policy. That’s my challenge to every business in general: Are you answering the questions that you know your customers are
about most of them is that they’re actual- the cake. But you can’t tell me you want a ly good people with good intentions, and cake and also tell me how to bake it. You they have families and kids and feelings can’t tell me I need this much flour and like everybody else. this many eggs and whatever the ingrediSo the pushback is actually a great ex- ents are. So if you want a beautiful cake, if ample of empathy because if you are in a you want it to be chocolate and you want situation where you don’t have the power it to taste good, I’ll give you a delicious — an employee to an employer, or with chocolate cake. But I’m not going to put a client — it allows you to help them get bananas in it just because you think bawhat they want. nanas would be good.” If you don’t like your boss or client, The analogy worked with him, and he maybe it’s because you haven’t really tried was a really difficult guy to work with. to figure out what they want. They may He’s somebody I’m not going to be friends be telling you what to do because they’re with, but it was a perfect example of how trying to get what they want. But you we had to go through that but came out were hired as a smart person with good on the other side both seeing each other intentions to do the right thing and get as a little bit more human. them what they want. So it’s really a miscommunication in most relationships when that situation arises. The pushback is the definition of trying to be empathetic We all feel pressure to get results. by helping your manager or your client actually get what We're all being asked to do things that don't deliver on those results. they want, but not dictate how to get it. We need to be mindful of the Illusion Point and avoid the Great Idea In the book, I used the exCycle of Death. ample of a breakthrough I had with a very difficult manager. We need to explain how all our wasted effort is in no one's best interest. I went through the pushback We have to push back on the requests that we know won't work. without consciously thinking about it. — Mean People Suck: How empathy leads to bigger profits and a better life, Michael I came up with this analogy. Brenner, 2019 I said, “I understand you want a cake. And I want to give you
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INTERVIEW HOW TO TURN MEAN PEOPLE INTO RAVING FANS
WHAT YOU NEED TO KNOW Empathy evolved in humans because it increased our chances of survival. Stories based on empathy have the power to move people to action. Businesses that employ empathy can achieve higher profits and bigger growth. It may seem counterintuitive, but when we put others ahead of ourselves, we can actually achieve more success. — Mean People Suck: How empathy leads to bigger profits and a better life, Michael Brenner, 2019
asking? Because if you don’t, your competition will. FELDMAN: Let’s fast-forward to postsale. How do you maintain that empathetic relationship? BRENNER: I talk about this in the book, and it’s a little bit overused in the marketing world, but the cost to keep a customer is 20% of the cost of getting a new one. It’s four times cheaper to keep existing customers than to try to find a new one. So it makes absolute sense. Well, the challenge of that is, what company spends four times more of its energy making current customers happy? So the data is there to support that as an investment in time or money. But then it’s very simple to do. We all know what good customer service looks like. I’ve tried to do some things that are more surprising than what a typical agency might do. I send out my favorite books every summer to my clients and say, “Here are my favorite books. I have a reading list for you.” It’s three or four books, so I just ship them out from Amazon. As an example, when I onboard clients, I send them a box of chocolates that look like honeybees, and I say, “Here’s to creating buzzworthy content.” So, I do little things like that. I write thank-you notes. These are things I would do in a personal relationship. I’ve never met an insurance agent who does any of those things. You probably have some. I’m sure they’re out there. FELDMAN: Some do the personal touch better than others, especially around holidays. 12
BRENNER: But I think it’s more than Christmas. My parents’ insurance agent was a high school friend. They knew each other growing up. So we got Christmas cards from him and things like that. But I’m talking more about doing that with people you didn’t grow up with, but acting toward them as if you did. I think that’s kind of the trick there. FELDMAN: Some of that comes from a company culture where empathy is valued. Many companies and small businesses talk about creating culture. But what goes into a successful culture versus an unsuccessful culture? What makes the difference? BRENNER: I’m not an expert in culture, even though my book is about culture. I think culture is kind of like obscenity. It’s one of the things you know when you see it, but it’s not always easy to define. To me, culture is the values that are demonstrated based on the types of people who are hired, fired and promoted. Steve Lucas, who is the former CEO at Marketo and sold it for a triple increase in valuation, gave me a quote for the book that said, “The time of the brilliant jerk is over.” Google is accepting that they have a culture problem. And the reason they determined they have a cultural problem is because of what they called “destructive geniuses.” It’s these people who might be super smart, and maybe even have done something very impactful, but they treat people like crap. That creates a toxic culture that does not drive performance outside of that individual genius. Companies
InsuranceNewsNet Magazine » January 2020
used to try to hire and promote people like that, thinking that would help to create a culture where everybody becomes the smart jerk. And I think those days are over because nobody wants to work with those people. So that’s really what it comes down to: What are the values that you purport or you defend based on the qualities of the people you’re hiring, firing and promoting? FELDMAN: You had a chapter on Steve Jobs in your first book, and he was able to be a world-class jerk and be very successful. People still look to him as a model for many things, and perhaps he is the brilliant jerk archetype. So why is it that he was able to create Apple and be successful? BRENNER: I’m not a psychologist, but Steve Jobs is a dichotomy in so many ways. I actually use a couple of quotes from Steve that I love. One is that, “Those that are courageous enough to think that they can change the world are the ones that do.” And I like to point to how Steve did that not just with Apple, but also with Pixar. People forget that he was also sort of the brilliant driver behind Pixar. The second quote that I love from him was exactly the culture he created at Pixar. And that was, “We don’t hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” And that’s what Pixar did. If you read Ed Catmull’s Creativity, Inc., he talks about how Pixar created a culture of innovation built on this sort of almost democratic process that they use in every single Pixar movie. Now, with Apple, Steve was the opposite. He was a tyrant. He yelled at people and he was, like you said, famously nonempathetic. But how could one guy do those two different things? How could he create a company ruled with his iron fist on one hand, and then create an almost equally successful company that was completely democratically power to the people? I don’t know. I can’t answer that. But if nothing else, he created an impact on the world. And so I think we’ll be trying to figure him out for a long time.
NEXT MONTH: Michael Brenner shows how empathy can power your advertising and digital marketing.
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NEWSWIRES
QUOTABLE
Most Americans Are Struggling Financially Americans are ringing in the new year but not
finding much to cheer about on the financial front. Seven in 10 say they struggle with some aspect of financial stability, such as paying bills or saving money, according to an annual study by the Financial Health Network. Even though we wrapped up a year of solid economic growth, the percentage of people who say they are struggling remained unchanged from 2018, the study reported. Even those considered to be middle class are feeling pinched. Almost 20% of people earning between $30,000 and $100,000 said they spent more than they earned — an increase of more than 4 percentage points from 2018. These findings are the latest in a series that show a large percentage of Americans are experiencing financial difficulty more than a decade after the Great Recession slid into the history books. The Urban Institute found that four in 10 Americans have trouble paying for basic needs such as groceries or housing. Zillow found that one-quarter of renters say they are finding it difficult to afford their monthly payments.
DID YOU
KNOW
?
14
— Jamie Dimon, JPMorgan Chase chairman and CEO
precedes a recession since it signals that investors see more risk in the short run than the long run. Historically, it portends lower growth and inflation ahead.
HYBRID OR ‘MEDICARE FOR ALL’?
FED WARNS OF ‘ECONOMIC RUIN’
What happens when governments print money to pay off debt? A disaster, Federal Reserve analysts warned. St. Louis Fed economists warned of potential “economic ruin” if policies that advocate money-printing to pay off government debts are ever adopted. Modern monetary theory maintains that government debt doesn’t matter if inflation is low, and that deficit spending can be used to fuel growth and reduce inequality. Supporters of this theory argue that a country that runs up debt in its own currency can never default, and as long as inflation remains tame, there really are no problems with government deficit spending. The Fed economists see it differently, though. They note that high debt levels are not necessarily unsustainable so long as income is rising at a faster pace. They also pointed out that countries that have gotten into trouble and looked to central banks to bail them out have fared poorly (think Venezuela).
This is the most prosperous economy the world has ever seen and it’s going to be a very prosperous economy for the next 100 years.
IS A RECESSION LOOMING?
Wall Street and Main Street are trying to read the tea leaves and determine whether a recession is headed our way. Peaks and valleys are only natural in an economy, but many economists are looking for signs of a downturn. A recent Kiplinger’s article listed four possible signs of a recession. They are: 1. Fear. Numerous economists say the current unstable environment is treacherous for national and global business. 2. Falling consumer confidence. American consumers are worried, which may lead to a drop in spending. 3. A worsening trade war. The continuing U.S./China trade war is stoking uncertainty. 4. The yield curve. Fear and uncertainty were driving factors of the August inversion of the U.S. two-year and 10-year notes. An inverted yield curve often
Baby boomers hold 60% of the total wealth in the U.S.
InsuranceNewsNet Magazine » January 2020
Source: Federal Reserve
When it comes to health care, what do Americans really want? InsuranceQuotes. com conducted a survey and found 62% of Americans “most strongly support” a U.S. health care system that includes both public and private insurance, while 25% favor a Medicare for All system that ends private insurance and 9% favor a system that includes only private insurance. In addition, 58% said that undocumented immigrants should have health insurance access, while 39% said they should not.
Hybrid System Wins The Day
62% support public/private mix 25% favor ‘Medicare for All’ 9% want private health insurance only SOURCE: InsuranceQuotes.com
The study also found that 50% of Americans say the health care system has stayed about the same in quality since President Donald Trump took office, while 28% say it’s worse and 18% say it’s better. Americans are evenly divided on the future of Medicare, with 43% saying that it’s at risk of going bankrupt in the future, while another 43% say it’s not. More than one-third of respondents said they are unaware that the Affordable Care Act is still in effect.
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COVER STORY
Heart to Heart
How giving helps agents and companies build stronger connections to their neighbors By Susan Rupe and Cassie Miller
M
att and Yi were in a good place. They had recently transitioned to a more stable financial situation and had begun to accumulate some wealth. They had even purchased their first home together. And then they received devastating news. In December 2018, 41-year-old Matt was diagnosed with stage 4 colon cancer. It was something the couple never saw coming. “At the time, we were like, ‘OK, finally we can start to enjoy our life and plan for the future,’” Yi said. After the cancer diagnosis, she said, everything became more difficult. 16
InsuranceNewsNet Magazine » January 2020
Yi began to worry about the couple’s finances and how to navigate them, knowing that she would likely need to take time off work to care for Matt while also figuring out how to afford his treatments. Yi and Matt (who did not want their last names used) both knew that cancer could be financially devastating for them. The couple’s worries about the financial impact of Matt’s diagnosis were justified. One in three families reports depleting their savings as a result of a cancer diagnosis. Twenty-four percent of families said they had to borrow against their retirement funds as a family member was treated for cancer, according to the Foundation for Financial Planning. In addition, some cancer patients even see poorer health outcomes as a result of their financial stress. Seeking resources that would help them, Yi found the Financial Planning for Cancer program, a collaborative effort between the Foundation for Financial Planning and the nonprofit organization Family Reach. Not long after finding the program, Yi and Matt were soon connected with Craig Cohn, a financial planner in San Diego. Cohn knew that Matt’s diagnosis would change the couple’s financial picture. Cohn worked to realign the couple’s investments to free up funds for shortterm use. He also adjusted their 401(k) investments, while avoiding penalties, to bring down the risk factor and ultimately make adjustments for what was going on in their life. “I just really wanted to take some of the pressure off them immediately,” Cohn said. “How do we handle things in the short term so, when we get to the long term, it will be fine?” Cohn discussed expenses and income. He also conducted an insurance review and created a budget for the couple. Through his financial advice, Cohn was able to relieve the couple’s financial stress, allowing them to focus on Matt’s treatment. “It was incredibly helpful and really provided a peace of mind for our family going forward,” Yi said. “From the very beginning, I felt very safe, and I felt there was a trust there. I’m very grateful to be connected to Financial Planning for Cancer, and ultimately, to Craig. When we make it through this difficult time, we’ll have plenty of time to invest for the future.”
HEART TO HEART COVER STORY Cohn’s work and the program were able to provide some peace of mind for Matt as he went through his cancer treatments. Matt said, “For me, it’s a huge peace of mind because my big concern is that Yi is taken care of if I’m not here.” Cohn urges other advisors to get involved in similar pro bono initiatives. “You have a skill set that can be used by people in the worst of times,” he said. Of his work with Yi and Matt, Cohn said, “Working with a family going through cancer or another difficult situation is always challenging, but always very rewarding. It’s when clients need us the most.”
GIVING: IT’S A BALANCE
Cohn’s work with Matt and Yi is only one example of the many ways people in the financial services industry give back to others. Sometimes that giving takes the form of one-on-one help, and sometimes giving is in the form of a multimillion-dollar corporate contribution. All individual giving is actually a balance, according to Jenna MulhallBrereton, chief philanthropic services officer of the National Philanthropic Trust. “I think you make decisions about giving with your head and with your heart,” she said. “Because every individual is different, every giving experience is different. People are going to weigh different factors differently in deciding whether to give.” One of the major motivators in giving, Mulhall-Brereton said, is having a cause that people feel personally connected to. “If a family member has battled a disease, it might feel meaningful to give to an organization that invests in research for that disease or helps others who are living with it. It’s something that feels tangible and important.”
Why Do People Give?
* A personal connection to the cause. * Gratitude inspires a desire to pay it forward. * A desire to create social change.
The concept of “paying it forward” also can motivate the giver, she said. “For example, someone might feel grateful for the experiences that opened up to them because of the school they attended.
Jenna Mulhall-Brereton
They might feel grateful to a hospital for the treatment that they or a family member received. So it can be motivating to think that giving a gift to an organization that has benefited you can allow others to have that same experience.” Another motivating factor in giving is when someone can actually see a need for help, she said. “When we see something tragic on the news, such as forest fires in California, when you see that level of
A still from Nationwide's Denial, Ohio, campaign.
tragedy, it can kind of restore hope for people to feel like there’s something that they can do. This is why we see a lot of giving for disaster response, for example, because people see the devastation on the news, and they’re motivated to do something to help alleviate that suffering.” Knowing that someone in your own backyard is going through a difficult time also is a motivation to give. “This is giving where we see the need and sense the emotional suffering someone is going through, and where you can see the joy that you can engender by helping,” she said. When it comes to corporate giving, Mulhall-Brereton said, donors look at two factors: where their dollars can do the most good, and how their giving can create change. “They want to know that their giving is going to make a difference,” she said of corporate philanthropy. “People look for organizations that have a track record of success and can show they’re making an impact. It’s not only about choosing causes, it’s also about choosing to give to organizations that can move the needle on those causes.”
IT TAKES A VILLAGE
In Nationwide’s case, the company hoped to move the needle on one of the critical problems facing America today. But it took an unusual route to address the opioid crisis, right through a fictional village. Denial, Ohio, looks like the town where most of us dream of living. It’s the kind of place where children ride their bicycles along tree-lined streets. Parents cheer on the sidelines at sporting events, and neighbors gather for backyard barbecues. But because nobody in Denial believes that their children experiment with prescription opioids, “My child would never
January 2020 » InsuranceNewsNet Magazine
17
COVER STORY HEART TO HEART do that” is practically the town motto. And so everyone continues to live in blissful ignorance. Nationwide joined forces with a nonprofit group and a number of other partners to get people to stop living in Denial. Nationwide provided $4 million through its foundation to the 85-member Ohio Opioid Education Alliance. The carrier best known for its “Nationwide is on your side” jingle had its ad agency create a TV public service announcement depicting the fictional town of Denial. The campaign is aimed at encouraging parents to talk to their children about the dangers of prescription opioids and at getting people to dispose of their unused prescription painkillers responsibly. The video campaign first appeared on TV in 2018. The TV spots have been broadcast on stations throughout Ohio, the state where Nationwide has its corporate headquarters, and the videos have been shown during major sporting events in the state. The video also is part of a paid social media campaign. Opioid addiction has hit the state of Ohio hard, and even Nationwide’s employees haven’t been immune from the scourge, said Chad Jester, Nationwide Foundation president. “About eight years ago, we started seeing some changes in our employee benefit spending,” Jester said. “Our colleague who runs that area delved into it and found some of it was tied to opioid addiction, that employees and their dependents were getting treatment.” The company responded by bringing in speakers to talk to employees about the issues surrounding opioid abuse and addiction, Jester said. The sessions were simulcast to Nationwide’s employees around the U.S. In addition, employees whose families were affected by opioid abuse conducted panel discussions to share their experiences. Jester said the opioid crisis even affected his own family. Eventually, Nationwide Foundation officials approached the Ohio Opioid Education Alliance and volunteered to create a public service announcement campaign. The campaign goes beyond raising awareness of the opioid crisis, Jester said, because people already are aware of the damage opioids are doing to their communities. Instead, the campaign urges people to take action. 18
Along with the video campaign, Nationwide officials distributed prescription drug disposal bags throughout Ohio. Audience research showed the video campaign is reaching consumers, said Jimmy Lump, spokesperson for the alliance. Statewide polling revealed that 57% of those who saw the TV spots said they are talking to their children as a result of seeing the videos, and 54% said the TV spots made them more cautious about how they dispose of their unused prescriptions.
HELPING A CLIENT HEAL
Seeing someone in pain can be a powerful motivator to give, said Mulhall-Brereton of the National Philanthropic Trust. Agents assist clients when they experience the worst times of their lives, and that can be the inspiration for giving. Christmas morning 2017 should have been a happy time as Miles McLane and his family spent their first holiday season on their newly acquired farm outside Berger, Mo. But they woke up to terror as a fire destroyed their barn and a number of their livestock. McLane tried to rescue as many animals as he could, but some of them followed their instincts and ran back into the flaming barn. Exactly one year later, the scene of that devastating fire became a scene of surprise and joy, thanks to an agent who was touched by the McLane family’s tragedy. Meaghan Dowd is an agent with Powers Insurance and Risk Management, a multiline agency in St. Louis. She helped the McLane family file the insurance claim to rebuild their barn. But she wanted to do something more. McLane is an Army veteran who served in the Middle East. Buying his farm and moving his family to the country was his longtime dream. Even though he was able to build a new barn on his property and acquire some additional livestock to replace what was lost in the fire, something was missing. Dowd wanted to give McLane something to help him heal from his loss and trauma. She worked with McLane’s wife, Katrina, to make it happen. On Christmas morning 2018, the anniversary of the fire, Dowd showed up at the McLane farm decked out in a Christmas elf costume and leading Rebel, a rescue horse, to his new home. Dowd and Katrina spent nearly a year finding a
InsuranceNewsNet Magazine » January 2020
Please keep in mind that the primary reason to purchase a life insurance product is the death benefit. Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods. Policyholders could lose money in this product. 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 affiliates, have a financial interest in the sale of their products. Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. Securian Financial is the marketing name for Securian Financial Group, Inc., and its affiliates. Minnesota Life Insurance Company and Securian Life Insurance Company are affiliates 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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COVER STORY HEART TO HEART
Army veteran Miles McLane receiving a surprise horse a year after a tragic fire that killed some of his livestock.
suitable horse for McLane before locating 15-year-old Rebel. Dowd also provided a saddle and all the other riding gear. McLane’s disbelief in his equine gift quickly turned to joy as he told Dowd how he had wanted his own horse since he was a boy. After 10 years in the insurance world, Dowd said she had handled many types of claims. But something about the McLane fire affected her and her coworkers, inspiring them to do something to help. “We knew this was his first Christmas at the farm and his first Christmas as a civilian after serving in the military,” she said. “We were trying to figure out what we could do to give back to him. At first, we were thinking we could donate a goat or a pig to replace some of the livestock he lost. But then his wife told us he always wanted a horse. So we made that our mission; we were going to deliver something on Christmas morning that could hopefully change his family’s memory of that morning and make it a very special memorable one.” Dowd said she hoped the horse would provide another gift to McLane and his family — the gift of hope. “We wanted them to know there are people out there who care about them and want to take care of them when they need it. They have a whole community behind them.”
use their foundations as a means to give to causes they want to support, but when the individual employees get involved, giving takes on an entirely new dimension. Ken Weliczka was standing at his grocery store’s deli counter when he realized the challenge so many of his fellow citizens face. Weliczka is responsible for corporate bond investments at National Life Group, based in Montpelier, Vt. When his company invited its employees to take the 3Squares Challenge, Weliczka stepped up.
A NEW DIMENSION
Giving also can be a learning experience, Mulhall-Brereton said, especially when the giving involves more than simply writing a check. Insurance companies 20
InsuranceNewsNet Magazine » January 2020
The 3Squares Challenge is part of National Life’s efforts to help eradicate childhood hunger in Vermont. Participants are asked to spend a week eating only food purchased with the amount of money that 3Squares, Vermont’s food-assistance program, provides to its low-income recipients. For Weliczka, that meant he had $5.22 per day to buy food for himself. So the first step in the challenge was to plan what he could afford to eat and where he could buy it. “In a rural state like Vermont, that could be a problem,” Weliczka said. “But I live in a town with a Walmart and two big grocery stores within a half-mile of each other. So it was a matter of looking at the ads for the week and seeing what was on sale, and then bargain shopping and seeing where I could save 10 cents here or 25 cents there. All that adds up when you have less than $37 to buy food for the week, so I had to spend a lot of time planning what I could potentially afford and then putting the plan into action.” So what did he eat that week? He soon found out that a 3Squares budget didn’t leave room for variety. “It was oatmeal for breakfast every day,” he said. “It was peanut butter and jelly sandwiches for lunch or dinner most days.
Highlights About Charitable Giving by Source ↑ Giving by foundations had a record-breaking year in 2018,
reaching its highest-ever dollar amount even when adjusted for inflation, and growing to its largest share (18%) of total giving to date.
↓ Giving by individuals decreased as a percentage of total giving in 2018 to 68% (down from 70% in 2017).
↓ Giving by individuals totaled an estimated $292.09 billion in 2018, declining 1.1% from the previous year.
↑ Giving by foundations increased by an estimated 7.3%, to
$75.86 billion in 2018 (an increase of 4.7%, adjusted for inflation).
↑ Giving by corporations is estimated to have increased by 5.4% in 2018, totaling $20.05 billion.
HEART TO HEART COVER STORY
Weliczka
I was able to buy some turkey and cheese, so there was a little bit of protein that I had to stretch over the week. I bought a container of pasta and a container of sauce that I was able to stretch for dinner over three nights. And then I bought apples, bananas and some cups of yogurt. It was when Weliczka bought the turkey at the deli counter that he faced the reality of having so little money to buy food. He had budgeted enough for exactly a halfpound of the sandwich meat — and not a slice more. When the deli clerk sliced the turkey, it weighed in at about three-quarters of a pound. Weliczka asked her to remove the excess turkey but it still weighed 0.57 pound, so he asked her to remove one additional slice to get to the magic half-pound mark. The clerk seemed exasperated over the request and the customers in line behind him were becoming impatient. At that point, Weliczka said he realized what it must be like for 3Square recipients to deal with an unexpected expense in the grocery store checkout or having to watch classmates or friends eat lunch. Although Weliczka took on the challenge for only himself and not for the rest of his family, he acknowledged that eating on a 3Squares budget would be a huge challenge for his wife and children. “One of the things that really hit home for me is that one of my daughters has severe food allergies,” Weliczka said. “We buy
her a lot of organic products and a lot of products that are free from nuts, dairy and gluten. Those things often cost up to five times more than the store-brand products I was buying as part of the challenge.” He could see how balancing a meager food budget could risk a child’s life. Although Weliczka’s family already had been regular donors to their church’s food bank, he said his experience with the 3Squares Challenge inspired them to be more thoughtful about the types of food they donate, making sure they give the kind of food that recipients want and need. Beth Rusnock is president of the National Life Group Foundation. She said the issue of childhood hunger hits close to home for some of the insurers’ employees, who shared videos with their fellow workers about their own experiences with food insecurity while they were growing up. National Life adopted the cause of eliminating childhood hunger in late 2018, commissioning research on the issue from the Urban Institute. The findings of that research became a springboard to help develop strategies and tactics to end childhood hunger in Vermont. Rusnock said researchers estimate the number of food-insecure children in Vermont ranges anywhere from 19,000 to 35,000. The National Life Group Foundation has teamed with several statewide organizations aimed at ending childhood hunger, Rusnock said. In addition, the company created an Employee Action Team, which is working in a grassroots
manner to tackle the issue. The company also formed a Childhood Hunger Steering Committee that includes thought leaders from throughout Vermont who can help pull together the resources needed to make a difference. One thing that the foundation plans to do in the future is to establish a network of structures similar to “little libraries” where people donate books for others to take. These structures will be placed throughout Montpelier but instead of books, they will contain food and other necessities that those in need can take. Eliminating hunger fits in with National Life’s mission of protecting families, Rusnock said. “We recognize that if families are struggling financially, often the first thing to go when they look at paying for rent and heat and transportation and child care is food. The ripple effect of that is much greater than many of us realize. Often parents will go without so their children can eat. But when children don’t have access to food, when they go to school, they’re hungry and they can’t concentrate and they can’t learn. “There are lifelong effects of childhood hunger, emotionally and physically. If we’re looking to shore up our future, this is where it starts.”
TWO HOURS CAN BE LIFESAVING
You don’t have to invest a lot of time to be an effective giver, Mulhall-Brereton said. Something that takes only a couple of hours can have a lifesaving effect.
January 2020 » InsuranceNewsNet Magazine
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COVER STORY HEART TO HEART Estate Planning Partners in was visiting him in the hospital when I Newark, Del., and has donated heard someone at the nurse’s station on platelets 75 times. A donor can the phone with the blood bank, placing an give platelets up to 24 times a order for platelets. And that was my first year, and it takes about two or experience overhearing the process from three days for the donor’s body the other side of the transaction.” to recover after giving plateLytle said his friend received platelets as lets, Lytle said. part of his treatment. The friend’s brother Lytle said the platelet dona- also received platelets while he was fighttion benefits him as well as the ing a fatal battle with lymphoma. Lytle’s recipients. mother is a lymphoma survivor, and she “For me, it’s a time to be very too received platelets while she was being introspective. I literally shut the treated for the disease. phone off for a couple of hours In addition to donating platelets, Lytle and disconnect from electron- is supporting the Blood Bank of Delmarva ics,” he said. “I realize that who- through sales of his book, The Sandwich ever receives the platelets won’t Generation: Stuck In The Middle? know who donated them. And, “It’s fulfilling and empowering,” he said, on the reverse side, I will never “to do something that just might help know who receives the donated someone else in a meaningful way.” platelets. To me, that has some sort of value — I refer to it as Susan Rupe is manpsychic income. It’s appealing aging editor for InsuranceNewsNet. to me knowing that someone She formerly served who is going through a rough as communications time with cancer treatment or director for an inagents' someone who had an organ surance association and transplant will have a better was an award-winchance of making it because I’m ning newspaper reporter and editor. fortunate enough to be healthy Contact her at Susan.Rupe@innfeedback. com. Follow her on Twitter @INNsusan. and able to donate.” Lytle doesn’t know exactly Cassie Miller has Craig Lytle and Bloodhound the dog. who receives his platelets. But he an extensive backknows people who have benefitground in magazine writing, editing Craig Lytle was new to the insurance ed from platelet donation, and he said that and design. Cassie business in 1998 when one of the senior inspires him to continue donating. may be contacted agents in his office encouraged him to “One of my best friends from high at cassie.miller@ give blood. Clint Laird was chairman of school is a leukemia survivor,” Lytle said. innfeedback.com. the board at what was then known as the “By the time he became ill, I already had Blood Bank of Delaware, and he encour- been donating platelets for some time. I aged everyone in the Equitable Life office to be a blood donor. Lytle made several donation visits to the blood bank, but on one of those visits, he noticed a group of people off to one side, watching movies. When he asked what they were doing, he was told they * Decide what cause is meaningful to you were donating platelets. Platelet donation is a bit more involved than a whole-blood (and your employees, if applicable). donation, with the process taking up to two hours. * Engage with staff or volunteers of the nonAfter he learned that platelets are in profit in advance to determine their needs. demand to treat cancer patients, burn victims and organ transplant recipients * Maintain a personal connection throughout and that platelets have a shelf life of only the campaign. about five days, Lytle decided to become a regular platelet donor. Today, Lytle is president of Income &
How to start a giving campaign
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InsuranceNewsNet Magazine » January 2020
THE 2020
GIVING ISSUE
In this special section, we searched for the industry’s most socially responsible organizations who are doing great things for the causes they care about and the communities they support. We uncovered so many great philanthropic initiatives by true missiondriven organizations who are making the world a better place. In the spirit of giving, 10% of proceeds will be paid forward to Junior Achievement USA. The organization focuses on helping prepare today’s students for a bright future and their own economic success.
INSIDE Ohio National and Associates Make Lasting Impact on Communities through Culture of Giving by Ohio National PAGE 24 How to make purpose pay in a changing world by Assurity PAGE 25
Life Insurance With a Larger Purpose by Foresters PAGE 26 Alliance Group's Lee Duncan Champions the American Cancer Society and Living Benefits by Alliance Group PAGE 28
Agents of Change: Doing Well While Doing Good at National Life Group by National Life Group PAGE 30
2020 Giving Issue • Special Sponsored Section
THE 2020 GIVING ISSUE
Ohio National and Associates Make Lasting Impact on Communities through Culture of Giving
O
hio National’s mission is to make a difference in the lives of policyholders, associates, field partners and community members by helping them achieve financial security and independence today and for generations to come. This is evidenced in part by its ongoing commitment to giving back, which contributes to the financial stability of families and strengthens communities. Ohio National demonstrates this commitment in numerous ways, including paid time off for associates to volunteer, its foundation’s charitable contributions, and prestigious recognition for its associates who demonstrate exemplary community service. Support for Safe, Affordable Housing “I’m fortunate to be associated with an organization that has a culture and long history of giving back to our community,” says Barbara A. Turner, CRCP, Ohio National president and chief operating officer. “Our associates volunteer thousands of hours per year to make Cincinnati a great place to live and work. This is the Ohio National way!” One organization that benefits from Ohio National employees’ generosity is Habitat for Humanity of Greater Cincinnati. In 2019, 113 company associates volunteered more than 840 hours to build Habitat homes. Ohio National has donated more than $1.8 million to the charity since 2009.
Recognition for Service Since 1979, Ohio National has honored both sales and home-office associates who give unselfishly of their time and talent to aid their communities with the Paul E. Martin Community Service Award, named for the former Ohio National chairman. Dennis B. Hesselink, CLU, ChFC, CFP, AEP, Ohio National builder general agent with Encore Financial Group in Cheboygan, Michigan, was honored with the prestigious award in 2016 for his work with several local nonprofit, youth and community organizations in northern Michigan. “We’re a small firm, and we share Ohio National’s commitment to our small community. If I can be of assistance, I like to be,” says Hesselink. “I look at the generosity of Ohio National — for instance, its relationship with Habitat for Humanity. Not only do they give money, but they also give time and energy. I was honored to be recognized by this community-focused company.” Profit Returned to the Community The Ohio National Foundation, which has facilitated the company’s corporate giving since 1987, has donated more than $23 million to local causes.
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“We have always had that culture of support the community,” says Anthony G. Esposito, CLU, ChFC, CEBS, Ohio National senior vice president and chief human resources officer. “The community has become part of the fabric of our lives, and so at Ohio National, peoOhio National’s 2019 Giving ple are quick to give of More than 80 charitable organitheir talent, treasure and zations throughout the greater time, with much of our Cincinnati community benefited efforts driven by our asfrom the volunteer and finansociates. It’s something cial support ($1.5 million) of that has always been Ohio National Financial Services important to us, from and its associates, including the mailroom folks all gifts and support for United the way up to the CEO.” Way, Habitat for Humanity, the University of Cincinnati and the In fact, Chairman Cancer Center of Excellence, and CEO Gary T. “Doc” Cincinnati Children’s Hospital Huffman and former Medical Center, and matching Chairman, President and associate and field partner CEO David O’Maley have gifts to accredited colleges and both served as chairs of universities throughout the the citywide United Way country. campaigns. President and COO Turner serves as vice chair and board chair-elect for United Way of Greater Cincinnati. All have served not only on boards but also in various ways within the community. Mutuality Matters to Community Ohio National’s mutual company heritage provides a foundation of strength and purpose. Delivering on its promises is the commitment Ohio National makes to its policyholders and the communities it serves. “We are committed to operating in the long-term interest of our policyholders,” says Huffman. “Those interests go beyond a transaction — whether or not they purchase an insurance policy — to improve and strengthen our community and our company, and to support our associates. That’s who we are as a company.” Read about Ohio National’s solid financial strength and integrity at www.ohionational.com.
2020 Giving Issue • Special Sponsored Section
THE 2020 GIVING ISSUE
How to make purpose pay in a changing world By Assurity
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nsurance has a trust issue. It’s true — studies like the Edelman Trust Barometer 2019 have pointed out that, while trust is growing as a whole, insurers remain among the least trusted businesses across all sectors. Our industry being stigmatized in the same way as used car sales doesn’t help you make sales, but there is a solution — purpose. To build authentic trust in today’s world, you need to do more than provide quality insurance products and service. You have to look at the big picture and aspire to provide real value — to those around you and the planet as a whole. Leading with purpose and letting the profits follow is the only way to prevent your business from going extinct in the coming years. If you think it’s just a trend, you’re wrong. At the 2019 Business Roundtable, 200 CEOs representing the largest companies in the country signed a statement declaring the old ways of business are on the decline — and purpose needs to become a core tenet of their businesses. These leaders have seen the writing on the wall, and know that embracing this new model has unprecedented benefits.
72% of Americans believe
that companies working for good care more about them and their families.
Making purpose your focus has immediate, long-lasting results. Your customers will trust you more — 72% of Americans believe that companies working for good care more about them and their families, according to the 2019 Porter Novelli/Cone Purpose Biometrics study. The same study showed that those customers are vastly more likely to recommend you to their friends and family, leading to a steady stream of referrals and business. And it’s not just new clients you’ll find, you’ll also be able to more easily attract and retain top talent for your business. Trust, loyalty, talent — they all lead directly to business success. If it sounds like a daunting task, don’t worry: Assurity is already doing it. It’s been part of our mutual heritage for 130 years, and now we want to help you get here too. You can use what we’re doing as a roadmap to success, or as a starting point to forge your own path to purpose. Start by considering how your decisions affect those around you — not just your clients, but your community and the planet as a whole. If you’re not making a positive impact, rethink what you’re doing.
Along the way, pick a cause you’re passionate about — one of Assurity’s passions is sustainability and the environment. We built our headquarters with this focus in mind, and made it as eco-friendly as possible. For us, following our passion meant installing zero-waste systems for water and
Be present in your community, talk to your neighbors and take every opportunity to spread your purpose — you’ll be networking and prospecting along the way, too. electricity and designing purpose directly into our Lincoln, Nebraska home. For you, it might mean volunteering regularly at a local soup kitchen or joining a trash pickup group. Maybe you reach out by helping to build affordable homes or coaching a little league team. The important part is to make your purpose a big part of what you stand for, and to do more than just write a check. Authentic engagement resonates. Last, bake purpose into your DNA. Formalize it by telling your story to new clients and inviting prospective talent to volunteer with you or tour your green office space. Be present in your community, talk to your neighbors and take every opportunity to spread your purpose — you’ll be networking and prospecting along the way, too. Assurity committed to purpose by becoming the first major insurance company named as a Certified B Corp. That means we’re bound to look beyond short-term gains and instead work toward making the world a better place, and it’s a public signal that we’re working for the betterment of society as a whole. You can do the same. So go ahead. Demonstrate your purpose. Show your clients the good you and their carrier are doing beyond the policy’s pages. You’ll earn more than just another sale — you’ll earn their trust and a better future for everyone. For a more in-depth guide on how you can thrive with purpose, and what Assurity is doing, visit assurity2020.com.
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2020 Giving Issue • Special Sponsored Section
Life Insurance With a Larger Purpose Driven to share. Not shareholder driven. A compass built on purpose at Foresters Financial™. It’s 5:12 a.m. on April 18, 1906, and the people of San Francisco have just been rocked by a magnitude 7.9 earthquake. The city is destroyed in what remains the greatest loss of life from a natural disaster in California’s history. ¹ Twenty-six hundred miles away in Toronto, Canada, Dr. Oronhyatekha, the leader of an international insurance organization called The Independent Order of Foresters, quickly mobilizes the organization to provide emergency assistance for its customers who lost homes and property during the San Francisco quake. While this might seem like an age-old ad for the importance of homeowners insurance, what makes this story a great humanitarian tale is that Foresters was not a property and casualty insurance company. It was a life insurer. But, unlike other life insurance companies, Foresters by its very nature was driven by a larger purpose: a strong commitment to help its members and a desire to support their communities. Foresters is a fraternal benefit society — a type of organization that does not have shareholders but instead exists for its members, reinvesting in its members and their communities. How a Playground Helped a Community Heal Flash forward almost 150 years to fall 2018: It’s a crisp, clear Saturday morning at a park in northern Minneapolis. A few months earlier, a police chase ended with an out-of-control car seriously injuring three children playing in the park. Today, according to a local television report, “a symbol of hope is rising in its wake.” ² On this day, Foresters’ commitment to community draws almost 300 volunteers to build a new, expansive playground next to the Jenny Lind Elementary School, just steps from the location of the earlier tragedy. It’s Foresters’ 150th playground build completed in partnership with KaBOOM!, a nonprofit dedicated to saving play. It features Foresters’ employees, including CEO Jim Boyle, digging
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holes, pushing wheelbarrows and swinging hammers alongside other volunteers — including family members of the injured children. “It’s hard to believe the transformational impact a project like this can have on a community,” Boyle said as he admired the overwhelming turnout of volunteers. “We’re not only creating a family destination that’s fun and healthy for children; it’s also a safe environment, which is critical given what happened here.” He added, “This playground was created with input from the kids, and it’s being built in one day by people willing to invest their time to show how much they care. What you see around me today is what we stand for at Foresters and have stood for, for almost 150 years.” The Modern Benefits of a Fraternal In the 19th century, fraternal societies typically served people who moved to cities as part of the Industrial Revolution or who immigrated to North America to find a better life. In addition to providing life insurance to their members, fraternals provided a sense of
Foresters employees and members join community volunteers to rebuild the playground at Jenny Lind Elementary School, Minneapolis, MN, September 15, 2018.
2020 Giving Issue • Special Sponsored Section
THE 2020 GIVING ISSUE
“For too long, people purchased life insurance, put it in a drawer and hoped they didn’t need it.” — Jim Boyle, CEO “Any company can give back by writing a check to a charity. But that’s not who we are. It’s our members and employees who are doing the work and making a difference. We’re just helping to facilitate that,” said Boyle.
Jim Boyle, President and CEO at Foresters Financial™, helps volunteers put the finishing touches on a playground sign.
community and belonging through their meetings and societal events.3 The fraternal structure helps Foresters maintain the integrity of its purpose. The organization serves hardworking families of all walks of life in the U.S., Canada and the U.K. In fact, over two million people are members. Foresters insureds are called members because they join The Independent Order of Foresters when they purchase an insurance policy. They benefit from the organization’s profits through member benefits,* which are designed to enrich members and their communities. Modern benefits include potential tuition scholarships, financial counseling and fun family events, as well as opportunities for members to give back to their communities through grants for volunteering.
The Modern Foresters: Insurance for the 21st Century From its start in 1874, Foresters has helped families build financial security, support each other and make a difference in their communities. Almost a century and a half later, this commitment to people and to community well-being still sets Foresters apart. “For too long, people purchased life insurance, put it in a drawer and hoped they didn’t need it. We believe life insurance should provide value to you while you’re alive. We see insurance as a way to create a more rewarding life, and for members could include valuable benefits like tuition scholarships, community-building grants, wellness programs and so much more,” said Boyle. Driven by its purpose to help those who help others, a more modern Foresters is taking steps to better anticipate evolving consumer needs through effective use of data and digital technologies. For an industry as old as life insurance, that means a thoughtful digital transformation. According to Boyle, the organization is focusing its resources, technologies, and innovation on new and improved products and experiences for members. “Life insurance plays a critical role in creating financial security across generations; as we look to the future, it’s important that Foresters appeals to people of every age and circumstance, from working mothers to grandparents, from millennials to retirees and especially to anyone who shares in our purpose to help others.”
To learn more about Foresters’ mission to serve, visit foresters.com/giving-back.
¹ http://en.wikipedia.org/wiki/1906_San_Francisco_earthquake ² https://www.fox9.com/video/496867 3 https://localwiki.org/hsl/Independent_Order_of_Foresters * Foresters Financial member benefits are noncontractual and subject to benefit-specific eligibility requirements, definitions and limitations, and may be changed or canceled without notice. Foresters Financial, Foresters, and Helping Is Who We Are are trade names and/or trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Rd, Toronto, Canada M3C 1T9) and its subsidiaries. 418105 US 12/19
January 2020 » InsuranceNewsNet Magazine
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2020 Giving Issue • Special Sponsored Section
Alliance Group’s Lee Duncan Champions the American Cancer Society and Living Benefits
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or Alliance Group EVP/CMO Lee Duncan, cancer first touched his life when he was a senior in high school. His mother was diagnosed with intestinal cancer, and Lee’s world as he knew it was forever changed. As fate would have it, his mom’s cancer journey ultimately ended in recovery but left the family financially devastated despite her being covered by excellent health insurance. Lee says his memories of that time are dominated by feelings of fear, uncertainty and helpLee Duncan lessness. It didn’t take long for the family to lose the house he had grown up in, and in what should have been a time of excitement and optimism in his life, he was instead working jobs to help pay the family’s bills and keep refilling his mom’s cancer medication. When his mom was first diagnosed, Lee vowed to pursue a career path in college that would allow him to discover and develop the cure for cancer. But as the bills mounted, reality set in, and Lee made the decision to leave his pursuit of a chemical engineering degree at Georgia Tech to come home and help the family financially. After his mom was given a clean bill of health, Lee returned to school and earned a degree in business from the University of Georgia. Still determined to make a difference for other families facing cancer, he met his mentor and eventual business partner and was introduced to a new concept Living Benefits life insurance. While he originally thought his contribution would come through scientific discovery, Lee soon recognized a powerful opportunity to help families avoid the same financial trap his family had fallen into. In the 16 years since Lee joined, Alliance Group has protected over 150,000 American families with Living Benefits life insurance and has delivered millions of dollars directly into the hands of those affected by cancer. Beyond the business side, Lee has made a difference by spending hundreds of hours each year volunteering, fundraising and helping raise cancer awareness via the American Cancer Society. We spoke with Lee about his passion for supporting cancer causes and helping educate others about life insurance with Living Benefits.
Why is raising awareness about cancer important to you personally and professionally?
I hate cancer. I hate that it continues to wreak havoc on so many lives. Until we find a cure, people are going to continue to be affected,
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and we need to find ways to help them too. My mom had a job and good health insurance, but there’s no health insurance policy out there that covers lost income and other expenses that come with a cancer diagnosis and treatment and all that. Working while you are being treated for cancer is really difficult, sometimes impossible. Families have to worry about copays, deductibles and medications that aren’t covered by insurance. Seeing the financial strain cancer creates is tough for me, especially when I know I might have been able to help them avoid it. That’s why I’m so passionate about educating every person I can about what these Living Benefits are and what they can do.
What impact have you seen on the financial side of serious illnesses like cancer?
I mean, we’ve all seen it. I’m sure you and everyone reading this can tell a story about a friend or family member whose financial picture was destroyed by cancer. Our mission is to help people prepare for and avoid that land mine. We’ve seen this money save countless families from medical bankruptcy, sure, but we’ve also seen this money go toward funding experimental treatments that their health insurance wouldn’t cover. Without Living Benefits, these families couldn’t afford those treatments, and without those treatments, maybe that person doesn’t survive — in those cases, we’ve actually seen Living Benefits save lives.
Lee poses with longtime friend Andrea Buffo, who nominated him for Real Men Wear Pink of Atlanta in 2016.
2020 Giving Issue • Special Sponsored Section
When did you get involved with the American Cancer Society, and what was your role?
Five years ago, I was invited to walk in the Making Strides Against Breast Cancer event in Atlanta. That support turned into a sponsorship, with many of Alliance Group’s employees participating. The year after that, in 2016, the American Cancer Society started a fundraising campaign called Real Men Wear Pink. One of my friends nominated me, and my competitive instincts kicked in. Thanks to a lot of generous and supportive people, my team raised more than $60,000 that year for Real Men Wear Pink in Georgia.
THE 2020 GIVING ISSUE
But survival requires treatment, and treatment requires money. Having emergency access to your life insurance policy’s death benefit while you’re still alive is a hugely valuable option to have. More people should know about that option. Alliance Group created Living Benefits Awareness Month three years ago as a way to spread the word about Living Benefits. Every January, we put together a national marketing blitz
“ I hate cancer. I hate
How has your relationship with the American Cancer Society grown, and what is your current role?
that it continues to wreak havoc on so many lives.” – Lee Duncan
Things have really evolved since that first year. I’ve been on the American Cancer 50% of all bankruptcies every year in the U.S. Society’s Georgia Community Leadership Board of Directors for two years, and this are the result of unpaid medical bills. past October, I was asked to coach 28 men who fundraised in the 2019 Real Men Wear Pink campaign, for our agents to provide them tools to champion Living Benefor which I’m co-chair. I’m proud to say that we crushed our fits all January long with #LBAM. Our partners have access to $250,000 fundraising goal for the month of October and hit the LBAM videos, social media material, swag, shareable articles, $300,000 mark. These funds go straight to research and vital premade magazine ads and radio scripts, and more. The impact services for people battling cancer, and I couldn’t be happier has been huge, and we are already planning for some additions with the team’s success. this year that will make LBAM even bigger in 2020.
Why does Alliance Group sell only life products that include Living Benefits?
Living Benefits come at no cost to the client. There’s literally no reason to own an old-fashioned life insurance policy that doesn’t include modern options to accelerate your death benefit if you get sick, and so we won’t sell those types of policies. In the book I co-wrote with our marketing director, Samuel Howe, Next-Gen Protection: Living Benefits & the Future of Life Insurance, we talk about the implications of critical illness these days. People are surviving illnesses like cancer longer, which is great news.
How does it feel to be able to change lives?
I don’t want Alliance Group to just be a large brokerage company that sells life insurance. I want to have a greater purpose, and part of that is the education that we provide to the public, agents and advisors. My position has allowed me to help people, and it has been really fulfilling. I’m excited about what we’re doing at Alliance Group, not only with American Cancer Society but also other opportunities that we’ve had to help people along the way. Providing financial education, offering that foundation of protection for people and helping them plan for the what-ifs in life — it’s the passion that drives me every day, and I’m going to keep doing it for as long as I can.
To learn more and receive a complimentary copy of Lee’s book, Next-Gen Protection: Living Benefits & the Future of Life Insurance, visit www.ngpbook.com.
Lee and his wife, Amy, attending the Hope Ball in Atlanta, GA, a fundraising event for the American Cancer Society. January 2020 » InsuranceNewsNet Magazine
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2020 Giving Issue • Special Sponsored Section
Agents of Change: Doing Well While Doing Good at National Life Group
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or National Life Group agent Richard Reyes, it began in the parking lot of a Veterans Administration hospital in Florida. For fellow agent Billy D’Angelo, it started in the hustle and bustle of New York with the loss of his firstborn son, and then the struggles of another son silenced by autism. The overwhelming desire to give back has driven these agents to transform themselves into agents of change, launching missions that far transcend coverage options and client portfolios. When Richard Reyes stepped outside the dense walls of the VA Hospital in Jacksonville, Florida, in search of better cell phone reception on a call to his wife and fellow agent, Rayna, he was captivated by the sight of a double amputee relearning how to walk. “It was very moving,” Reyes said. That struggle ignited a philanthropic fire that spread to the couple’s involvement in a host of military and first-responder causes. Thousands of miles away, Billy D’Angelo’s call to action came after he and his wife, Kristina, endured the searing loss of their son Nicholas, born weighing 1 pound, 14 ounces. D’Angelo began working with the March of Dimes to combat preterm births and became the youngest treasurer ever to lead that organization. His crusade later expanded to battling autism after his son William “Billy” Nicholas, now 4, was diagnosed at 16 months. A traditional, take-no-prisoners Italian-American living in Staten Island, D’Angelo hit autism head-on. His son’s silence became D’Angelo’s superpower. It is this passion that earned these three game-changers the Agent Do Good Award at National Life’s sales conference in Hawaii. This award reflects the company’s values of “Do Good. Be Good. Mehran Assadi Make Good.” in supporting the causes its agents are committed to. More than 150 agents were nominated for the Agent Do Good Award last year. Richard, Rayna, and Billy said the “Do Good” culture starts at the top, with their iconic leader, Mehran Assadi. “Our company’s corporate values ‘Do Good. Be Good. Make
Rayna and Richard Reyes (second and third on the left) became true-blue supporters of the Texas-based Adaptive Training Foundation. Good.’ are more than a catchphrase; they’re our differentiator,” Assadi said. “We don’t want to just make a donation and check the ‘mission accomplished’ box,” Assadi explained. “We insist on living our values. We roll up our sleeves and do more.”
Serving Wounded Service Members
Richard, who grew up in Alabama, said that his VA Hospital encounter was an epiphany for him. His father and brother were veterans, as was Rayna’s grandfather, but this sight made it personal. He told Rayna, “We’ve gotta do something.” The couple, parents of three children, decided to support Folds of Honor, an organization that grants scholarships to the spouses and children of fallen and disabled service members. The couple also became true-blue supporters of the Texasbased Adaptive Training Foundation. Richard noted that 22 veterans a day take their own lives. They decided to raise money and awareness for veteran-athletes who lost limbs. Richard recalls the 13th class in the nine-week ATF program. Their instructor forbade the amputees from parking in the center’s “Handicapped Parking” spaces. But no need: Not one of them had parked there anyway. That resilience and lack of self-pity redoubled Richard’s desire to serve. Their cause is part of a larger culture at National Life, they said. The company hires veterans, and Richard and Rayna have many disabled veterans as clients. Through the ATF, they met U.S. Marine and double amputee
2020 Giving Issue • Special Sponsored Section
Billy D’Angelo with his wife Kristina and their sons Patrick Myers of Texas. Myers was wounded in Iraq in 2005, and his injury plunged him into a deep depression. With the support of ATF, Myers was able to lose more than 50 pounds, coach pee-wee football and “jump out of airplanes with a smile on his face,” Richard recounted. When their veteran-clients share their war stories, “It’s pretty amazing. It just makes us want to do more,” Richard said. Rayna said their tales give her “chills and goose bumps.” The couple helps with Jacksonville’s annual “Guns and Hoses” fundraiser to benefit fallen first responders; feeds veterans who have fallen on hard times; and supports Operation Cherry Bend, which helps veterans to hunt. Their calendar is also filled with charity concerts and golf outings. Why not just mail in a check? Rayna said, “I want to leave a legacy. I want [us] to do something bigger than ourselves.” Richard agreed. “There’s more to life than work. Our creed is God, family, work. “This is not about us,” he continued, referencing their Agent Do Good Award. They had wanted to donate anonymously, but the ATF disclosed their generosity nevertheless. Richard said they hope to create a chain reaction. “You get to see the generosity spread.” And, like Florida’s golden sunshine and Myers’ message, it has.
Speaking for Autism
D’Angelo calls his son William “my hero” and labels his quest for a cure for autism his current obsession. “When people hear about my son, they say ‘I’m sorry to hear that.’ But I say, ‘Don’t be.’ I feel like this was a privilege in a way. It’s given me kind of an ultimate perspective.” D’Angelo shares the story of his namesake often to show that he is not just selling insurance or analyzing a portfolio; he is a genuine person who has turned suffering into service.
THE 2020 GIVING ISSUE
In coping with autism, D’Angelo is quick to acknowledge his “National Life family” — James and Victor Muro, Jim Ortenzio and Nicole and Mike Sabato, as well as Cathy, Tommy and Frank Muraca, who launched the GRACE Foundation. Because he and his wife were preparing for the birth of their daughter, he wasn’t able to accept his Agent Do Good Award in person, so Victor Muro and Ortenzio accepted on his behalf. That award saluted his service on the board of Team 94, which is devoted to enriching the lives of adults with autism, along with his seat on the board of a local hospital and “The William Nicholas D’Angelo Center for Autism Research,” a nonprofit in the planning stages. His crusade was born out of desperation with traditional medicine, he said. Frustratingly, their pediatrician treated William the same way he treated their son Antonio, but the two boys were clearly different, D’Angelo noted. The doctor never asked about William’s progress in occupational and physical therapy. This experience prodded D’Angelo to train to be a special-needs planner and even to contemplate buying a house on the same street as the music therapist he desperately pursued to treat his son. D’Angelo recounts how his son was “bright-eyed and bushytailed,” but after a round of antibiotics for an infected mosquito bite, vaccinations, a virus and ear infections, he began having trouble sleeping and then lost his speech and mobility. “I’ve lived my life since 2013 rechanneling negatives into positives and using [them] as fuel to bring about greater change and drive a cause that will outlive me,” he said. “I want [my son] to be the most prominent member of the D’Angelo family by the age of 12 — without saying words. “It means the world to be recognized with the Do Good Award,” D’Angelo continued. “But I truly don’t do it for the recognition. I want awareness to be directed to the cause. “The culture at National Life breeds and lends itself to a fight and a drive and a cause-driven approach unlike anything I’ve ever seen in the corporate world.” Having worked at a much larger, rival firm, he said, “This culture is unlike any company I have ever been involved in. “I just think that with love and passion for a cause, we can accomplish anything. We are truly becoming a voice for the voiceless,” D’Angelo said. And like the Reyes family, these do-gooders are being heard, making an impact that echoes across the nation.
To learn more about National Life Group’s mission, visit https://www.nationallife.com/OurStory.
the Fıeld
A Visit With Agents of Change
The Phoenix of
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InsuranceNewsNet Magazine » January 2020
THE PHOENIX OF ALBUQUERQUE IN THE FIELD
W
hen she was a teen, Aprilyn Chavez Geissler had a dream that was quite different from that of your average high school student. “I knew from the time I was in high school that I wanted to be in the insurance and financial services industry,” Geissler said. “So having the opportunity to live my dream of being able to help others achieve their dreams is what drives me each day.” Geissler is first executive vice president at Gateway Insurance and Financial Services in Albuquerque, N.M., and has owned and operated her own firm for nearly 17 years. She is the recipient of the National Association of Insurance and Financial Advisors 2019 Diversity Champion Award. But the road to achieving her dream was littered with boulders. After she fled an abusive relationship, Geissler’s deeply religious parents disowned her. Other members of the family, trying desperately to avoid conflict with Geissler’s parents, chose not to get involved, leaving a 19-year-old Geissler to live in her car.
because of her abuser’s intrusions. Geissler’s story made its way around, leading an anonymous member of the Hispanic Chamber of Albuquerque to offer her a place to stay. But, as Geissler recalls, it soon became clear to the good Samaritan that she needed more than a roof over her head. Now that Geissler’s most basic needs were being met, the good Samaritan urged her to begin working on herself in order to deal with the trauma she had experienced and to rebuild her self-confidence. “I was very fortunate,” Geissler said. “Many women don’t get the help that I got.” “Let your struggle be your strength, not your identity” became her mantra. Much like the legend of the phoenix, a bird from Greek mythology that rises from the fiery ashes of its predecessor to be born again, Geissler rose again each day to face the challenges in front of her. She never pitied herself, and she never lost sight of her goal — to become an insurance agent. While she was still in college, Geissler finally got the break she needed. She was offered a paraplanner position at
James R. Hawk is NAIFA-New Mexico’s president. He has also known Geissler for nearly 20 years, and he said that her perseverance is a trait he admires. Hawk first met Geissler when he taught Life Underwriter Training Council Fellow classes to agents in his company and opened the class to other agents. Geissler was the only one from her company to attend, and Hawk said she did well. “It was like walking into a lion’s den,” Hawk said of Geissler’s presence in class. “She did a great job and was holding her own. If it did intimidate her, you never knew it and you never saw it.” Hawk and Geissler have maintained their friendship over the years, each bringing something unique to the friendship. “She’s been such a pal to me,” Hawk said. “I used to joke with her that I was the idea guy, but she was the one who could implement the good ideas.” Hawk described her as energetic, determined and creative. Now, thanks to her grit and determination, Geissler is in a position to help other women rise above abuse — physical, emotional or otherwise — and realize their self-worth.
ALBUQUERQUE Aprilyn Chavez Geissler rose from abuse and homelessness to achieve her dream and help other women achieve theirs. BY CA SSI E M I LLER
“I lived in my car and went to school for about three months,” Geissler said. “It was my life. It was not a big deal to me.” In fact, the difficult situation only seemed to bring out Geissler’s creativity and perseverance. “I would just go to the gym, and I would shower and I would eat in the HUB at the University of New Mexico,” she said. Despite her optimism, Geissler was dealt another blow when she was fired from her job at the nearby T.J. Maxx
Ameriprise Financial, where she was able to realize her dream of becoming a licensed agent. “If you can get through what I’ve gone through, if you can become a survivor of a domestic violence situation, if you can live in your car and go to school and not internalize that, you can do anything,” Geissler said. “That was such a pivotal moment in my life and I am so grateful to the people in my life who helped me get through that.”
“I tell my story, but I don’t focus on that so much,” she said. “I focus on the fact that we can grow from there. We can’t change what’s happened to us, but we can take that and channel it, and we can be better as a result of what we’ve had to go through.” Geissler seizes every opportunity to empower and lift up others in her community, volunteering her time with NM TeamWorks, a nonprofit welfare-to-work program for minority women who are
January 2020 » InsuranceNewsNet Magazine
33
the Fıeld
A Visit With Agents of Change
single parents or coming out of abusive relationships. Some of the women who Geissler mentored have shadowed at Geissler’s firm. Some are now employed at her firm, and others have used what they’ve learned to move into other career areas. Geissler says employing these women is her way of leading by example and showing women their true worth. “You have all the strength that you need inside of you,” Geissler tells them. She also volunteers with Crossroads for Women, an Albuquerque-area nonprofit that provides housing and therapeutic services to empower previ“By empowering women to embrace their self-worth ously incarcerated women. and confidently become financially independent and “By empowering women to embrace their self-worth and personally successful, I am fulfilled.” confidently become financially independent and personally successful, I am fulfilled. I hope to continue to grow my company nationally and to help inspire women to take control of their lives, including leaving dangerous others to embrace challenges and make them their strengths,” situations and relationships. she said. “Finances are the reason that women do not leave where they One way that Geissler seeks to empower women is by teach- are, because they don’t believe they can be financially viable on ing them financial literacy basics. She hopes that it will inspire their own,” said Geissler, who has an 8-year-old daughter. Living in a culturally diverse area, Geissler said she sees the A DV E RT I SE M E N T need for financial literacy among women from patriarchal cultures. She recounts a question she received from a Native American woman who didn’t understand how to put money into a savings account. “That’s how basic the need is,” Geissler said. “Nobody on the reservations is talking about saving money or investing or budgeting.” The best way to combat this, Geissler said, is to “help women take ownership of their futures through What if all that separated you from the top five percent knowledge.” of producers (the folks making $400k+ a year)
5 STEPS TO 6 FIGURES
was a small shift in perception? What if there were five simple things you could do — starting today — that would help you consistently sit in front of more qualified opportunities than ever before?
Cassie Miller has an extensive background in magazine writing, editing and design. Cassie may be contacted at cassie.miller@ innfeedback.com.
Think it’s too good to be true? Think again!
Visit www.FiveStepsSixFigures.com today and download your free guide that reveals exactly what you need to do!
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34
InsuranceNewsNet Magazine » January 2020
We created #LBAM three years ago as a way for agents and advisors to raise awareness in their local communities about these revolutionary products.
THE FIGHTER IN THE FIELD
All January long, Alliance Group coordinates a national marketing blitz centered around Living Benefits. Agents have access to #LBAM marketing kits and caches that include: #LBAM videos, social media material, #LBAM-branded swag, shareable articles, pre-made JANUARY IS magazine ads and radio scripts, and more. ITS LIVING BENEFITS NTH AWARENESS MONTH If you love Living Benefits, you’l love #LBAM! If you’re a producer or agency interested in participating, visit www.myLBAM.com or call 888-969-9233 for more info. Happy #LBAM!
At Alliance Group, Living Benefits are kind of our thing.
raise We created awareness #LBAM three years ago as a way in for agents their and advisors to raise awareness in their local communities about these revolutionary products.
entered All January long, around Alliance Group coordinates Living a national marketing blitz centered around Living clude: Benefits. Agents have access to #LBAM marketing kits and caches that include: articles, #LBAM videos,pre-made social media material, #LBAM-branded swag, shareable articles, pre-made magazine ads and radio scripts, and more.
ncy Ifinterested you love Living Benefits, you’ll love in #LBAM! If you’re a producer or agency interested in ore participating, info. visit www.myLBAM.com or call 888-969-9233 for more info. Happy #LBAM!
January 2020 » InsuranceNewsNet Magazine
35
LIFEWIRES
Individual Life Sales Up Slightly In 3Q Individual life sales crept up in the third quarter, with new annualized premium up 2% over the same period in 2018, LIMRA reported. Sales for the first nine months of 2019 were up 1% over the same period the previous year. But although premium was up over 2018, the number of policies sold fell 3%, LIMRA said.
U.S. Individual Life Growth Rate Annualized premiums
Face amount
Number of policies
Market share by premium
Third Quarter 2019
2%
4%
-3%
100%
Year-to-date
1%
3%
-3%
100%
SOURCE: LIMRA’s U.S. Retail Individual Life Insurance Sales Summary Report, Third Quarter 2019
Indexed universal life continued to be the driver of sales, as it has in nine of the past 10 quarters, LIMRA reported. IUL sales climbed 7% for the quarter and for the first nine months of 2019, compared with the prior year. IUL represented 25% of the individual life insurance premium sold during the first nine months of 2019. Universal life sales remained flat, despite having 36% of the market share. Variable universal life showed a 2% gain, its eighth consecutive quarter of increases. Whole life sales were flat, although the product represents 35% of the market. Term life new premium increased 3% in the third quarter compared with the year-ago period. Term life represents 22% of market share.
IS LIFE INSURANCE RELEVANT?
Life insurance isn’t selling like it used to, and one industry organization wants to find out why. The Association for Advanced Life Underwriting is undertaking a yearlong initiative aimed at the root cause of why the consumer “protection gap” continues to grow. That root cause? Consumer relevance. The protection gap is a persistent problem, the AALU study showed. In 1965, Americans purchased 27 million policies, individually or through employers. By 2016, a population that was more than 50% larger still bought only 27 million policies. In the survey, 500 adults who don’t own individual life insurance were asked why they haven’t bought a policy. Most of the respondents (38%) said they believe they need life insurance. But a nearly equal percentage (37%) said they do not. An additional 25% said they are unsure whether they need it. About half of the respondents said they believe life insurance is relevant to their financial needs. But it seems that a sizable percentage of the population is more concerned about living too long than about dying too soon. DID YOU
KNOW
?
36
Eighty-four percent of those surveyed said they would be likely to buy a life insurance policy with living benefits.
SMOKING CAN SEND PREMIUMS ABLAZE
Things such as age, medical history, current health, and smoking habits can alter a person’s annual life insurance premium. But how much does smoking affect life insurance premiums? BestLifeRates and NinjaQuoter looked into it. Average annual life insurance premiums for smokers vs. nonsmokers.
Smokers: $3,977 Nonsmokers: $2,052
SOURCE: BestLifeRates
What they found was that smokers pay an average of $3,977 in annual life premium, compared with $2,052 for those who don’t light up. Looking at it another way, smoking could increase life insurance premium costs by 94%. The biggest premium gap between smokers and nonsmokers is among
QUOTABLE While third quarter is typically a crummy quarter for life sales, this one was particularly challenging. — Sheryl Moore, president and CEO of Wink Inc.
policyholders in the 70-to-79-year-old age group. Smokers in that bracket paid an average of more than $7,000 a year for a $250,000 10-year term life policy, as opposed to nonsmokers in their 70s, who paid more than $4,000 annually for the same coverage.
NAIC EYES NEW RULES FOR OLD POLICIES
A significant split opened up on applying tightened IUL illustration rules to in-force policies. A National Association of Insurance Commissioners’ (NAIC) subgroup is still working through the details, but has a mandate to clamp down on multipliers and bonuses that critics say enable insurers to get around Actuarial Guideline 49, approved in 2015. Whether it’s fair to apply the final changes to in-force illustrations produced much disagreement during an IUL Illustration Subgroup conference call recently. In late October, the Life Actuarial Task Force voted to add language tightening AG 49, leaving the details to the subgroup. The key wording is this: Multipliers or other enhancements should not illustrate better than nonmultiplier designs. Vincent Tsang of the Illinois Department of Insurance said clients would be confused if their agents came back with a new illustration on a policy they had already bought. Birny Birnbaum, executive director of the Center for Economic Justice, said the issue has already been decided by NAIC precedent, which requires application to in-force policies.
Foresters Financial has updated its underwriting guidelines across its nonmedical life insurance product portfolio for Americans who use cannabis. Source: LIMRA
York State Department of Financial Services Source: New Foresters
InsuranceNewsNet Magazine » January 2020
LIFE
How A Life Policy Can Send A Grandchild To College Life insurance can enable your client to pass on wealth while they are still alive. By Jason Wellmann
L
eaving a legacy is a top priority for many people. The death benefit proceeds from a life insurance policy can be an important financial resource for your clients’ loved ones, allowing them to address a number of needs, including debt, college funding or other financial obligations. But what if your clients could provide their beneficiaries with a similar type of financial assistance while they are still alive, all in a tax-efficient manner? While some clients may choose to pass a legacy to beneficiaries through the life insurance death benefit, it may be appropriate for other clients to choose to pass on wealth to their loved ones while they are still living. Let’s take a look at a hypothetical example to see how an affluent client could use an IUL policy to assist their loved ones before the client dies, and use that policy to help those family members build a more stable financial future.
Exploring The Additional Benefits Of IUL
Meet Sandy and Mike. They have a 2-yearold granddaughter named Emma. Given 38
the rising cost of college, Sandy and Mike are concerned how their daughter Jessica and son-in-law, Todd, both 36, will fund Emma’s college education.
How It Works • Policyholder pays premiums as they like. • Accumulation value grows tax deferred. • Accumulation value is protected. • Policyholder can access cash value. • Policy can be tailored to an individual’s needs. • Individual can use policy to pass on wealth before they die, as well as leave a death benefit. Sandy and Mike want to begin to pass on wealth to Jessica and her family. They have planned well for their retirement, so they are financially able to help Jessica’s family without jeopardizing their own financial future. Their financial professional and tax advisor suggest that Sandy and Mike each
InsuranceNewsNet Magazine » January 2020
gift $15,000 (the annual gift tax exclusion) for the next 17 years to Jessica, which she will use to pay the premium on an IUL policy. This will provide the death benefit protection for Jessica’s family — as well as the opportunity to build accumulation value. Any available cash value can then be accessed through policy loans or withdrawals to help supplement a wide range of future financial responsibilities, including Emma’s college expenses. In this scenario, Jessica’s IUL policy — funded by a $30,000 annual gift from Sandy and Mike — may be able to provide the following financial benefits to Jessica and her family after 20 years, when Emma graduates from college. (This assumes the policy experiences accumulation between the time it is issued and when policy loans are taken. This hypothetical example is for illustrative purposes only and does not represent actual clients. It is only one example of how this strategy could work.) An indexed policy loan (a type of loan amount that earns interest) can be used to help Emma pay back any student loans she uses to pay for college. This gives the accumulation value in the IUL policy another four years to potentially accumulate while Emma is attending college. An indexed policy loan also can help Jessica and Todd pay off their mortgage. Jessica and Todd can access the policy’s available cash value through policy loans
HOW A LIFE POLICY CAN SEND A GRANDCHILD TO COLLEGE LIFE to get out of debt and help pay off their mortgage. Jessica and Todd will have access to any remaining cash value through policy loans or withdrawals to help supplement their retirement income. When implementing this legacy strategy, it’s important to keep the following considerations in mind. An IUL policy may be subject to market volatility to a certain extent. It is possible to earn 0% interest in any given year. In addition, IUL is not a source of guaranteed retirement income. The policy must earn sufficient interest to support a loans strategy. Actual interest credited to the life insurance policy will impact the potential loan amounts. The amount of interest the policy earns impacts the amount of cash value available, and there is no guarantee that there will be sufficient cash value available to keep the policy in force, which presents the potential for risk to the policy. When accessing policy loans and withdrawals, the available cash value and death benefit will be proportionally reduced and the loans may be taxable if the policy lapses or is surrendered. Your clients should consider the potential tax implications of taking policy loans and withdrawals, and discuss them with their tax professional. When taking policy loans, your clients need to be sure that they are managing the policy values and premium payments to ensure that the policy remains in force. It is important to review the potential impacts of taking sustained loans at a variety of rates. This strategy is not suitable for everyone. Along with your guidance, clients should be encouraged to consult with their tax advisor to determine whether this strategy is appropriate for their individual situation.
People Are Struggling
Multiple reports demonstrate that many people are currently struggling with different aspects of their finances, including student loan debt, credit card debt and general lack of retirement savings. Consider the following: » Student loan debt. There are 45 million borrowers who collectively owe more than $1.5 trillion in student loan
debt in the U.S. Student loan debt is now the second-highest consumer debt category — behind mortgage debt — and is higher than both credit cards and auto loans. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Access and Success. » Credit card debt. Total U.S. credit card debt was $868 billion in second quarter 2019, a 4.7% increase from the same time the previous year, according to a report published by The Motley Fool. As of June 2019, the average credit card debt per U.S. household was $8,398, the Federal Reserve reported. Fifty-five percent of U.S. adults who have credit cards report also having debt, according to a CNBC report. » Lack of retirement savings. According to a study from Transamerica, median retirement savings for American workers sits at around $50,000. Even more worrisome, a recent report from the Federal Reserve found that nearly a quarter of all American adults have no retirement savings or pension at all. These are alarming statistics underscoring the idea that many people need help with these financial challenges sooner rather than later. Index universal life insurance can provide necessary death benefit protection as well as accumulation potential that can be a financial resource for loved ones in the near future and potentially for generations to come. As this example shows, an IUL policy can be a powerful way to help your affluent clients provide for their children now and start a solid foundation for the next generation as well. With the combination of financial protection, tax benefits and loan flexibility, IUL can be a great way for these clients to accomplish multiple goals. And the best part of this legacy strategy is the fact that your clients can still be around to experience the positive impacts of their gifts. Jason Wellmann is senior vice president of life distribution for Allianz Life. Jason may be contacted at jason.wellmann@innfeedback.com.
January 2020 » InsuranceNewsNet Magazine
39
FIA Sales
ANNUITYWIRES
$56.6B YTD
$50.1B YTD
FIA Sales Slowing But Still Strong
$18B 3Q
$18.6B 3Q
Following a record-breaking quarter for fixed 2018 2019 indexed annuity sales, market conditions SOURCE: LIMRA dampened demand for FIAs in the third quarter, LIMRA reported. Despite that, FIA sales were $18.6 billion, 3% higher than the third quarter of 2018. Year to date, FIA sales were $56.6 billion, 13% higher than the same period in 2018. Fee-based FIA sales were $159 million in the third quarter, more than double the sales in the third quarter of 2018. However, this is a 30% drop in sales from the first quarter of 2019 results. Fee-based FIA products still represent less than 1% of the total FIA market. Total annuity sales increased 1% in the third quarter to $59.4 billion. For the first nine months of 2019, total annuity sales were $184.2 billion, an increase of 8% over the prior year. Despite an unfavorable interest rate environment, fixed annuities continued to represent the majority of the annuity market, with 55% market share in the third quarter, which is down 4% from the prior quarter. Fixed annuity sales have outperformed VA sales in 13 of the past 14 calendar quarters. required and monthly premiums starting as low as $25. Adult children pay the monthly premiums for AgeUp and receive the monthly payouts once the parent reaches the trigger age.
NEW ANNUITY AIMED AT CAREGIVERS
Most consumers buy annuities to keep from outliving their money in retirement. MassMutual has come out with an annuity with a twist — it’s targeted for older adults to buy for their aging parents. AgeUp is designed to provide financial protection for the adult children of the baby-boom generation who are concerned about their parents outliving their financial resources. The annuity is issued by MassMutual and was developed by Haven Life, MassMutual’s in-house, direct-to-consumer startup. What makes AgeUp different from other annuities? The product is designed for financial protection for life after age 90, and it is the only annuity that converts into an income stream for life beginning at age 91 or later. It’s the first annuity to have no upfront contribution DID YOU
KNOW
?
40
A FINAL WHACK AT NAIC ANNUITY SALES RULE
Stakeholders are making a last-ditch effort to sway state insurance regulators on its suitability in annuity transactions model law. The National Association of Insurance Commissioners’ Annuity Suitability Working Group presented a tentative draft of its annuity sales model during the NAIC Fall Meeting in
early December. The model incorporates a best-interest standard into existing suitability principles. Industry reps, trade associations and consumer groups want a final say on
QUOTABLE We expect to see a greater portion of FIA sales to shift to guaranteed income products in the next several quarters. — Todd Geising, LIMRA
several key issues. They include liability, material conflict of interest, best-interest obligation, care obligations, and sales contests and quotas. Ideally, the NAIC would approve the model and send it to the states for potential adoption in 2020.
INSURTECH PLATFORM DELIVERS ANNUITIES
Annuity sales become more high-tech all the time. In the latest insurtech development, SIMON Markets announced that it will expand its online platform to help financial professionals navigate the indexed annuities market.
SIMON has teamed up with Prudential and aims to change the way that financial industry participants use annuities for retirement planning. According to a news release, SIMON will begin offering Prudential’s PruSecure FIA on its platform. SIMON is currently being used by over 30,000 financial professionals who manage more than $3 trillion worth of assets. SIMON offers customizable tools to assist professionals in engaging in longterm financial planning, which is based on their clients’ risk profiles and investment horizons.
Although companies already can offer annuities in their 401(k) lineups, just 9% do.
InsuranceNewsNet Magazine » January 2020
Source: Source: LIMRA SRI Plan Sponsor Council of America
A nn
s uitie
ANNUITY
Aim Annuity Messages At The 4 Sources Of Uncertainty The Four Sources of Uncertainty
Uncertainty is at the root of why consumers aren’t buying annuities, behavioral researchers said. By Susan Rupe
T
he picture of the retirement landscape isn’t a pretty one. Boston College researchers estimate that only about half of American households will be able to maintain their current standard of living in retirement. Annuities provide guaranteed lifetime income, something that should be attractive to those who fear running out of money in retirement. So why aren’t more Americans buying annuities? Athene and the National Association for Fixed Annuities attempted to answer that question in a recent webinar. It’s not that consumers don’t appreciate what annuities can do. Seventy percent of respondents told a TIAA survey that receiving a guaranteed monthly “paycheck” in retirement is important. But that same survey revealed only 13% of working-age individuals have purchased an annuity, and only 12% of individuals plan to buy an annuity at the time of retirement. Over the past 15 years, researchers have attempted to solve the puzzle of why Americans like the idea of annuities but are reluctant to buy them. The list of likely reasons ranges from price to loss aversion. But two behavioral researchers from UCLA said the list of reasons boils down to one factor: uncertainty. And there are four sources of that uncertainty:
» Longevity. » Spending. » Investment outcome. » Decision. Hal Hershfield, associate professor of marketing and behavioral decision-making at UCLA’s Anderson School of 42
Longevity
Spending
Investment Outcome
Source: Athene
Decision
Management, broke down those four sources of uncertainty. One of the uncertainties over longevity centers on the question: How long will I live? he said. Nobody knows the answer to that question and many people don’t want to ask. Uncertainty is exacerbated by
InsuranceNewsNet Magazine » January 2020
something called mortality salience, which suggests people recognize they will eventually die but there’s nothing they can do about it, Hershfield said. “People either act like ostriches or they engage in some symbolic kind of immortality. Because annuities bring up the thought of death, people may naturally avoid them.” Consumers also have a bias around loss aversion, Hershfield said. “It’s the idea that losses loom larger than gains. The loss of an equivalent amount will feel worse than the gain of the same amount will feel good. People will act to avoid losses because they are so painful, and people fear they will lose money on their annuity because they will die early.” Hershfield recommended overcoming longevity uncertainty by avoiding any mention of death in promotional material. “If it’s possible, frame annuities as a product that enables people to have income for as long as they live,” he said. He also recommended framing the annuity purchase as buying “enhanced financial security.” Spending is a source of uncertainty among prospective annuity buyers because many of them don’t know how much their expenses will increase or decrease during retirement, Hershfield said. This spending uncertainty is exacerbated by consumers’ perceptions of trade-offs between sacrifices they need to make now and sacrifices they need to make later. Consumers are more likely to opt for smaller rewards now instead of waiting for larger future rewards. For example, he said, when consumers were asked whether they want $500 now or $1,000 in five years, most chose the $500 now. “Applied to the annuity space, people may discount their future needs and spending because it just doesn’t apply to the present,” he said. Many consumers think a lump sum is worth more than it really is, he said, and is worth more than an annuitized stream of funds. When consumers fork over a
AIM ANNUITY MESSAGES AT SOURCES OF UNCERTAINTY ANNUITY
Gap in stated need vs. purchase
Percentage of Americans who ...
• 70% of respondents said that receiving a guaranteed monthly “paycheck” during retirement was important
70%
Your Greater Life Starts with Catholic Order of Foresters
w hy does this gap exis t ?
• Yet ...
✓ Only 13% of working-age
individuals have purchased an annuity
✓O nly 12% of individuals plan to purchase an annuity at retirement ... the very time when the need would seem to be top of mind
13% ... indicate that a guaranteed retirement income is important
Join a committed TEAM:
... have purchased an annuity
• Life Products designed exclusively for Catholics
Source: TIAA 2017 Lifetime Income Survey
large sum of money to buy an annuity, he said, it may seem to them like it is more money than what they will receive month by month. How to solve that issue? “Bring the future closer,” he said. “Get people to think more closely about what they will be doing in the future; make the future more vivid and closer to the present.” Hershfield also advised linking accumulation with decumulation. “Allow consumers to contribute a little bit to an annuity with each bit of retirement saving they do, so it doesn’t seem too painful to part with a large sum of money,” he said. Investment outcome uncertainty stems from consumers not knowing how much they will receive from an investment, said Craig Fox, professor of psychology and medicine at UCLA. Investor overconfidence plays into this uncertainty. “People think they can do better investing on their own,” Fox said. “They think the future will be great. They think bad events are less likely to happen to them.” Consumers also may fear the insurance company may not make good on its guarantees. Fox recommended overcoming investment outcome uncertainty by educating consumers on the difference between insurance and investments and on building trust with consumers.
The uncertainty around decision-making occurs when consumers ask themselves if they are making the right choice to buy an annuity, Fox said. “They may procrastinate. Retirement planning decisions are complex, and most consumers are not financially literate. The more facts and numbers you give people, the less confidence they have in their own ability to make a decision. This can cause them to not make a decision at all.” Decision uncertainty is “a formidable problem to overcome,” Fox said. He recommended simplifying annuity presentations to consumers and limiting the number of options available in selecting an annuity. In addition, Fox recommended advisors set reminders and prompts to help people as they consider their retirement savings and income planning. “We need to remind people to begin the process,” he said. “People are more likely to implement it when they have an action plan.” Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.
January 2020 » InsuranceNewsNet Magazine
43
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HEALTH/BENEFITSWIRES
QUOTABLE
Health Insurance Takes A Bigger Bite Out Of Income Working families are spending more
of their income on health care. Health insurance costs and deductibles have been growing faster than median income in all states over the past decade, The Commonwealth Fund reported. Employee premium contributions and deductibles exceeded 10% of median income in 42 states by 2018, according to the report. In Mississippi and Louisiana, the combined cost of premiums and deductibles accounted for 16% of household income — the largest share among the states. Nationwide, the average deductible for a middle-income family was 4.7% of income in 2018 — up from 2.7% in 2008. In 18 states, average deductibles were 5% or more of median income and as high as 6.7% in Mississippi. Workers’ premium contributions took nearly 7% of median income in 2018, up from 5% a decade earlier.
1 IN 5 CAN’T AFFORD PRESCRIPTIONS
It’s not only health care premiums and deductibles taking a bite out of consumers’ wallets. About 22% of U.S. adults said in November they have trouble affording their prescription drugs, a Gallup poll revealed. That’s an increase from 18.9% who reported having trouble paying for their drugs the previous year. President Donald Trump has proposed some steps toward lowering prescription drug prices, but no major action has taken place yet. The survey found the public is mostly negative toward Trump’s action on the issue, with 66% of adults saying he has done “not very much” or “nothing at all” to fight high drug prices. House Speaker Nancy Pelosi, D-Calif., is pushing a bill to allow the secretary of health and human services to negotiate lower prices on up to 250 drugs per year. Meanwhile, drug companies put the blame on insurers and pharmacy benefit managers, who they say are not passing discounts they receive on to consumers. DID YOU
KNOW
?
44
FEW SAY ‘MEDICARE FOR ALL’ WILL BE REALITY
Nearly half (48%) of Americans don’t believe “Medicare for All” will be implemented if a candidate who supports the health care proposal is elected president this year, an eHealth survey revealed. The survey showed Americans are sharply split on Medicare for All and on whether it might ever become reality. Less than one-third of the survey respondents (31%) said they think it is likely the proposal would become law if a candidate who supports it is elected in November. Although Americans are divided on Medicare for All, they are mostly in agreement on lowering prescription drug costs. Nearly 90% of respondents support government initiatives to negotiate directly with drug makers, while 74% support government initiatives to import drugs from outside the U.S.
The near-unanimous acknowledgement of what was formerly a taboo subject in the workplace shows that mental health is growing in importance for American employers. — Hector De La Torre, executive director of Transamerica Center for Health Studies
MILLENNIALS’ HEALTH IS DETERIORATING
Millennials’ health is deteriorating more rapidly than older generations’ did. This decline could have devastating effects on the economy, according to a report from Moody’s Analytics and the Blue Cross Blue Shield Association. Millennials not only suffer from higher rates of physical ailments, such as hypertension and high cholesterol, but they also have a higher incidence of behavioral health problems such as depression when compared with the generation before them. If the trend continues, millennials could have a shorter life expectancy than Generation X. These greater health needs could drive up health spending by 33% compared with Generation X, researchers estimated. If millennials suffer from a compromised ability to work, it could lead to higher unemployment rates and lower worker productivity. In a worst-case scenario, millennials could expect to lose more than $4,500 a year in per capita income compared with Generation X at the same age, according to the report. What’s causing this unhealthy trend? Economic prosperity and health are closely linked, and millennials are still recovering from the Great Recession, researchers said. Millennials also are especially vulnerable to substance abuse.
Florida leads the nation in the number of people enrolled in health insurance through healthcare.gov. Source: Associated Press
InsuranceNewsNet Magazine » January 2020
Source: Naples (Fla.) Daily News
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I-30239 02/15/19
HEALTH/BENEFITS
Tapping The Full Potential Of Association Benefit Plans Associations and affinity groups may have the solution for independent or part-time workers who don’t have access to workplace benefits. By Kevin Morgan
B
enefits play a valuable role in attracting and retaining top talent. And while some companies have introduced perks and benefits aimed at creating more modern and flexible work environments, a LinkedIn survey showed employees care most about core benefits, and that’s where employers need to focus. In the meantime, what options do workers have when their employer doesn’t offer those benefits? What about independent or part-time workers without access to corporate plans? Associations and affinity groups may have the solution. Medical and dental insurance, health reimbursement accounts, 401(k) plans, and some level of either voluntary or company-provided life, accidental death and dismemberment, and disability coverage are the minimum many employers will offer. And with the cost of health benefits alone estimated at $15,000 per employee in 2019, even the most profitable 46
companies may wish to consider carefully whether offering daily catered lunches and dinners, unlimited vacation days and pet-friendly office policies serve their employees’ most pressing needs. Considering the changing nature of our workforce, many individuals are looking elsewhere for supplemental coverage — an area of untapped opportunity for both associations and brokers.
The Value Of Associations
Associations face unique challenges; some have stagnant or declining membership and increased pressure to communicate value. One way they can offer more value to members is by offering a comprehensive suite of benefits, particularly financial wellness benefits. And this is where brokers can also add value — helping them identify and offer those benefits. The purchasing power of midsize to large employers can be most closely replicated by associations and affinity groups. This gives members access to a variety of benefits — both traditional and niche — that, if purchased on the retail market, would either create a huge financial burden or be out of reach altogether for many workers. By partnering with an experienced provider, associations can evaluate a wide range of traditional products
InsuranceNewsNet Magazine » January 2020
including life, disability, health, accident, critical illness, dental, professional liability, auto and home insurance. Brokers can help associations evaluate which product suite best serves their member base. They can also help association leaders pinpoint nontraditional products such as student loan repayment assistance, annuities or pet insurance, based on their current and desired member base. For members, the ability to purchase these benefits at group rates is a key enabler of financial wellness. For association leaders, it enhances member experience and increases the perceived value of the organization.
The Role Of Benefits Brokers
In addition to seamless delivery of service and modern technology platforms, the relevance of benefits throughout members’ life stages and to their unique circumstances must be carefully considered. However, offering these benefits is not always easy for associations. Many have limited time and resources and require a partner that understands their challenges and can help communicate value to members. Brokers and third-party administrators play key roles in this relationship, providing services that may include enrollment, record keeping and customer service support — seamlessly across multiple product providers.
TAPPING THE FULL POTENTIAL OF ASSOCIATION BENEFIT PLANS HEALTH/BENEFITS Here are four key ways brokers can establish and strengthen relationships with associations and affinity groups for mutually beneficial rewards.
1. Position Yourself As A Research Partner
To maximize the return on investment of an association’s benefits package, products must be tailored to the unmet needs of its membership. A great example of this is a recent collaboration among the American Institute of Certified Public Accountants, Aon and Prudential Group Insurance. AICPA sensed a need to better serve its members over age 50 and asked Prudential and Aon to explore product solutions specifically for this population. Through market research initiated by Aon, a demand for longevity risk solutions that provide guaranteed income for life and that protect against market fluctuations was identified.
2. Prioritize And Provide Education
Once you’ve collected member insights and pinpointed a clear benefit need, consider how to deliver all products and services through a financial wellness lens. This is essential to ensure members understand how available benefits fit into their current and future life stages and to encourage adoption. Articles, budgeting tools and benefit calculators can help attract and retain them. Aon and Prudential took their research a step further to develop an enrollment process that leverages personalized financial education and guidance through LINK by Prudential. Information on the platform helps AICPA members understand the effect of adding annuities to their personal retirement and longevity risk strategy, and also gives them the option of consulting further with a professional financial advisor. In addition, brokers, consultants and carriers have a unique opportunity to help underserved groups and design unique products by partnering with associations and affinity groups. Financial education is a vital resource for underserved populations and worker groups, including low- to moderate-income employees and gig workers, many of whom rely on associations for networking and career advancement.
Workers Want Benefits, Not Perks Gyms, game rooms and free food are nice, but workers said they really want their employers to provide paid time off, health coverage and parental leave.
SOURCE: LinkedIn Survey of Workplace Culture Trends, 2018
For example, a union member group of more than 2 million workers with a significant Hispanic membership recently implemented a financial wellness platform in both Spanish and English to help its members manage debt, learn about investing, balance day-to-day finances and plan for retirement — all areas the organization recognized as relevant to its member base.
3. Be Tech-Forward
To set up any benefits program for success, TPAs and providers should leverage data analytics and customer relationship management technology for easy adoption. For example, in certain instances, depending on demographic and risk elements, carriers can provide association members with coverage in real time using this type of technology. The AICPA and one of the largest state bar associations are two organizations that leverage Express Life approval, a simplified-issue process, making use of pharmaceutical data and digital enrollment tools to make the experience of obtaining coverage more streamlined and cost-efficient for their members. By working with providers and TPAs that offer these capabilities, shorter overall enrollment processes, and continuous investment in digital capabilities that simplify the underwriting process, brokers can help association clients make available to members the benefits most attractive to them.
4. Build Relationships
Though this market is ripe with opportunity, it’s still complicated and far less transactional than others in the group benefits space. Many of the associations that offer member benefits today have a long-standing relationship with a broker, and that comes with a tremendous amount of loyalty. To break through to this audience, you’ll need to develop the startup mindset. Don’t be afraid to prospect and find organizations that might be in your backyard, and work to build that loyalty from the ground up. In short, associations and affinity groups offer great potential for brokers. These organizations are hungry to innovate and communicate value to attract and retain membership. By thinking differently about your approach to selecting providers and product offerings — leading with research, providing necessary education and implementing easy-to-use technology — you’ll more effectively communicate overall return on investment and create long-lasting partnerships. Kevin Morgan is vice president, association and cross-business initiatives, Prudential Group Insurance. Kevin may be emailed at kevin.morgan@innfeedback.com.
January 2020 » InsuranceNewsNet Magazine
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Financial facts and figures powered by AdvisorNews.com
Schwab-TDA Merger Has RIAs Asset-Anxious
Small registered investment advisors that relied on low-cost, high-service asset custodians might be getting a little nervous about the pending Charles Schwab acquisition of TD Ameritrade. Even though the merger would make a new $5 trillion entity, Schwab will still be No. 3 in assets under management behind No. 1 BlackRock with $6.8 trillion and No. 2 Vanguard with $5.6 trillion. But what makes smaller
RIAs worried is the dwindling number of custodians such as TD Ameritrade which, while cheap, still offered a high level of advisor service. Schwab is certainly inexpensive, recently eliminating online trading fees, but the firm is not expected to offer the same level of service to the advisors with less than $100 million that TD Ameritrade catered to. Still, TD Ameritrade interim CEO Stephen Boyle said all will be good. “Together,” Boyle said, “we can deliver the ultimate client experience for retail investors and independent registered investment advisors.”
Shhh!
Families Are Mum About Money
Here is a candidate for a New Year’s resolution: Nearly everybody (93%) says it is important to set a plan for their family’s financial future, but less than half (47%) struggle to talk about it with loved ones, according to a Lincoln Financial poll. Other sad facts from the survey.
38% Did not talk to their partner
about each other’s financial situation before committing to a long-term relationship.
86% Do not feel
they have saved enough for retirement.
More Americans Say ‘Charge!’ $
444 Billion
Credit card balance carried from month to month, as of September 2019
6,849
1,162
$
$
Average credit card debt per household
↑6%
Increase in credit card debt over past year
Average annual interest per household
↑34%
Increase in credit card debt over five years
9%
Don’t think they will ever be able to pay it off
88% Do not know or do not feel
they have saved enough to protect themselves and their loved ones in the future.
Source: Nerd Wallet/Harris
$14.0 trillion TOTAL HOUSEHOLD DEBT
$12.0
CONSUMER CREDIT DEBT
$10.0 $8.0
Household Debt Up For 21 Quarters
$6.0 $4.0
The New York Fed reports that total household debt increased by $92 billion, or 0.7 percent, to $13.95 trillion in the third quarter of 2019. It was the 21st consecutive quarterly increase, and the total is now $1.3 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008.
$2.0 $0.0 1Q2005 48
1Q2010
InsuranceNewsNet Magazine » January 2020
Non-Housing Balances Consumer credit debt in the third quarter of 2019 stood at $9.44 trillion, a $31 billion increase from the previous quarter. Balances on home equity lines of credit have been declining since 2009, with this quarter’s decline of $3 billion bringing the total to $396 billion. Non-housing increased across the board by $64 billion in the third quarter, including $18 billion in auto loans, $13 billion in credit card balances, and $20 billion in student loans. 1Q2015
Source: FRBNY Consumer Credit Panel/Equifax
1Q2019
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10 Reasons Financial Advisors Choose To Go Independent Many advisors have indicated that becoming independent can create some initial anxiety from the perspective of transitioning one’s book of business. But that is not stopping them from taking the independent route. • Shad Besikof
A
lthough the registered investment advisor market is far more mature than it was 10 years ago, the space continues to experience significant growth and increased market share from large wirehouse and bank models. Let’s look at some statistics. The traditional wirehouse/bank advisor-managed asset channel market share has declined by 10% since 2007, according to the Cerulli Report on U.S. Advisor Metrics of 2017. There were 147 “breakaways” who transitioned to independence in 2018, which is a significant increase from the same period in 2017, according to Echelon’s RIA M&A Deal Report. In addition to the active breakaway market, there were 44 merger and acquisition transactions in the fourth quarter of 2018 alone, in which advisors were acquired by other RIAs. The movement to independence and advisors being acquired is surging. There are two main reasons for these phenomena: Most advisors are in their mid- to late-50s, looking to retire within the next five to 10 years and want to maximize enterprise value. Assets-undermanagement wealth is expected to rise from $63.9 trillion in 2017 to $101.7 trillion by 2020, according to PwC AWM Insights. Advisors want to have the freedom and flexibility to provide the best possible client experience as true fiduciaries and differentiate themselves in order to compete for more wallet share. With overall wealth increasing in the U.S., there will be continued demand for the services that independent advisors deliver. For those considering taking part in RIA market share growth and/or maximizing their succession plan with an eye 50
on ensuring that their clients are well taken care of, there are several compelling reasons to consider. It’s important to acknowledge, however, that many advisors have indicated that becoming independent can create some initial anxiety from the perspective of transitioning one’s book of business. In a 2018 Schwab Independent
2. Product offerings. Firms can be strict
regarding what investments are allowable. Striking out on your own allows you to choose which ventures and investments are offered to your clients, instead of being forced to offer only what your firm allows. 3. Growth by acquisition. You might be
interested in maximizing your new firm’s enterprise value through acquisitions of other teams and building your client base inorganically and quickly. This can be ne-
Assets-under-management wealth is expected to rise from $63.9 trillion in 2017 to $101.7 trillion by 2020. — PwC AWM Insights
Advisor Sophomore Study, “94% of independent advisors said the freedom to do what is best for their clients is the most important reason to go independent. In fact, on average, 87% of clients make the jump with advisors when they turn independent.” Outside of these facts, there are 10 common considerations for making a move. Ten reasons to consider advisor independence. For an advisor, once frustration weighs more heavily than passion, the reasons for leaving become clearer. In general, there are 10 issues a financial advisor should consider before pursuing independence: 1. The pride of owning your brand and defining your company culture.
Instead of being an employee of a larger company and adapting to that company's culture, choosing to go on your own allows you to create your own culture that can be passed on to the next generation of advisors.
InsuranceNewsNet Magazine » January 2020
gotiated in the open market as opposed to being offered a default retirement plan that may not maximize your financial outcome and legacy. 4.
Overly
restrictive
compliance.
Large firms are required to build their compliance programs around the entire universe of brokers that they oversee. They couldn’t possibly build a customized compliance program for, say, 15,000 advisors as this would be a daunting and cost-prohibitive task. If one bad apple spoils the bunch, then the firm must add new restrictions across all its advisors to manage to the lowest common denominator. The independent advisor can design a more customized compliance program to better serve the needs of their clients. This does not mean you don’t have to comply with SEC or FINRA rules. But it’s your policy, not the firm’s policy, that will allow you to operate as a true fiduciary to your client. There are plenty of excellent legal/compliance firms that specialize in
5 REASONS TO MERGE HEALTH CARE INTO RETIREMENT PLANNING
The Pros & Cons Of Going Independent The decision to go independent isn’t an easy one. Weigh the pros and cons carefully before making a decision.
Pros
+ Self-employed — No more restrictive policies! You can set your own schedule and pay scale. + Customization of business and products offered — You can now better serve your clients by picking and choosing the products and tools you provide. + Control of branding and marketing — The marketing and advertising strategies employed at large firms don’t really give much room for highlighting your unique value and expertise. Now, you are free to develop a niche and market in a way that represents you as an advisor.
Cons
• Stress of owning your own business — Going indie can be exciting. It can also be stressful as you consider the responsibility of making decisions for your practice.
the best client experience and allow you to operate efficiently. All the major custodians have integrated the best third-party technologies, so advisors can build a customized technology suite designed to maximize the experience for the specific types of clients they serve. 7. Restrictive covenants. Employers often change their poli-
cies, which can affect one’s livelihood. This change can include covenants that restrict an employee’s actions during and after employment. In some cases, it includes a “garden leave” clause whereby an advisor has to have left a firm for several months before having the ability to transition clients to the new independent firm. This can create tremendous anxiety, but it can be mitigated by leaving before this happens. Rather than sign the agreement, you might choose to move sooner rather than later so you can make your own rules. 8. Compensation and benefit changes. Firms can change their
compensation structure or benefits packages in order to add money to their bottom line. If your employer makes a change that benefits them and not you, such as forcing incentive compensation into long-term deferred stock or constantly changing your compensation “grid,” you might choose to create your own financial destiny by walking away. 9. Headline risk. Certain firms can develop reputations for ques-
tionable practices, which create “headline” risk. This can lead to events such as scandals and cause negative press for the firm. This could result in the perception of guilt by association. Starting on a pathway to independence might be the only step you think you can take to maintain a positive reputation with clients. • Startup costs — Starting your own business comes with startup costs like software and tech tools, office space, and more.
the RIA marketplace and can guide you on how to operate within the confines of SEC or FINRA rules, specifically to how you want to serve your clients. 5. Institutionalized marketing. Large financial services firms
control their marketing, social media and messaging efforts. That might mean you have very little voice in the message and brand that you’re looking to create. Pursuing your own independent advisory firm allows you to control marketing messages, and create a culture and brand that exemplifies your unique value proposition so that you don’t blend in with everyone else. This is increasingly becoming important in a highly competitive environment. 6. Ineffective software and tools. Employers often choose
software and systems based on cost and input from a few individuals. You might feel the tools provided by default have little to no utility. Instead, you want to find the products that provide
10. Maximizing revenues and enterprise value. As an RIA
or RIA/hybrid, you’ll receive 100% of your fee-based revenues and anywhere from 80%-90% for commission business. This is a far cry from being subject to a “grid” payout where you’ll be required to cross-sell other products to maximize the grid as opposed to properly serving clients in the open market as a fiduciary. In addition, you’ll be able to control your own profit and loss, which will help you maximize enterprise value when it’s time for a succession plan. Is Independent Advising The Right Decision? Any of the above reasons might be a tipping point at which your passion becomes greatly diminished by your frustration. However, owning and running a professional enterprise does not fit all personalities. There are certain traits that are associated with being successful as an entrepreneur, manager and technician all in one person. If you’re seeking to stay passionate about your work and dedicated to your clients and brand, your choice of transitioning to independence should be an easy one. Shad Besikof is president and chief operating officer of TruClarity Management Solutions. Shad may be contacted at shad.besikof@ innfeedback.com.
January 2020 » InsuranceNewsNet Magazine
51
INBALANCEWIRES
Should You Get A Sleep Divorce?
More Americans are interested in getting a divorce — not the kind where you split up and move out, but the kind where you and your partner sleep in separate beds or even separate rooms. Nearly one-third of those who responded to a survey by the website Mattress Clarity said they are open to getting a sleep divorce. In a related survey, 19% of respondents said their partner is the reason for their poor sleep. Why do people want to sleep apart from their significant other? Snoring is the main reason, said Dr. Carolyn Dean, author and founder of RnA ReSet. Other factors leading to sleep divorce include different room temperature or bedding preferences, and conflicting work schedules. A sleep divorce comes with some major potential benefits, Dean said. They include sleeping more soundly and experiencing fewer disruptions to your sleep cycle, such as less waking in the middle of the night and less trouble falling back to sleep. And all these benefits lead to better health overall.
ONLY CHILDREN MORE LIKELY TO BE OBESE
Only children may be at higher risk of obesity than children who have siblings, according to a study published in the Journal of Nutrition Education and Behavior. The study looked at the eating habits and body weight of only children and found they had less healthy eating habits and beverage choices than families with multiple children. The lead author of the study said the differences in planning and organization required in households with multiple children is a major factor in the study findings. “With multiple children, you're scheduling a little bit more of your meals. So we're going to have more at-home meals. We're probably going to have less fast food,” said Chelsea Kracht, a researcher at Louisiana State University. Another theory is that only children may be more at risk for obesity because there is more food to go around in their households, and they may be less active because they don’t have another child
in their home to play with, said Natalie Muth, who chairs the American Academy of Pediatrics Section on Obesity.
WHY YOU STILL HATE VEGETABLES
Do you stick your nose up at broccoli or gag at the thought of eating brussels sprouts? Blame it on your genes. A specific gene makes certain compounds taste bitter, which may make it harder for some people to add vegetables to their diet, according to research presented at an American Heart Association meeting. Everyone inherits two copies of a taste gene called TAS2R38. People who inherit two copies of the variant called AVI aren’t sensitive to bitter tastes from certain chemicals. Those with one copy of AVI and another called PAV perceive those bitter tastes. But individuals with two copies of PAV, often called
DID YOU
KNOW 37% of Americans said they plan to skip the flu vaccine this winter. Source: University of Chicago survey
?
52
InsuranceNewsNet Magazine » January 2020
QUOTABLE Loneliness in this country shaves about eight years off your life expectancy.” — Dan Buettner, author of The Blue Zones Cookbook
“super-tasters,” find the same foods exceptionally bitter. These people are likely to find broccoli, brussels sprouts and cabbage a “ruin-your-day” level of bitter. Researchers found that those who have the PAV form of the gene were two and a half times less likely to eat vegetables than those who don’t.
EVENING EATING = POOR HEART HEALTH
Women who indulge in those late-night feeding frenzies are putting their hearts at risk. That’s the word from Go Red for Women. Researchers found women who eat the majority of the day’s calories after 6 p.m. had poorer heart health than those who ate mainly during the daytime. Even worse, heart health declined with every 1% increase in calories consumed in the evening hours. Women who consumed more of their calories after 6 p.m. were more likely to have higher blood pressure, higher body mass index and poorer long-term control of blood sugar, the research found. “These preliminary results indicate that intentional eating that is mindful of the timing and proportion of calories in evening meals may represent a simple, modifiable behavior that can help lower heart disease risk,” said Dr. Nour Makarem, an associate research scientist at Columbia University.
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INBALANCE
I’m goingd. back to be
Don't Be A Bear: How To Get Out Of Your Cave This Winter It’s tempting to retreat to a cave when the cold weather hits, but maintaining healthy habits in winter will yield benefits the rest of the year. By Bryce Sanders
C
onsider bears. They eat a lot in the autumn — up to 20,000 calories daily, gaining three pounds a day! This is followed by lying still for several months over the winter. Although bears don’t technically hibernate, they remain in a reduced metabolic state for several months. This may be fine if you live in Yellowstone National Park, but you have a job, a career and a family. How can you be less bearlike and vault into spring healthy and energetic? A large amount of winter wellness is common sense. Along with planning for retirement and sales goals, it makes sense for everyone to also have a plan for winter wellness. 54
Eating
Back to those bears who are consuming about 20,000 c a l o r i e s a d a y. We all go on eating binges between Thanksgiving and New Year’s Day. That’s about five weeks! We attend holiday parties. We have dinner with friends. We drink more than usual. We need to eat smarter. The website Pinnaclehealth.org shares many food-related tips for winter wellness. A key rule is to dispense with comfort foods and focus on foods that are good for your body during the cold winter months. They suggest starting with a breakfast packed with protein. Seven ounces of Greek yogurt have about 20 grams of protein. How about cottage cheese instead? Half a cup has 14 grams, the same as two ounces of turkey sausage. Prefer eggs? Two large ones have 13 grams. Vegan options such as quinoa, tofu, tempeh and nut butters also pack a protein punch. If you are feeling a slump when the
InsuranceNewsNet Magazine » January 2020
afternoon rolls around, have some lowfat, healthy snacks nearby. Examples are apple slices with peanut butter, hardboiled eggs or roasted almonds with dried cherries. The folks at Pinnacle Health also suggest foods that contain omega-3 fatty acids. If you are already a fan of salmon and tuna, eat more of them. Seeds and nuts are another good source. Did I mention pumpkin seeds as an afternoon snack? Many of the foods we associate with fall and winter supplement your diet and promote winter wellness. Mushrooms, an ideal cooking ingredient, contain natural antibiotics. Mushrooms can boost your immune system. Carrots are a traditional root vegetable. Spinach, kale and Swiss chard add healthy nutrients to your diet. Add more soluble fiber to your diet. Apples, oats and nuts are great sources. They also fit into the rhythm of the season. Oatmeal is an ideal winter breakfast food. Soluble fiber has three things going for it: It reduces cholesterol, aids in weight loss and helps protect against diabetes.
DON'T BE A BEAR: HOW TO GET OUT OF YOUR CAVE THIS WINTER INBALANCE
Dietary Supplements
Sometimes, we need a little help. Vitamin C is an excellent antioxidant. You get vitamin C from eating oranges. At 100 mg of vitamin C in each orange, you would need to eat five a day to get the same amount you would get from taking one 500 mg tablet. Winter means less sunlight. Dec. 21 is the shortest day of the year. In the Northeast, we get about nine hours of sunlight on that day. On the longest day, usually June 21, we get about 17 hours of sunlight. Sunlight provides vitamin D. It’s obvious we are getting less vitamin D in the winter, coupled with the obvious fact we stay indoors most of the time. We need more vitamin D. That’s another supplement to consider taking to stay healthy. Every runner and every gym rat knows we are supposed to stay hydrated. This counts for wintertime, too. Drink more water.
Exercise
I t ’s t e m p t i n g t o b e c o m e a c o uc h potato during the winter. If you have an exercise routine, keep it up. If not, get one started. It’s an excellent New Year’s resolution. Most people should get at least 30 minutes of exercise every day. You have several options for winter exercising. Exercising outdoors keeps you away from other people’s germs at least part of the day. You might run. You might belong to a boot camp group. Generally speaking, there’s not a lot of expense connected with outdoor exercise. Get a workout buddy and plan to get to the gym regularly. Personally, I’m a 5:30 a.m. guy. It gets it out of the way. When you have a partner for working out, it gives you more accountability to showing up. When you are part of a group of regulars, you encourage each other. Pinnacle Health suggests planning your week’s worth of workouts in advance on Sunday. This way, you aren’t turning up at the gym, wondering “What should I do today?” and strolling at a leisurely pace on the treadmill.
Every runner and every gym rat knows we are supposed to stay hydrated. This counts for wintertime, too. Drink more water. There are days when you don’t want to go to the gym. It’s dark, rainy and icy outside. You want to stay home. These are times when getting on the exercise bike makes sense. Doesn’t everyone have one? If not, a quick internet search will show you plenty of exercises you can do at home without exercise equipment. Many of us gym regulars get in, do our workouts and leave. The object is to get sweaty because it helps your body detoxify. There are a couple more options you’ve likely overlooked. Many gyms have a sauna and a steam room. That gets you sweating. It opens the pores. It also relaxes tense muscles. Everyone knows we shouldn’t overdo exercise. Most people I know at the gym listen to their bodies. They know when to rest or when they’ve been doing too much. Then eight inches of snow gets deposited in your driveway. You say, “I’ll get out there and shovel it now.” Snow shoveling increases your blood pressure and heart rate. Meanwhile, the cold air is causing constriction of blood vessels and decreasing oxygen to your heart. Yes, this is a recipe for a heart attack. The snow may need to be shoveled, but listen to your body and know your limitations. Sometimes clearing snow can be like shoveling feathers. Trying to move wet snow is like shoveling cement.
General Wellness
If you have taken a cruise recently, you know the ship’s staff gets you to clean your hands with disinfectant at every opportunity. This makes sense when you are home, too. Wash your hands regularly. Assuming someone has a cold, they are likely spreading germs when they touch doorknobs. If your child attends elementary school or a
day care center, there’s the risk of germs coming home with them. There’s only a limited amount you can do about this, but washing your hands frequently is a good step toward fighting illness. Back to those bears in Yellowstone. It’s tempting to change your rhythm, going to sleep when the sun goes down. In late December, if you slept from sundown to sunrise, you would be sleeping 15 hours! Try to keep to your regular sleep schedule, getting the seven or eight hours of sleep your body wants. You might be getting up in the dark, but your body will appreciate being kept on a schedule. It’s easy to get depressed in the wintertime. It’s good to have something fun on the horizon. Pinnacle Health suggests winter is a good time to research the vacation you plan to take later in the year. It gives you something to look forward to! Most people put lots of effort into organizing holidays. It’s been said people spend more time planning a two-week vacation than they do planning for their own retirement. It’s your job to help people like that. That’s why you need to stay healthy during the winter. Bryce Sanders is president of Perceptive Business Solutions, New Hope, Pa. He provides high net worth client acquisition training for the financial services industry. He is the author of Captivating The Wealthy Investor. Bryce may be contacted at bryce.sanders@innfeedback.com.
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January 2020 » InsuranceNewsNet Magazine
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BUSINESS
Digital Marketing: Use A Vendor Or Do The Work In-House? You can do your own digital marketing, but it’s not always as easy as it looks.
some are even considering using their internal team members to help them run the campaigns in-house.
By Chris Hooper
The Digital Agency Experience
U
sing social media to promote retirement income planning seminars and workshops has become the next big thing for insurance and financial professionals. A few years ago, direct mail was the most effective way to attract people to prospecting events, but that’s no longer the case. Several digital vendors have emerged and they have proven that digital marketing can compete with, and often outperform, mailers. In fact, these digital agencies have done so well that many mail houses are scrambling to compete. As recently as three years ago, most of the prospecting events I worked on were promoted entirely through direct mail. Now, more than 80% of these campaigns are purely digital. While the mail houses are now struggling to compete in a digital landscape, I’ve found that most agents and advisors I speak with are becoming well-versed in digital marketing. Many have tried working with purely digital vendors, some tried working with mail houses that mix in digital ads, and 56
If your practice is new to digital marketing, I would suggest finding one of the many vendors who specialize in using Facebook advertising to generate event registrations. Most have figured out how to quickly and easily set up campaigns that will attract high-value prospects and get them registered for these events. The vendor will design your ads, build the landing pages and set up everything so that you can sit back and watch the registrations pour in. They will make it easy on you. But this comes at a cost — while these campaigns are often less expensive than direct mail, they still aren’t cheap. Agents and advisors should expect to pay upwards of $2,500 per event. Clients often ask me, “Why should I pay an outside agency to run my digital marketing campaigns? Can’t I just do it myself?” I answer, “You can, but be careful. It’s not always as easy as it looks.”
There Is A Learning Curve
Event promotion can seem overwhelming if you’re trying to tackle it all at once. With all of the different ways there are to
InsuranceNewsNet Magazine » January 2020
market your event, it’s hard to even know where to start. Sure, anyone can get into Facebook Ads Manager and set up a new campaign, but there is definitely a learning curve to getting it right. In-house advertisers need to master concepts like setting up and managing the Facebook pixel, creating look-alike audiences and monitoring multiple ad sets for optimal performance. Often, they find success running these ads, but only after several failed and expensive attempts. There are three important things to consider before taking your digital campaigns in-house. First, do you have staff available to build, manage and maintain your campaigns? And are they properly trained? Getting these campaigns to work correctly takes time, money and dedication. You will definitely need a team member who can spend a significant portion of their time, or maybe even all of their time, on managing this process. And if you plan on using someone who is already on your staff, consider how much of their time this will take away from their other essential responsibilities. Second, do you have the tools in place to run these campaigns? In addition to understanding the Facebook Ads Manager tool, you will need a plan for building and hosting custom landing pages, sending out automated confirmation and
USE A VENDOR OR DO THE WORK IN-HOUSE? BUSINESS reminder emails, and perhaps even setting up SMS text reminders for everyone who registers. You will also need to set up a customer relationship management system to manage the overall workflow of each campaign. Each of these components is important. Imagine if your campaign generates several dozen leads, but you don’t build in an automated system to remind people why it’s important for them to show up. You could generate lots of registrations, but end up with disappointingly low attendance at the actual event. Third, you will be responsible for making sure that every piece of the campaign is properly reviewed and approved for compliance. This is essential. Every one of the ads, landing pages, emails and texts must be compliant; otherwise, you add unnecessary risk to your practice. Advisors who work with a broker/dealer should be able to send all of the materials to their compliance officer for review, but if the presenter is a registered investment advisor or an insurance-only producer, compliance approval may be a challenge.
What Comes Next? A Hybrid Approach
Demand from insurance professionals for increased efficiency and control over digital marketing campaigns is now causing several independent marketing organizations to consider providing better, more efficient solutions for the agents they represent. These agents may not have the internal staff or expertise they would need to run these campaigns effectively, but they are also not thrilled with paying the steadily increasing rates that the outside vendors are charging. Because of this demand, a new model is being considered by marketing organizations as a way of providing a best-of-bothworlds solution. Like any third-party vendor, a digital agency bases its pricing on three things: » The cost of online advertising or ad spend » Overhead » Profit margins But IMOs that take on this work with their internal marketing teams can choose to
THIS
IS WHERE DEALS GET charge only for ad spend, instead of being concerned with overhead or profits. Because IMOs benefit more by helping clients grow their business than from charging fees for services, they can justify billing their agents only the cost of ad spend, without any markup. This serves as a huge advantage for independent insurance agents, who will no longer have to manage the campaigns themselves, but also won’t have to pay for an outside agency’s markups. In essence, if agents order a $2,500 digital campaign through an outside agency, they can probably expect no more than two-thirds of that budget to go toward ad spend. Instead, if they partner with their IMO to run the campaign under this new approach, the full $2,500 would be spent on ads, greatly increasing the results of the campaign. In addition, some IMOs will assist with compliance review, limiting the amount of risk the presenter is exposed to. As IMOs continue to develop this hybrid model for their clients, expect the digital marketing space to become more crowded and competitive over the next 12 to 24 months. This will certainly give insurance professionals more choices and better options for promoting their services. Chris Hooper is director of seminar services with M&O Marketing, Southfield, Mich. He has 25 years of experience in event management and digital marketing. Chris may be contacted at chris.hooper@innfeedback.com.
January 2020 » InsuranceNewsNet Magazine
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INSIGHTS
How Charity Gave My Practice A New Vision One advisor’s story of how giving the gift of sight became a focal point of his business. By Justin Nabity
A
fter marrying into a family of doctors and founding a physician-focused financial practice, I had the opportunity to work day in and day out with dedicated, selfless caregivers. Witnessing their generosity, I was posed with a nagging question: Am I taking more than I am giving? The journey to answer this question reframed my practice’s mission, inspired the creation of a 501(c)(3) nonprofit and
donate a portion of our business profits to provide vision care to those who live in underserved areas. As the cause generated more and more interest from our business community, we decided to expand our network of supporters and donors by developing the Give Sight wellness app. The Give Sight mobile app tracks users’ workout data and matches every 120 calories burned with a $1 donation from corporate sponsors, including our financial practice. Along with our advisory group, numerous organizations have adopted the app as an employee wellness initiative and charitable giving tool. Now, we have set an ambitious 10-year goal for Give Sight Global: to fund enough vision restoration for 1 million people. The Give
their efforts feels, beyond a mere dollar amount, the more meaningful the work will be. The strategy of Give Sight Global hinges on the number of people we assist, which can be applied to any cause: the number of meals provided, the number of children for whom you’ve sponsored schooling, the number of water wells constructed, etc.
Purpose-Driven Teams Perform
Contributions to a worthy cause do not have to be a sacrifice for your business. Rather than overshadowing the work of advising or undermining our profitability, our team’s philanthropic mission does the exact opposite. Establishing an ambitious charitable goal can help you focus your goals, energize your team and enhance your workplace culture. Initiatives can also be positive differentiators for prospective clients and new hires. As an advisor, you build trust with clients by establishing who you are and what motivates you beyond financial gain. Sustained charitable
Establishing an ambitious charitable goal can help you focus your goals, energize your team and enhance your workplace culture. convinced me that charitable giving can be a powerful driving force behind our professional goals as advisors. As your business succeeds, ask yourself who succeeds with it. By creating strong charitable initiatives within our organizations, we can transform the impact of our professional achievements.
The Give Sight Global Story
My mission to give back developed into the nonprofit organization Give Sight Global, a charity that sponsors eyeglasses and cataract surgeries all over the world. After volunteering with the University of Utah Moran Eye Center Outreach in Tanzania and the Navajo Nation alongside a client, I learned about the tragic effects of lack of vision care, which led to more than 1 billion cases of curable blindness worldwide. Initially, my business partner and I founded Give Sight Global as a charity to 58
Sight app maintains its momentum by allowing users to directly partake in their company’s charitable efforts.
Create A Companywide Mission
The words “business” and “philanthropy” might bring to mind the image of a CEO handing a giant check to charity. Although donating to a good cause is always worthwhile, this model of philanthropy usually fails to engage the average employee. When your team has no stake in a charitable goal, all the donations in the world will not affect the culture of your practice. If you want to make charity a central focus of your practice, instead of an afterthought, it is critical that everyone in your organization feel involved in the mission. Each member of your team should be able to connect their personal or professional achievements to the larger goal. In addition, the more tangible the impact of
InsuranceNewsNet Magazine » January 2020
efforts can illustrate your values as a company and motivate and unify your team. Although I encourage all advisors to think big when it comes to philanthropic initiatives, you don’t have to transform your business overnight. Take small steps to expand the impact of your business and explore the skills, connections and resources that your network has to offer. By investing in the betterment of your community — local or global — you can pursue professional success while advancing the public good. Justin Nabity, CFP, CLU, CHFC, is the founder and CEO of the financial advisory firm Physicians Thrive in Omaha, Neb. He also cofounded the nonprofit Give Sight Global. He is a 7-year MDRT member. Justin may be contacted at justin.nabity@innfeedback.com.
INSIGHTS
Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.
Overcoming DI Sales Objections Converts To Sales Agreements There are numerous reasons consumers don’t buy disability insurance, mostly because they were never asked. By Thomas C.K. Wong
T
here are myriad objections to buying DI, but the No. 1 reason people don’t buy it is they were never asked to buy. The common objections to buying disability insurance involve some combination of the following: » Cost versus benefit. » The product (it’s too technical or it’s hard to understand). » The competition. » No need for or belief in the product. » Trust. » Procrastination. » The application/underwriting process. » “My spouse works” or “My family will take care of me.” » The mindset of “I have other sources of income such as group short-term/longterm disability, Social Security, workers’ compensation or personal assets that can help me during the crisis.” I may have missed a few, but you get the point that there are many objections that can derail the buying decision. In order to overcome this, I believe it all starts with us — the agents. Our understanding of today’s buyers, the words we use to convey the importance of DI, the buyers’ perception of us and the value of our work all play an integral part in the DI buying decision. Although consumers have information readily available for them to do research, and technology allows consumers to do business more easily and more quickly, the need for income protection is as important now as it ever was. Young people don’t want to be sold (no one does at any age), but this is a perception problem until we demonstrate
enough of a difference to change it.
Overcoming Objections
Here are some recommendations for changing objections to agreements. Start with the “why.” This is not why consumers need DI, but rather what is their why? Why do they get up every morning to go to work? Most do it in order to pay for their living expenses and to achieve hopes and dreams for themselves and their loved ones. We trade a very valuable commodity called time for a paycheck. But what if there is a break or an interruption in someone’s working years? Think of a word that would describe how they would feel from an emotional and a financial standpoint. This leads me to your why. We can change those terrible words or feelings to hope by delivering monthly checks because we planned for it. Another common consumer objection is the belief that a disability would never happen to them or, if it were to happen, it would be from an accident. The use of words and storytelling is very important in this instance. I never use the word “disabled”; instead, I use the words “sick” or “hurt.” I ask prospects whether they know of someone with a bad back or a heart condition, or if they know someone who is battling cancer. Everyone would quickly admit that they know someone in one of those situations, but, I ask, what if it happened to you? What sources of income can you count on to pay for your monthly expenses? Most will respond that they have coverage at work and/or Social Security benefits. I then take an inventory of the expected dollars coming in and review their employee benefits booklet and their Social Security statement. These will let me know what is covered, how much, the
integration of Social Security and employer plans, and when and how long it will pay. By helping clients identify dollars up front and not after the event, advisors can prevent more stress and surprises. Finally, in everyone’s mind, are the questions “How much is it going to cost, and how much do I need?” DI does two jobs: It provides a monthly income and it preserves assets. If you don’t have the money to meet monthly expenses, those expenses will have to be paid somehow. If you have assets, they will be depleted quickly. So, getting your clients to own DI is a priority. Although I am an advocate for maximum income protection, having something is better than having nothing. Your client is the best judge of assessing the need and the ability to pay. They can always add more coverage, exercising their medical insurability options, or they can purchase more as they earn more. Now we come to the cost issue. If you paid premiums and never collected, it would be a small financial setback, but if you need the benefits and don’t have them, you could lose almost everything. It all boils down to two certainties: You either pay premiums to transfer the risk or you pay in losses by retaining it. You can’t afford the latter. Despite the many client objections to buying DI, there are many reasons why they need coverage. So, please give everyone a chance to consider purchasing DI, and change client objection to agreement.
You either pay premiums to transfer the risk, or you pay in losses by retaining it. You can’t afford the latter.
Thomas C.K. Wong, RHU, works closely with Guardian Life’s distribution system to promote the sale of individual and business DI products. Thomas may be contacted at thomas. wong@innfeedback.com.
January 2020 » InsuranceNewsNet Magazine
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More than 850 financial services companies in more than 70 countries turn to LIMRA first to help them build their businesses and improve their performance.
INSIGHTS
Fraudsters Eyeing Life Insurance And Retirement Accounts While companies have become wise to these criminals’ tactics, they expect the incidence of fraud in life insurance and retirement accounts to grow substantially in the coming years. By Russ Anderson
T
echnology has opened up so many opportunities to improve how we live, work and communicate. It is hard to imagine going back to a time without mobile devices, social media, online banking or email. But with all of these technological advances we have also opened up greater exposure for criminals to access our personal information, which has resulted in a higher incidence of fraud. According to LIMRA research, eight in 10 consumers are concerned about becoming a victim of fraud. In fact, this isn’t an unwarranted concern. More than a third (36%) of consumers have been a victim of financial fraud at least once and 64% of these events have occurred within the past five years. Regular and constant data breaches at private and public institutions alike have made millions if not hundreds of millions of consumers’ personal and public information readily available to anyone interested in impersonating them. As a result of these breaches, criminals have easy access to some amount of everyone’s personal and private data including their names, Social Security numbers, dates of birth, addresses, and even user names and passwords. In addition, criminals can buy information on the dark web, allowing them to steal people’s identities and leverage that information for nefarious purposes. Criminals also make use of email campaigns that tempt unsuspecting victims to click on malicious links or attachments, providing access to consumers' computers and emails. Once they have access to your computer and email, they can access whatever 60
you have stored there, such Consumers Are Primarily Concerned With High-Touch Accounts as financial statements Credit card 42% 41% 14% 3% and email correspondence Bank account 28% 44% 25% 3% with your advisors and/or financial institutions. They Brokerage account 20% 39% 39% 2% can even install software IRAs 21% 32% 42% 5% to record all the websites 37% 40% 7% accessed, including user Workplace retirement plan 16% names, passwords and seCash-value life insurance 20% 32% 38% 10% curity questions. Annuities 18% 26% 44% 12% Until 2017, most finanVery concerned Somewhat concerned Not very concerned Not at all concerned cial criminal activity targeted banking institutions and credit cards. But the LIMRA Secure and financial institutions’ websites, fraudRetirement Institute reported in its analy- sters often contact companies one by one sis of a federal consumer survey that with until they find one that has the accounts more than $42 trillion in investible assets of the individual they wish to impersonate. in the U.S., criminals have turned their at- Through this process, however, they leave tention to life insurance and retirement ac- a footprint of their own — IP addresses, counts, attempting to drain life insurance phone numbers, etc. can be tracked and and retirement savings plans of the assets shared to thwart future attempts. of unsuspecting consumers. According to ThreatMetrix, 10 new account takeover The Neighborhood Watch For attempts occur each second, which is Financial Services the fastest-growing risk to U.S. financial LIMRA and LOMA worked with 10 leading services companies. Overall, attack rates insurance companies to create a platform have grown 81% year over year, and 211% to allow financial institutions to warn each for mobile transactions. other when a criminal attempts to frauduCompanies were ill-prepared for the lently access life insurance and retirement sudden and unexpected attacks launched accounts. FraudShare allows participating by criminals who had all the information companies to share the information assothey needed to impersonate their cus- ciated with fraudsters and their attacks to tomers and initiate disbursements. While help companies identify when a call, a fax, companies have become wise to these an online interaction or a requested disfraudsters’ tactics, LIMRA research shows bursement was initiated. companies expect the incidence of fraud The tool is a fraud information clearingin life insurance and retirement accounts house and alert system that allows compato grow substantially in the coming years. nies to better protect themselves against This type of fraud not only has a fi- fraud while providing industry-level renancial impact but also undermines porting of account takeover activity. consumers’ trust in our financial instituWe believe our industions. Companies understand they need try is stronger when we to work together to fight this scourge on work together to protect our society. our customers. When we studied this issue, we found that criminals don’t always know which Russ Anderson joined LL financial institutions hold the accounts Global, the parent company of LIMRA and LOMA, in 2019, and heads its associated with the identities they have fraud prevention program. Russ may be constolen. Using easy-to-access 800 numbers tacted at russ.anderson@innfeedback.com.
InsuranceNewsNet Magazine » January 2020
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