InsuranceNewsNet Magazine - August 2021 by InsuranceNewsNet

THE SUMMER INSPIRATION ISSUE

How those who found success in the industry are inspired to mentor others PAGE 20

Growing up around the greats of the insurance industry PAGE 10

Financial empowerment for women is always in fashion PAGE 16

August 2021

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IN THIS ISSUE

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AUGUST 2021 » VOLUME 14, NUMBER 8

HEALTH/BENEFITS

FEATURE

Paying It Forward

By Susan Rupe Mentorship and peer-to-peer learning are a large part of an advisor’s education. How some are inspired to share their experiences with others.

20 INFRONT

IN THE FIELD

6 Regulators Finding Ways To Help Insurers With Old Blocks

16 The Financially Savvy Fashionista

By John Hilton Momentum quietly continues to gather for laws governing runoff and closed books of insurance business — while critics remain concerned that policyholders could be the big losers.

By Susan Rupe Zaneilia Harris is the creator of the Savvy Women Investors Circle and wants to help women overcome the wage gap and achieve the success they deserve.

LIFE

30 The Impact Of Genetic Testing On Life Insurance Coverage By Adrienne Wilson Knowledge is power when it comes to genetics, but it can affect a client’s ability to obtain life insurance at a competitive rate.

INTERVIEW

8 Attitude Is Everything

When Robert Miller started in the life insurance industry, he was told he didn’t have the “aptitude to succeed.” In this interview with Publisher Paul Feldman, Miller describes how he made it to the top and how the giants of the industry inspired him.

online

www.insurancenewsnetmagazine.com

ANNUITY

34 H ow FIAs Can Ease 3 Retirement Risks By Susan Rupe Conversion of retirement savings to retirement income may be a difficult concept for advisors as well as for clients.

38 Tailor A Disability Plan To Your Client’s Needs And Budget By Jill Frohardt The right disability insurance policy can give your client the protection they need without breaking the bank.

ADVISORNEWS

42 Black Americans Show High Levels Of Financial Well-Being By Susan Rupe A study showed Black Americans make up a disproportionate percentage of lower-income groups but have higher financial well-being scores than the general population.

INBALANCE

46 Sleeplessness Carries High Price For Businesses, Individuals By John Hilton Lack of sleep is detrimental to both physical and mental health. How to make sure you get those 40 winks every night.

BUSINESS

48 3 Simple Steps To Creating Lasting Relationships By Stephen Kagawa Being intentionally present for clients will open the door to a relationship built on trust.

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InsuranceNewsNet Magazine » August 2021

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WELCOME LETTER FROM THE EDITOR

Mentorship: Another Way Of Saying ‘You’ve Got This!’

my needed some advice. So she messaged me on one of my social media channels. “Could I get your opinion on something?” she asked. Of course, my answer was yes. I had hired Amy as my assistant 25 years ago when I was editor/general manager of a weekly newspaper in a rural Pennsylvania town. Amy was creative and talented, eager to learn, and had an amazing work ethic. Amy never backed down from an assignment and rarely complained about having to work long hours. She was good at the things I wasn’t, and I thought we made a great team. Amy is 14 years younger than I am, so it would be only natural that I would take on the role of mentor to her. But I didn’t do it. It never occurred to me to add mentoring to all the other tasks that came with my job and had me overwhelmed during the five years I worked at it. I was so consumed with slogging through every day — keeping up with deadlines, helping my staff with their needs while keeping the corporate owners off my back, representing the newspaper in public, and making sure we turned a profit. Add my home and family responsibilities on top of that, and mentoring was knocked completely off my priority list. And I hadn’t experienced much in the way of mentoring during my newspaper career either. Early on, I worked for editors who found fault with everything I wrote and who humiliated their reporters on a daily basis. This wasn’t mentoring — this was more like hazing. The prevailing attitude was, “I had a tough time getting started in this business, so you should too.” Years later, when I moved to the association world, mentoring was part of the environment. I was lucky to work for an executive vice president who introduced me to the right people, made sure I had all the tools I needed in order to be successful and asked me every day whether 4

I was OK. And our board members also took time to educate me on the issues that were important to our members, and they looked out for me personally. When I worked for an insurance agents’ association, I was impressed with the amount of mentoring that occurs in the industry. I met so many agents who volunteered their time to teach LUTCF classes or other continuing education courses. Programs such as NAIFA’s Leadership in Life Institute brought mentorship into the organization’s fabric. Advisors reached out to recruit others into the business and help them to be successful in it. The financial services industry is a tough one to break into, but unlike in the newspaper business, the prevailing attitude is frequently, “I had a tough time getting started in this business, but I want you to have an easier time of it and I will help you be successful.” Our August issue’s theme traditionally has been inspiration. This year, we looked at those who are inspired to mentor others in the industry. I had so many stories of mentorship to tell, it was impossible to include all of them in the magazine. So please go to innmb.com/payitforward for more examples of those who are inspired to help others. Which brings me back to Amy.

InsuranceNewsNet Magazine » August 2021

Amy recently became the editor-in-chief of a weekly newspaper similar to the one where we worked together decades ago. The owner wanted her to make some changes to the newspaper’s layout. She wasn’t sure how she should approach her staff about implementing those changes, and she wanted some advice. I suggested she tell the staff the reasoning behind the changes and how the changes will make the newspaper better. I also noted that “you know someone will always have something to say when you make a change.” Then I reassured her that she knows how to be diplomatic and still make things work. She messaged me back less than an hour later. She described how she presented the changes to her staff and offered to help anyone who needed assistance in making those changes. “It went better than I anticipated!” she wrote. “You’ve got this! I’m here for you anytime,” I replied. I guess I was a mentor to her after all. Susan Rupe Managing Editor

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INFRONT

Regulators Finding Ways To Help Insurers With Old Blocks Insurers reportedly have more than $420 billion worth of annuity, life insurance, long-term care and other liabilities designated as “run-off” business. By John Hilton

omentum quietly continues to gather for laws governing run-off and closed books of insurance business — while critics remain concerned that policyholders could be the big losers. Regulators are focused on two options for discontinued books of business: insurance business transfer laws, or the more arcane “division” framework. No one is doubting the need for some action. Moody’s has estimated that life insurers have more than $420 billion worth of annuity, life insurance, long-term care and other liabilities publicly designated as “legacy” or “run-off” that are targeted for exit transactions. The insurance industry has struggled for decades with how to handle discontinued blocks of business. The Association of Insurance & Reinsurance Run-Off Companies formed in 2004 to give insurers a forum for addressing the issues. Insurers are especially keen these days to move on from old books of business, as ultra-low interest rates continue to make profit goals elusive. That pressure to split off divisions and be rid of old 6

books of business is pressuring regulators to act on guidelines.

‘Pent-Up Demand’

One of the historic problems with selling off a piece of an insurance company is that it requires every policyholder’s signature. “As you might imagine, that never happens,” joked Glen Mulready, Oklahoma insurance commissioner, during the Global Insurance Symposium earlier this summer. Oklahoma took bold action in 2018, becoming the second state after Rhode Island to pass an insurance business transfer law. The main difference is the Oklahoma law covers all lines of insurance. The Oklahoma process closely mirrors a business transfer law passed in the United Kingdom, which has resulted in more than 300 successful transfers during the past 20 years, the Oklahoma Insurance Department said. While IBT plans do not require individual policyholder consent, an independent expert reviews all plans, along with the commissioner and OID staff. In what OID calls the first IBT deal in the United States, Providence Washington Insurance Co. transferred all its insurance and reinsurance business, as well as $38.5 million, to Yosemite Insurance, an Oklahoma insurance company. Both PWIC and Yosemite are wholly owned subsidiaries of Enstar Group Limited.

InsuranceNewsNet Magazine » August 2021

That deal was approved by an Oklahoma court in September, and more deals are expected, Mulready said, emphasizing that policyholders are protected and businesses can thrive. “There’s a lot of pent-up demand,” he explained. “There were policies in that first transaction where they hadn’t sold those policies in 40 years. So it allows them to sell those off and reactivate their capital for areas they are focused on.” On April 29, Arkansas Gov. Asa Hutchison signed the Arkansas Insurance Business Transfer Act. It is based on the Oklahoma statute, and the NCOIL Insurance Business Transfer Model Act approved in March 2020.

White Paper Coming

The National Association of Insurance Commissioners also has the IBT issue on its radar. The NAIC formed the Restructuring Mechanisms Working Group in 2018 to review “the perceived need for restructuring statutes and the issues those statutes are designed to remedy and also to consider alternatives that insurers are currently employing to achieve similar results.” Work has progressed slowly, but the working group has collected information and plans to put out a white paper in the coming months, Mulready said. Meanwhile, insurers have concerns about opening up sales of closed blocks. In a letter to the working group, executives with New York Life and Northwestern

REGULATORS FINDING WAYS TO HELP INSURERS WITH OLD BLOCKS INFRONT Mutual said the rush to allow transfers could “introduce new dangers for policyholders and the state-based system of insurance regulation.” The executives suggested the following “principles” to guide IBT laws: » Policyholders should never be left worse off. An independent expert should review any block transfers to ensure that no class of policyholders is left worse off. » No monolines. Regulators “should never permit a transaction that transforms a diversified insurance company into one or more monoline insurers,” especially when the transaction involves long-duration life, annuity or health insurance business. » LTCi blocks should be ineligible for division or transfer. Long-term care insurance blocks are too hard to value and are plagued by reserving deficiencies, rate increases and, in some cases, insolvencies. » Require strong financial standards and stress testing. Long-term solvency of the business taking over a block of policies should be rigorously tested.

» Use uniform NAIC valuation and accounting standards. Use of questionable assets to back reserves and capital in transfers is concerning, the letter noted. The letter also urged the NAIC to establish strong minimum requirements for these transactions as accreditation standards. “The strength of the state-based system depends upon the integrity of solvency regulation across the country,” the letter reads. “Companies should not be allowed to arbitrage their way to diminished solvency oversight by choosing one domicile over another.”

Allstate Division

In a corporate division, an insurer divides into two or more insurance companies. Subject to its own state rules, the division creates isolated businesses for potential sale to third parties. Because the business is not transferred, no court approval is necessitated by the division, differentiating it from an IBT. Connecticut enacted a division law in

2017, requiring an insurer to submit a plan of division that must include certain elements prescribed by statute and be approved by the insurance commissioner. Illinois, Georgia, Iowa and Michigan have since followed with similar laws. In a significant deal approved in April, Allstate divided more than $5 billion worth of Michigan auto insurance policies into newly formed Illinois-based companies. “We’re looking forward to engaging with more companies and discussing more of those transactions going forward,” said Dana Popish Severinghaus, the acting Illinois director of insurance, during the Global Insurance Symposium. InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@ innfeedback.com. Follow him on Twitter @INNJohnH.

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INTERVIEW

ATTITUDE IS EVERYTHING Robert Miller grew

up around the greats of the insurance industry but forged his own path to success. An interview with Paul Feldman, Publisher 10

InsuranceNewsNet Magazine » August 2021

ike father like son? Not always. Robert Miller grew up in the life insurance business, but had no interest in joining the profession in which his father Sidney Miller made his mark. Sidney had a 60-year career, growing MillerPomerantz to serve 6,000 clients from its base on Broadway in New York. But Robert pursued a career in academia before being persuaded to give the life insurance business a try about 40 years ago. He made it to the top despite being told that he didn’t have the “aptitude” to make it in the industry. The early years were a struggle, but he found his niche and discovered the way of prospecting and selling that worked best for him. Success eventually followed and he went on to great personal and professional success, continuing to grow Miller-Pomerantz while serving a term as president of the National Association of Insurance and Financial Advisors (NAIFA). In this interview, InsuranceNewsNet Publisher Paul Feldman talks with Miller about his quest to make his way in the business, the lessons he learned from some of the industry greats, and how an acting class and some advice from his friends led to the change in attitude that powered his success. FELDMAN: How did you get into the insurance industry? MILLER: Miller-Pomerantz today is a very different organization than it was when I was fully active. And I still have one or two toes in it. But it really transitioned from becoming a company that looked for large corporate cases to becoming much more of a basic insurance practice. They still believe the way I believed a long time ago that we didn’t want to be asset managers. So while they’re still licensed to do all of that stuff, we purposely have farmed that business out to other players and we stay in our lane. And our lane has always been insurance. And right now, Lloyd Pomerantz, who’s the managing partner of Miller-Pomerantz, is more like my father than I was. He’s a go-getter; he chases down leads from everywhere. I was always enamored of all the contacts I made in graduate school who went on to Wall Street and became very wealthy. And my whole essence in the

ATTITUDE IS EVERYTHING INTERVIEW business was to write big corporate cases because it justified in my mind that I was still playing in the same places my peers were. But the mindset of the business has definitely gone back, obviously not to the kitchen table, it’s more Zoom meetings. But they’re really doing what I would call the nuts and bolts of the industry. They’re going back to a more realistic way of producing, and I think it’s the way of producing that we really need more than ever because, otherwise, the government is going to come in and take care of people. We’re not getting enough people buying insurance. So in a way, I’m seeing that they’ve been able to go back and do that and they’re doing it very well. It’s certainly not the business I left. In a way, it’s really cool to see. I was there before. I was there during. And now I’m there to see how it’s transitioned back to the way it was. And in many ways, it’s a more bulletproof business. They’re helping a lot more people in many ways, not just doing corporate transactions. I always felt guilty that while I was making a lot of money, I wasn’t serving the basic people of the country per se, except in a corporate way. There was a guy who owned a men’s hair salon in the town where we were living at that time. He was a nice guy and right after he started, my daughter was getting married. We took the whole groom’s party in so he could give everybody haircuts. So we developed this friendship. One day he asked me what I did, and I said, “I work in insurance.” He said, “You know, I’m thinking of getting life insurance.” I said, “You know, why don’t we do this? One day after work, let me meet up with you. I’m going to bring my partner, Lloyd, because I’m not sure that I’ll be the one to really take care of you.” And that really brought me full circle to where I started. We had a great meeting with him. And he expressed how much better he felt after he bought the insurance. He felt like he had taken care of something that was weighing him down. And I said to Lloyd after he had done it, “I haven’t had that much reward from selling a policy in 30 years.” I was chasing so many big things that even I forgot how much good you could do for an individual, helping them obtain something that gives them peace of mind. And he’s a client to this day. Lloyd has

become very friendly with him. I’ll never forget how great that made me feel, doing that. That is the essence of what we do. There’s no better feeling in the world than having a client satisfied and happy that they’ve actually done something to help themselves. Not help me, but to help themselves. And, like I say, he’s a client to this day. It’s awesome. FELDMAN: You said you had a rough start when you came into the business. What was your turning point? MILLER: I was a graduate school student, studying political philosophy for a Ph.D., which has about as much relationship to selling insurance, I thought, as landing on the moon. I just thought insurance

we tested you, you showed no aptitude for being what we referred to as a real insurance person.” And that made me angry. One thing about me is that I’m really competitive. And to have somebody tell me that I wasn’t good enough and I really didn’t merit any more attention, it hit me hard. But two things happened. One, I went out and was speaking to some friends and explaining my situation. They all had started to become financially successful because of Wall Street’s turnaround. People forget that in the ’70s, Wall Street was begging anybody to come and work for them. But as the ’80s came on, it started to turn. I had friends who were starting to make some real money. I had friends from graduate

Robert Miller grew up among some of the giants of the life insurance industry, including (left to right) Frank Nathan, Richard Bowers, Ben Silver, Ben Feldman, Reed Brinton and Stan Liss.

was something my father and his friends did. I never took it seriously. Before I started, I couldn’t tell you the difference between a term policy and a whole life policy. I really purposely shied away from knowing anything about what he did because I was never going to do it. And so when I came in, I had a really bad attitude. Came in begrudgingly, and while I was smart and picked it all up quickly, I was actually, if I’m being honest with myself, too embarrassed to go out there and market myself as doing this. Because I didn’t envision that future for myself. That’s about as honest as I can get. I was pulled into the manager’s office, and that was probably the one time being my father’s son saved me. He said, “Robert, if you weren’t your father’s son, you’d be out of here. You honestly have no aptitude for selling and even when

school who were becoming partners in law firms. And here I was, treading water. So they said to me, “It sounds like what you have to do is change your entire attitude about all of this. You’re holding yourself back without allowing yourself to embrace what you’re doing. But if you’re going to do it, do it. If you’re not going to do it, quit. But don’t go in between. Don’t just whine and moan about it. Stop whining.” Essentially it was like, “Look at yourself in the mirror and figure out how to do it differently.” Someone told me, “You should take an acting class.” I said “I can’t act. I’m shy.” He said, “No, it’ll just make you different than you were.” I took an acting class and you do a lot of stupid things, but you become much less inhibited if you embrace it. In addition to my taking acting the class, my manager enrolled

August 2021 » InsuranceNewsNet Magazine

INTERVIEW ATTITUDE IS EVERYTHING me in an LUTCF class. And so, the combination of the two made me realize that I had to go out and not be scared of embracing my natural prospect list, which included all the people I knew in graduate school and the people who were doing well in their jobs. I developed a steely drive to look at myself in the mirror and say, “OK, I’m doing all these things wrong. I have to change.” I changed myself. And it didn’t work immediately but I started to speak to people at lunch, call up friends. And I asked them to buy, but I also would say, “Look, I have a few ideas that might be good for corporations. Think of me if you’re ready to do anything about it.” Or I called up some political connections I had in Westchester County, and I got the list of every new incorporated business in Westchester County for that month. I would just call them up simply and say, “I’m very new at this business, but you’re also very new at your business. I know you need medical insurance and all this other stuff. Maybe there’s a way we can help each other. I can help you get something you need.” I started embracing the concept of don’t be anything that you’re not. You’re new, you’re trying to get a clientele — tell people that. What are they going to say to you? No? Who cares? So you go to the next person. But at least they understand where you’re coming from, and I understood where they’re coming from. Because they’re in the same position I am. I actually picked up a lot of business that way, by just being brutally frank with people that I was a new insurance agent and I’m green. I’m not going to know everything, but you’re going to get an honest, hardworking person in your corner. And some people saw me, some people didn’t. There was no security in office buildings in those days, so I would go up and down elevators, go into company offices saying, “Could I talk to the people who do your medical insurance? Maybe there’s another way.” Most of the time they’d say no, but sometimes I’d get in the door and more often than not, if I got in the door, people generally found me comforting to be around. That’s where the acting class helped. No way, no how, would I ever ring the doorbell and go in anywhere. I would have been too shy; I would have probably thrown up before I got anywhere near there. I realized that with my education, I could talk about almost anything. And the acting class brought me out of my comfort zone. I could put myself in these places and started melding the two, and I realized that I could do really good interviews just by being myself and, of course, I’d read so much and had so much knowledge about a lot of things, I could talk to anyone. And the other great epiphany was that people don’t know anything about insurance. They’re looking for you to guide them. So all of that came together. By my seventh year, I had hit it big. I hit it big when all the stuff came together with a gigantic case, and I’ll give you two sides of that story. Two things hit that year. One was that, if you go back 40 years, commissions were a lot different. So my first year, I earned $13,000. I thought I was doing well because as a graduate student I was earning nothing. So $13,000 in 1982 or whatever seemed like a lot of money to me. And then, I got a lead from somebody. It was an elderly lady in Greenwich, Conn., who wanted to buy life insurance, but she had a lot of health issues. And one of our clients was the chairman of the board of New York Life. My father was very friendly with the chairman of the board. I became very friendly with him. And so, this lady was never getting insurance except with special exceptions. After a month of negotiations, I called up this guy; his name was Don Ross. I said, “Look, this is a big case. It’s a ton of money, but this woman isn’t getting any insurance unless you make an exception.” And because of our friendship in those days, we were able to get medical exemptions done, insurance issued. It showed me how much connections can help you get the business. But we were always honest. We never tried 12

InsuranceNewsNet Magazine » August 2021

Rubbing Shoulders With Industry Giants

From a young age, Robert Miller was acquainted with some of the giants of the life insurance industry. Here are some of his memories. Robert Miller: Here’s a great Ben Feldman story. Back in the 1960s, “Hello, Dolly!” was playing on Broadway. It was a huge hit and Carol Channing was a huge, huge star. Ben and his first wife, Kristin, were in town, and my mother, my father, Ben and Kristin, my sister and I went to see the show. Intermission comes and we all say, “Oh wow, this is great.” But Ben says, “This has no meaning to me. I Channing in “Hello Dolly” need to go prospect.” And he literally left in the middle of the show to go prospect. So we’re done with the show. We go up to Ben’s hotel room. There’s Ben on the phone saying “I’ll be there. I’ll be there.” He just can’t get off the phone. He’s prospecting. Now, I didn’t really know what it was in those days. I was probably all of 13 or 14 then. But I’ll never forget that drive to prospect. My father had a great story where he was working on what was a large case for him. This was long before I entered the business. But he brought Ben in and Ben said, “We made a mistake.” He goes, “You need to do five times the amount of insurance.” Father was too shy; he couldn’t see that vision. But that’s the way Ben worked. On one of my early big cases, I had Ben Feldman in mind. These people had worked their entire lives to buy out a bankrupt company called Petro Oil. And it ended up being the biggest home heating oil company in the country. I went to Park Avenue to see these people. I wrote the application and got it issued, underwriting done. I came back and I used the Ben Feldman term. I said, “You know, you guys put in for this amount of insurance, but realistically I did a terrible job and I got you underwritten for twice the amount. Because if you go through the numbers, this is what you really need.” I swear to God they ripped up the check they wrote for me, gave me twice the amount. So, some of his stuff worked. The advice that Ben Silver gave me was never be afraid to approach anybody. Always take a chance. If you don’t take a chance, you get nothing. And honestly, the more successful I got, it was more like they have to come to me. I switched the paradigm around. It got more like, “I don’t need your business, but I’m really good at what I do. And if you want to get straight information with no ulterior motives, no hidden agendas, here are references, call them up. And if you want to meet, great. If you don’t want to meet, great.”

ATTITUDE IS EVERYTHING INTERVIEW to pull anything over on anybody, either. Our reputation was pristine in terms of underwriting. So he did me a favor. I went up for the meeting in Greenwich, the lawyers were there, the accountants were there. Everybody stated why she needed the policy. Lo and behold, she rejects it. She said, “I decided I hate all my grandkids, I’m not buying the insurance.” I drove back into the city, I was really depressed, but you have to keep going. Months later, one of my old friends from graduate school who had become a partner wanted to bring me in on a corporate case that he was representing. I had to hire an actuary to help me out. And it worked. In one fell swoop, I insured 10,000 people, made a ton of money, more money than anybody in my family had ever made in their lifetime. And I was off and running. When it came together, it came together big. I don’t know what else to say. It just came together. FELDMAN: Yeah, it’s interesting. Everyone fails before they succeed. MILLER: It was six years of doing what I didn’t want to do. But it got me to where I wanted to be. And a lot of people played a role in it. I don’t even know if they’re alive anymore, but there were these two insurance people in New York named Roger and Harry Phillips and they were Penn Mutual agents, and I met them through the association at that time. And interestingly enough, they were what I wanted to be. My father wasn’t what I wanted to be. They were what I wanted. And I called them up with so many dumb questions. But they mentored me and helped me, and they had the patience to answer every single question that I had. They had all the patience in the world to talk to me. They’re as responsible for my success as Stan Liss and Ben Feldman were. And that’s why if somebody calls me up and asks me questions, I’ll always have time for them. Here in my office, on my desk, is a picture of those insurance giants that I keep with me. So it’s not like they’re just faded away from me. They actively live in my life still. This was just an amazing group of people. I think about them a lot. I think about these guys, along with my father; they still are very much in the front of my mind.

I’m not one of those who says the old ways are the best ways. They’re not. But if the business loses the ability to build relationships, it’s going to lose something. I used to tell people that we have to sell, we have to sell to everybody, and we have to make sure we’re hitting a good majority of the country or someone’s going to step in and do it for us. FELDMAN: So, you came into the business following in the footsteps of your father. What were some of the things that he taught you that you probably disregarded and then thought, “I wish I would have taken that advice.” MILLER: I really didn’t disregard any of his advice; I just couldn’t act upon it. But one of the funniest things was, when I was becoming NAIFA president, they do these film introductions about you. Well, my father and I told the exact same story — but neither of us knew. We were asked the same question and the story was, I called up somebody very early on in my career that I knew from college, and he really was nasty to me. And I was really, really depressed. And in those days, I was in the bullpen. My father was on a whole different floor, and he came down just to say hello and I was sitting like this. And he asked, “What’s wrong?” And I said, “Nothing.” He goes, “No, tell me what’s wrong.” I go, “I really don’t want to talk about it today.” “Nope, I’m not leaving here till you tell me.” “All right, all right.” I told him what happened and he said, “You are such a spoiled brat. Everything has come easy to you. As soon as someone says boo to you, you curl up like you’re dead. You’ve given up, you’ve quit. You don’t have the guts to do it. I don’t even want to be associated with you.” He stormed out of the room. And I was just stunned. And my father’s version of it, when I was listening to it, was that it broke his heart when he left the room, seeing me suffer. What it made me think was, “I’m going to show him!” And I went out and I called people for hours. I actually got to a point where I took a policy application two days later and I threw it at him. I said, “Here’s your sniveling failure. I’ll do this yet.” And I stormed out on him. And then his story

goes, “I knew he could do it after that.” And my story was that, I stayed angry for a really long time. For him, it was over. “Oh, my son is really going to be able to climb this mountain.” To me, it was like, “I’m going to show him I can do this.” But either way, it was just amazing to me that they got us both on tape talking about the exact same moment. I was very, very close to my father. And there are just some things you can’t do as a son because he is your father. They have to get it from other sources. But as I got older and more mature, I learned to always listen to his advice. FELDMAN: What piece of advice would you give to somebody coming into this business? MILLER: You have to be very tech savvy. You have to be able to market yourself on social media. If I was going to prospect today, I would get all my tech savvy friends together to help me put myself out there. I think prospecting today would be so much easier than when I had to do it — with the Yellow Pages, the white pages and the phone book and a phone, a dial phone. No computers, no nothing. Rate books, had to figure out a rate. I would go right into that world. I would zip in there quickly and get in. I would get all the licenses I can. I would look at asset building, I would look at insurance. I wouldn’t leave any stone unturned in that respect. I’d find out what everybody’s doing in terms of where they’re selling, and I’d do it differently. That was another motto I had. Look at where the herd is running and run the other way. I want to go where there’s not that many people. New York Life told me I had to call 100 people to make 30 appointments to see 10 people to make 3 sales. Robert Miller was not going to call 100 people to make 30 ... the numbers didn’t work for me. So there had to be a better way to do it. But you have to think of the better way to do it. You have to take that paradigm and you have to run with it. Looking back, I was lucky I couldn’t get a job in the academic world. I would have died in that world. But in the business world, you have the chance to mold your own essence. You can make your own paradigm work for you.

August 2021 » InsuranceNewsNet Magazine

NEWSWIRES

QUOTABLE

Buffett: Pandemic’s Impact Still Hard To Predict

The man called the Oracle of Omaha is having difficulty looking into his crystal ball when trying to predict the COVID-19 pandemic’s long-term impact on the economy. Billionaire Warren Buffett said the one constant throughout the pandemic has been the difficulty in predicting how it would affect the economy, although he noted that COVID-19 restrictions have been devastating for small business and individuals, as well as for certain industries such as cruise lines and hotels. Berkshire Hathaway Vice Chairman Charlie Munger said China had the right approach to the pandemic by essentially shutting down the country for six weeks. Buffett and Munger both said U.S. regulators should do more to restrict the amount of gambling in financial markets by limiting how much investors and banks can borrow on margin. They said that over the years, Wall Street has found ways around the limits established by the Federal Reserve after the Great Depression on how much people could borrow against stocks. The two repeated their criticism of the Robinhood brokerage because they said it is encouraging average investors to speculate on stocks with options instead of making long-term investments.

AMERICAN COLLEGE CEO CHALLENGES INDUSTRY CEOS ON DIVERSITY

George Nichols remembers being at a trade association event in the mid-1990s when an insurance company CEO asked him why there aren't more Blacks in industry leadership positions. His reply? “Y'all are the ones hiring the people. Why won't you tell me why there aren't more Blacks as CEOs in insurance?” Nichols, president of The American College of Financial Services, told this story at the Global Insurance Symposium. The story illustrated his main takeaway point: If you're in a leadership position, you need to look in the mirror. He offered five additional points for insurance companies looking to be more diverse: 1. White males must buy in to the program. 2. Don’t do tokenism. 3. Make sure your diversity hires are a Nichols cultural fit. 4. Have a plan to grow your company. 5. Prepare your organization for change management. DID YOU

KNOW

COURT CHALLENGE ONLY STRENGTHENED ACA, ANALYST SAYS

The Affordable Care Act has been upheld by the U.S. Supreme Court on three different occasions, the most recent one being the 7-2 vote in June that ruled Republicanled states lacked the standing to challenge the law’s individual mandate. Each time the law has survived a court challenge, it emerged stronger than before, according to Joel Ario, managing director of Manatt Health and former Pennsylvania insurance commissioner. Ario told InsuranceNewsNet that the court’s latest decision means that the law has become even more engrained in the American social safety net. A group of 18 Republican states, led by Texas, focused on the law’s tax penalty

As the economy and stock market continue to improve coming out of the pandemic, people are wisely taking lessons learned and applying them to their go-forward financial strategies. — Kelly LaVigne, vice president of consumer insights, Allianz Life

meant to induce the purchase of health insurance by most Americans. They argued that President Trump’s 2017 tax cut, which zeroed out the penalty, made that provision unconstitutional.

AMERICANS ARE $13.5T RICHER SINCE THE PANDEMIC

Most Americans gained wealth during the pandemic — about $13.5 trillion in all — according to The Wall Street Journal. But 70% of that $13.5 trillion went to the top 20% of earners, and a third of it went to the top 1%. The benefits, in other words, were heavily distributed among the rich. Besides the stimulus payments and unemployment benefits, the federal government also paused the collection of some student loan and mortgage payments, allowing people to keep more money than they would normally. The Federal Reserve lowered interest rates, launched emergency lending programs to purchase government debt and took further steps to ensure banks kept lending throughout the pandemic. All of these steps ended up juicing the stock market, which is great news for those who trade stocks and/or have their retirement funds invested in the market, a population that’s much more likely to be on the wealthier end of the spectrum.

Wells Fargo is shutting down all existing personal lines of credit and no longer offers the product. Source: LIMRA

Source: National Association for Business Economics

InsuranceNewsNet Magazine » August 2021

Source: CNBC

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“Marketers are the single largest expense for an IMO, sometimes upward of 50%

the Fıeld

A Visit With Agents of Change

THE

Financially Savvy Fashionista

ZANEILIA HARRIS shows women that financial empowerment is always in fashion. BY SUSAN RUPE 16

InsuranceNewsNet Magazine » August 2021

n the early years of her financial advising career, Zaneilia Harris was asked to give a presentation to the local Junior League chapter. She needed to make the presentation engaging, so she thought about tying it to something she loved. And a theme for her practice was born. Harris is a Certified Financial Planner and president of Harris and Harris Wealth Management Group in Upper Marlboro, Md. She also is the author of Finance ’n Stilettos — Money Matters for the Well-Heeled Woman, and she describes herself as “a financial planner to the well-heeled woman.” She produces a podcast series called “Heels Of Success.” If you guessed that Harris uses her love of shoes to relate to her clients, you are correct. Harris said her practice is focused on executive-level women, “with a lens toward Black women, because our industry doesn’t focus on the African American community, and it definitely doesn’t focus that much on Black women.” Her firm’s slogan is “Helping smart women make smart decisions about their money.” She said she wants her firm “to be a safe haven for Black women across the country.” “It’s a place where I can talk to them about finances and be a resource to them, as well as to join their personal board of directors and provide them with the advice and guidance and support necessary for them to achieve their goals and live their dreams.” Harris described her ideal client as a woman who makes a six-figure annual income “and is very much in control of her destiny. She is very strategic, and she has goals and she’s the person her group of friends relies on because she seems to have it all together.” But even though her ideal client seems to have it all together, she still needs help building her financial future. Harris wants to be the person who helps her make the right financial decisions for her life and her family. “At the end of the day, your family dynamics are yours. Your family

THE FINANCIALLY SAVVY FASHIONISTA — WITH ZANEILIA HARRIS

resources are yours,” she said. “And we are here to provide another perspective that maybe you didn’t consider. But the financial decision is still yours.” Retirement is the foremost concern of her clients, Harris said. But she added that many of her clients have financial concerns that are characteristic of Black family culture, and they need someone who understands those concerns. “For example, if a client says they give a specific amount of money to their family because it’s something that’s important to them, that’s not always understood or respected,” Harris explained. “But it’s something that’s important. You have to understand the dynamics of being in a Black family. A lot of times, if you’re the successful one in the family, there is this unwritten rule or obligation that exists for us to help anybody in the family who may need it. And I don’t think the majority understands this.” Harris also is the creator of the Savvy Women Investors Circle, an educational program designed for women to gain knowledge and guidance around building and growing their investment assets. She wants to help women overcome the wage gap and achieve the success they deserve. “Black women are graduating from college and getting degrees because we want better for ourselves,” she said. “But we also have to deal with the fact that we’re not always being lifted up to be successful — not having mentors and not having sponsors. Everything I cover in my classes is for women to ask for the salary and the compensation we deserve. And sometimes we women are afraid to ask. I’m a big proponent of women valuing themselves and asking for what they deserve.”

Overcoming Financial Stress

Harris is inspired to help women become financially secure because she was raised by her grandmother in a household where money was a constant source of stress. “I remember a time when my grandmother couldn’t pay her bills and that was the only time I saw her become emotional,” Harris recalled. “That left a strong impact on me. I saw how that impacted our family.” Harris entered St. Paul’s College in

Lawrenceville, Va., where she studied business administration and accounting while pursuing as much knowledge about managing money as she could. She subscribed to Money magazine and read every issue cover to cover. “There was a section that used to appear in the magazine, where they featured a professional giving advice to people who wrote in about their finances, and the expert gave them recommendations of little things they should do to change their finances so they were able to achieve their goals,” she said. “That section really appealed to me, and I guess that’s when I realized that was something I would like to do as a career.” After reading an article in Black Enterprise that discussed job opportunities in finance, she eventually homed in on the idea of becoming a financial advisor and helping others achieve their financial goals.

Encouraged On The Journey

Harris moved to Washington after graduation and took a job as an auditor with the federal government. She mentioned her interest in becoming a financial advisor to one of her colleagues, and he surprised her by researching the steps needed to become a Certified Financial Planner and placing that information on her desk one day. “He said ‘Here you go. Go do it,’” she said. “I will never forget that.” Harris left her government job and began working for Nasdaq. Again, a colleague there encouraged her to pursue her dream. So she moved on — earning her CFP designation and becoming a financial advisor with Edward Jones. “I met people there who were very encouraging and supportive, but I still didn’t realize how hard starting in this industry can be because it’s built on networks and connections,” she recalled. “If you don’t have those deep connections and networks, it’s hard to build a business.” Harris spent much of her early days at Edward Jones going door to door to find clients. One day when she was prospecting in her own neighborhood, someone called the police on her. Eventually, she took over managing an Edward Jones office in Petersburg, Va.,

IN THE FIELD

You have to understand the dynamics of being in a Black family. A lot of times, if you’re the successful one in the family, there is this unwritten rule or obligation that exists for us to help anybody in the family who may need it. And I don’t think the majority understands this.”

August 2021 » InsuranceNewsNet Magazine

the Fıeld

A Visit With Agents of Change

“We don’t give women enough credit. We’re smart. We’re successful and we also are good with money.” but her heart remained in the DC metro area. “Washington is a bigger city, there are more things to do — just more of everything,” she said. Meanwhile, she lost her job in 2009 in the depths of the Great Recession. Despite being in the midst of an economic downturn, it was the perfect time to start her own firm. “If I was going to start, I might as well start in the middle of the recession because everybody was angry with the big firms anyway,” she said. “Going independent made sense to me because I get to tell my own story.”

Clients And Legacy

Looking ahead, Harris said that she believes her legacy will be her clients. “My hope is that my clients are thankful they encountered me because they were able to live their dreams, live their lives the way they wanted to and were able to do the things that they enjoy and love,” she said. A second part of the legacy she hopes to leave is one in which money and women are discussed from a positive perspective. “There’s a tendency in our industry that whenever there’s a conversation about women and money, it’s negative,” she said. “We don’t give women enough

credit. We’re smart. We’re successful and we also are good with money. Look at the households that we’re running, making sure our kids achieve their goals; we’re helping our families make those things happen. And we’re helping our parents and grandparents too. So to say that women are not good at money is ridiculous. That’s why my whole idea is to have positive conversations around money, with a specific slant toward minority women.” Harris’ podcast series, “Heels of Success,” shares stories of money lessons learned as well as the success stories of a number of women. “It’s my legacy to my teenage daughter,” she said. “So when she doesn’t want to listen to me, I can send her to the podcast and she can listen to other women tell her things I would tell her.”

Zaneilia Harris

Susan Rupe is managing editor for Insurance NewsNet. 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.

Financial Planner to the Well Heeled Woman

InsuranceNewsNet Magazine » August 2021

before investing. Insurance products are issued by Minnesota Life Insurance Company in all states except New York. Variable annuities are sold by prospectus. Your In New York, products are issued by Securian clients should consider the investment objectives, Life Insurance Company, a New York authorized risks, charges and expenses of a portfolio and ithensurer. Minnesota Life is not an authorized New variable insurance product carefully before York doesionotanddovariinsurance business investiinnsurer g. Theandportfol able insurance iproduct n New York. Both compani prospectuses contaies narethiheadquartered s and other iinnformati St. Paulo, MN. Product avai l a bi l i t y and features n. A prospectus can be obtai ned at may vary by state. Each i n surer i s sol e l y responsi ble securian.com or 1-866-335-7355. for the financial obligations under the policies Anor contracts annuity isitinistended to betiaeslooffered ng-term,through taxsues. Securi deferred rement vehicces,le. Earni ngs are taxabl Securian reti Financi al Servi Inc., member FINRA/e as ordi come when stributed,St. Paul and, iMN f wit55101hdrawn SIPC,nary400inRobert StreetdiNorth, before age 59½, may be subject to a 10% federal 2098, 1-800-820-4205. tax penalty. If the annuity wil fund an IRA or other Securi tax qualanifFiiendanciplaan,l ithes thetaxmarketi deferralng name featureforoffers Securi no addiantioFinalnancivalaul e.Group, QualiInc. fied, diandstriibtsutiaffionsliates. from Mia Roth nnesota and Securi IRALiarefe Insurance generally Company excluded from grossan Liinfcome, e Insurance Company are affi ates appl of Securi but taxes and penal tieslimay y to an Finon-qual nancial iGroup, fied disInc. tributions. Please consult a tax The is solareelycharges adviisnorformati for specion presented fic informatiabove on. There iand ntended for useassoci by fiantedanciwiathl professi expenses annuitieos,nalsuchs. Such as ideferred nformatisaloneis notcharges intended ic consumpti for earlforypubl withdrawal s . on orVaridiasblsemie annui natiotin.es have additional expenses such as mortality and expense risk, administrative charges, investment management fees and rider fees. The variable subaccounts of variable annuities are subject to market fluctuation, investment risk and loss of principal. MultiOption annuities and optional benefits may not be approved in all states and product features may vary by state. Not all products, features and optional benefits are available from all firms. We Variable annuities are sold by prospectus. Your clients should consider the investment objectives, risks, charges and expenses of a portfolio and the variable insurance product carefully before investing. The portfolio and variable insurance product prospectuses contain this and other information. A prospectus can be obtained at securian.com or 1-866-335-7355. An annuity is intended to be a long-term, taxdeferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to non-qualified distributions. Please consult a tax advisor for specific information. There are charges and expenses associated with annuities, such as deferred sales charges for early withdrawals. Variable annuities have additional expenses such as mortality and expense risk, administrative charges, investment management fees and rider fees. The variable subaccounts of variable annuities are subject to market fluctuation, investment risk and loss of principal. MultiOption annuities and optional benefits may not be approved in all states and product features may vary by state. Not all products, features and optional benefits are available from all firms. We reserve the right to limit or discontinue acceptance of future purchase payments after the contract is issued. This may limit the ability to increase the contract value through additional purchase payments. If an optional benefit is elected in the contract, this may also limit the ability to increase the value used to calculate the optional benefit. 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. The Indexed Account options described here can be accessed through the purchase of the MultiOption Momentum variable annuity. This material must be preceded or accompanied by a current MultiOption Momentum variable annuity prospectus. You should consider the investment objectives, risks, charges and expenses of the portfolio, Indexed Accounts and the variable insurance product carefully before investing. The portfolio and variable insurance product prospectuses contain this and other information. Please read the prospectuses carefully before investing. 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. Securities offered through Securian Financial Services, Inc., member FINRA/ SIPC, 400 Robert Street North, St. Paul, MN 551012098, 1-800-820-4205. 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. The information presented above is solely intended for use by financial professionals. Such information is not intended for public consumption or dissemination.

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August 2021 » InsuranceNewsNet Magazine

COVER STORY

How those who found success in the industry are inspired to mentor others. BY SUSAN RUPE

InsuranceNewsNet Magazine » August 2021

PAYING IT FORWARD COVER STORY

hen Kim Harding started in the life insurance business 18 years ago, she was one of 10 women in an office of 250 agents. She said she would never have survived her early years without the mentorship of two of the more experienced women agents. That mentorship led to her passion for mentoring others. Today, Harding is cofounder of Harding Financial and Insurance, Woburn, Mass., and is chairman of the board of Life Happens. “The women who mentored me taught me that this is definitely a hard industry to break into, but with hard work, perseverance and continuous education, the sky’s the limit,” she said. “Each of them had unique practices that are different from mine today. But they gave me the inspiration that I could achieve anything. They really emphasized how important it is to always be focused on your clients, and that doing the best thing for them every single time will always lead to success.” Mentorship holds a unique role in the life insurance and financial services industry. Whether it’s agents who moderate continuing education classes, or formal mentoring programs within the corporate setting, so much of the advisor’s education comes from peer-to-peer learning. And those who are mentors say they have many reasons to be inspired to help their peers. Harding became a mentor 13 years ago, sharing her experiences with other agents in the hope that they will benefit from what she went through on her journey in the industry. “My first meeting with my mentees is all about establishing rapport and trust and sharing my career path,” she said. “How I started in the industry, from my initial struggles to the success I have today. And then we turn the tables and learn more about where the mentees are on their journey, what their focus is, what their roadblocks are and what they want most to gain out of the experience. And the responses they give me set the stage for a year of meeting and discussion.” Harding said her mentorship discussions include best practices for data gathering and how to ask clients the right questions. She also helps mentees

“My mentees need a sounding board. They need to see that I was once in their shoes.” — Kim Harding create presentations that are easy for clients to understand. “Generally, new advisors over-complicate things,” she said. “And it leads to confusion and lack of execution.” Harding also focuses on practice management, sharing how she works with her team to achieve the best results for their clients. She said her mentees also are interested in how to transition from being an insurance agent to becoming a financial advisor who offers comprehensive planning. “My mentees need a sounding board,” she said. “They need to see that I was once in their shoes and that, with perseverance and continuous education and by working smart, they can achieve success in our field. And then from meeting

like-minded advisors, they can learn from and advocate for our industry and their clients.” Harding said the inspiration she receives through her mentoring “is unbelievable.” “First, it’s because we have a financial crisis in our country, and Americans need our help more than ever before. And our industry is aging at this exact moment when our clients will need us most. So it’s essential for the mature advisors to help our younger colleagues remain in this career and help them build their practice and their knowledge. And then the second thing is, we need to pay it forward and give back. I am where I am today because of a long list of people who saw potential in me and were

August 2021 » InsuranceNewsNet Magazine

COVER STORY PAYING IT FORWARD willing to share their time and talents. So I believe it’s my duty and my honor to do the same and pay it forward.”

I get to win because I see them succeed. And I’m also building my business at the same time. So it’s a structure where we’re creating partnerships with the people that we mentor so that they can have an opportunity.”

Robert Gonzalez and Paula Gonzalez Kurday

At Appreciation Financial in Houston, mentorship is woven into the company’s fabric. “Right out of the gate, it’s each one teach one,” said Robert Gonzalez, agency vice president. “You learn it, you see it, you do it, you turn around and you teach the next individual. We have tons of cliche sayings in our company, and one of them is ‘Don’t be a secret agent.’ The reason you got to where you are is because somebody else was able to share this opportunity with you. And you

Dan Young

Dan Young became a college professor after 20 years as a financial advisor with Ameriprise. He is a found“They get to win because they ing director and an assislearn something new. tant professor in the Doctor I get to win because I see them of Business Administration program at Goldey-Beacom succeed.” College in Wilmington, Del. During his years as an advisor, he also was a college professor, so mentorSo we have an entire curric- ship is in his blood. And he is determined ulum that’s a step-by-step that his students will have an easier time handbook on how to learn getting their feet wet in the business than the business, how to learn he had. products, how to acquire “So much of the financial advisor’s clients. The second-biggest work, when I started in the late 1990s, headache is ‘How do we ac- was very much ‘smile and dial,’ and just quire clients?’ And the third kind of figure it out on your own,” he headache is compensation. said. “As I started teaching classes, I re“We’re constantly teaching alized there was so much more besides people how to build a team, basic salesmanship that we could teach how to sustain a team, how students in terms of strategy, time manto manage a team, how to agement, decision making, how human manage your time, things resources works, marketing and entrelike that.” preneurship.” In addition to mentorship Young eventually began holding office on how to learn the business hours specifically for students who were and acquire clients, Gonzalez interested in a financial services career. does what he calls “personal develop- He knew that students who interned ment mentoring.” with a financial advisor were more likely “It’s ‘Where are you struggling today?’ to be successful in their future careers, And it might be, ‘I’m unmotivated,’ ‘I so he arranged for students to come into got heartbroken,’ ‘I’ve got family stuff,’ his Ameriprise office to see just what ‘I’ve got money stuff.’ It’s working with they could expect. the individuals themselves to see where “I’d have them come in at 6 p.m. on a they need help in how to deal with cli- Friday and sit them next to me, and I’d ents, the right words to use in their pre- have my phone there and a list of numsentation, whatever they need to build bers to call. I’d have a headset and they’d their confidence.” have a headset, and I said, ‘For the next Mentorship is a win-win for the two hours we’re going to call these numfirm, said Paula Gonzalez Kurday, bers.’ And my students told me the most Robert’s sister, who also is an agency important lesson they learned is to focus vice president at Appreciation. “They on the task in front of them.” get to win because they learn someNow that Young is focusing more thing new and they build their business. of his time on teaching, he is still

— Paula Gonzalez Kurday

“The reason you got to where you are is because somebody else was able to share this opportunity with you.”

— Robert Gonzalez would be selfish to keep it to yourself. So how we are raised in this company is, we’re going teach this to you. And the expectation is you’re going to turn around and teach it to somebody else. And that creates a community of individuals who are selfless. It’s all about how can I support you? How can I get you to where you need to go?” Appreciation Financial has about 250 advisors in five states. The firm specializes in providing retirement advice to public school teachers. Mentorship solves what Gonzalez described as “the three biggest headaches in our industry.” “No. 1 is ‘How the heck do I learn this?’ 22

InsuranceNewsNet Magazine » August 2021

HALL OF FAME • FALL OF SHAME COVER STORY

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August 2021 » InsuranceNewsNet Magazine

COVER STORY PAYING IT FORWARD

“I realized there was so much more besides basic salesmanship that we could teach.” — Dan Young mentoring future financial services professionals. He and another financial advisor picked up the cost for one student to take her life, accident and health insurance exam and have helped her to understand the business, including how to market to clients. In the mentoring relationship, the student is like the client, he said, in that “they’re the only person who matters.” Right now, all the students he mentors are women. As a Black man in the financial services world as well as the academic world, Young said he believes it’s important that students see someone who looks like him. “I think the best way to combat racism and prejudice is where you see someone like me and I’m a teacher,” he said. “And so it’s not strange to you to receive information from me and give respect to me.”

Brad Tapscott is the national LILI chair and is a financial advisor with Ameriprise in Daniel Island, S.C. He was a volunteer moderator for the South Carolina LILI program for eight years. Moderators not only mentor the class members but also train the volunteers

who will take over as future moderators. After advisors complete the LILI course, they pledge to serve in a volunteer leadership capacity for the association. Taking the LILI class and then eventually moderating the course was a leap of faith, Tapscott said. “As the only

Brad Tapscott

More than 20 years ago, the National Association of Insurance and Financial Advisors launched its own mentoring program, the Leadership in Life Institute. LILI’s purpose is threefold: to advance the advisor’s personal growth, to advance the advisor’s professional success and to train future leaders for the association. 24

InsuranceNewsNet Magazine » August 2021

“You have to make sure that each person in the class is heard and understood, because they’re in a safe space when they’re in there with you.”

— Brad Tapscott

HALL OF FAME • FALL OF SHAME COVER STORY

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COVER STORY PAYING IT FORWARD person who’s generating income in my practice, I was wondering how I was going to manage this. But it taught me to be as focused as I possibly could. LILI was exactly what I needed at exactly the right time. It made me a more efficient business owner, and it made me able to handle things at a much higher level.” Much of the LILI curriculum is based on the writings of Stephen Covey (The Seven Habits Of Highly Effective People) and Jim Collins (Good To Great). The moderator guides the class members through discussions on how the lessons can be applied to the members’ practices and their personal experiences. Every LILI participant comes away with a different take on what they learned through the program, Tapscott said. “Some people take it more on the business side, some people look at their local association, some people look at their family, and I’ve also seen people leave the business after taking the LILI course because they realized they aren’t cut out for it.” The LILI course takes six months to complete and Tapscott said when the six months is over, the class members “become brothers and sisters in arms.” “I think it helps them identify the situations that come up in their practices or in their life that they’ve handled a certain way but have never understood why they handled them that way. And then they see it from that person’s shoes and learn to deal with the problem solving and the interpersonal communications — it opens their eyes to a calming effect.” Tapscott said that as a moderator, “you have to make sure that each person in the class is heard and understood, because they’re in a safe space when they’re in there with you.” “If you do the work, it shows you what your practice could be,” he said. “And being in these classes with people who have had years in the business — it’s magic.”

Dien Yuen

Dien Yuen is an assistant professor of philanthropy at The American College of Financial Services and is an instructor for the college’s Chartered Advisor in Philanthropy program. As part of her passion for teaching advisors about philanthropy, she is working on an initiative called Advisors of Color, with the 26

“Mentorship is, if you need help with something I can help you. But sponsorship is when you use your social capital.” — Dien Yuen goal of building study groups of Black advisors who have their CAP designations and recruiting 100 CAP Advisors of Color by the end of 2021. The college is partnering with 19 community foundations throughout the U.S. to support the CAP study groups. “We would like to diversify the sector, but we also believe there’s a market that is untapped and we want to reflect community needs,” Yuen said. “There are statistics out there that say 30% or 40% of advisors are going to retire in the next 10 years. So we need to start figuring out how we are going to build that pipeline to replace them.”

InsuranceNewsNet Magazine » August 2021

The CAP program takes nine months to complete, and many of the CAP designees refer business to each other, Yuen said. “We were able to document that through CAP, $1.4 billion in giving will go into the economy through philanthropy.” In addition to going through the curriculum, those who are in the Advisors of Color program also experience mentorship through the program moderators as well as through their fellow participants. But Yuen said the program goes beyond mentorship to incorporate sponsorship. “Mentorship is, if you need help with something, I can help you,” she said.

PAYING IT FORWARD COVER STORY our senior leaders and our employees.” The men he mentors are seeking information on the skills or characteristics that would help them advance their careers. “What are the mindsets or behaviors that Northwestern Mutual is looking for as we think about who will be the next generation of leaders at the company? And how do those relate to their current jobs, and how can they put them into practice?” In addition, Gerend is mentoring three women in the home office who were identified as having potential to be promoted to the executive level. He said this group of mentees has its own set of needs. “They are looking for help with executive presentation and communication skills. How to engage in a way to influence and engage senior leaders. Another recurring theme is career advancement. So we do a little bit of counseling and coaching or mentoring about how to apply for a higher-level job.” Gerend said that as a mentor, “It’s OK if you don’t know everything. We all have places where we need to develop and grow.” Gerend said he “was the beneficiary of really great mentors early in my career” and he sees the need for it in the industry. “The opportunity to have people who are at different stages of their careers, maybe different stages of life, and sharing your experience is really valuable for me and I really enjoy it. I’ve benefited from it in so many ways, and it’s really rewarding to be able to pay it forward.”

“It’s OK if you don’t know everything. We all have places where we need to develop and grow.” — Tim Gerend “But sponsorship is when you use your social capital. It’s when you stick your neck out and are willing to use your name to make sure someone else is recommended or on the list for promotion or introduced.”

Tim Gerend

Northwestern Mutual has a mentoring program in its home office in which senior team leaders are matched with upand-coming executives for mentoring. Tim Gerend, chief distribution officer, said his experience in receiving mentorship early in his career inspired him to mentor others in his office.

“I’m meeting monthly with a group of 10 African American men who are in our home office and working directly with our field force. We talk about their experience at Northwestern Mutual, their career aspirations and their career paths. It’s very open-ended; we cover lots of different things.” He said the mentoring program “is to provide opportunity for open dialogue and transparency around the employee experience and career development, to talk about the issues of the day or current events, and things that are happening in the company. We also want to provide more visibility and connection between

For more stories of financial services professionals who are inspired to mentor others, go to: innmb.com/payitforward Susan Rupe is managing editor for Insurance NewsNet. 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.

Like this article or any other?

Take advantage of our award-winning journalism, licensure and reprint options. Find out more at innreprints.com.

August 2021 » InsuranceNewsNet Magazine

LIFEWIRES

Do you regret buying life insurance during the pandemic?

21% 66% 13% Yes No Not sure

Some Regret COVID-19Driven Life Insurance Purchases About one-quarter of Americans bought life insurance as a result of the COVID-19

Source: Expertise.com

pandemic. Among this group, nearly two-thirds cited fears over pandemic-related mortality as the reason behind their purchase. And 79% of these purchasers were younger than age 44. But now that the pandemic appears to be waning, some of those life insurance purchasers seem to have buyer’s remorse, according to a poll conducted by Expertise. com. The poll showed 21% of those who bought life insurance during the pandemic regret buying it. Of that group, 9% have already canceled it, 16% indicated they will cancel it eventually and 26% were not sure either way. Among the poll participants who purchased a life insurance policy after the pandemic started, 29% contracted the COVID-19 virus and were aware of it before buying their life insurance policy. Of those who had the virus, 38% said it raised their life insurance premiums and 27% said they had a difficult time finding a carrier that would accept their application. Of those who bought coverage during the pandemic, 64% purchased it online, 21% bought it in-person and 14% opted not to answer.

INSURERS GRAPPLE WITH LONGTERM COVID-19 DEATH THREATS

While larger society suffers from COVID19 fatigue and is ready to move on, insurers are just beginning to get a handle on the long-term risk assessments associated with the pandemic. Some of the data to date is alarming to say the least. For example, researchers are studying a COVID "syndrome" that results in deaths months after the patients get over the disease, explained Paolo Bandeira Pinho, vice president and medical director of innovation for Diameter Health. These COVID-19 death threats impact life insurance actuarial tables, Pinho noted. The insurance industry is interested in updated risk assessments to account for the full range of COVID-19 long-term impacts. That can only be done with a steady stream of data, Pinho said, and drilling down to determine what health impacts can be tied to COVID-19.

DIGITAL SOLUTIONS WILL INCREASE, INSURANCE EXECS SAY

Eight in 10 insurance executives believe their companies’ efforts to adopt digital DID YOU

KNOW

Nine in 10 industry executives believe consumers' expectations/behavior will change post-pandemic Not at all likely

Somewhat likely

Very likely

Increased use of e-commerce self-service models 2%

24%

74%

Increased appetite for digital shopping experiences 2%

25%

73%

Need for faster turnaround times 5%

30%

65%

Increased use of video engagement tools 2%

43%

Source: LIMRA

55%

solutions accelerated due to the COVID-19 pandemic. Most (9 in 10) agree that consumer expectations will demand these efforts continue post-pandemic. That’s the word from LIMRA and McKinsey & Co. LIMRA’s Emerging Technologies Executive Task Force identified three areas of focus that could help modernize life insurance companies. They are: » Data and analytics — to gain greater insights into customers and operations, improving profitability, operations and the overall customer experience. » Digital acceleration — improving operational efficiencies (both at the home office and for its sales force) and, by doing so, lowering costs and improving customer satisfaction. » Platform modernization — transforming how companies organize and

Kelly Rowland, Grammy award-winning singer, is the 2021 celebrity spokesperson for Life Insurance Awareness in September. Source: Life Happens Source: The Wall StreetMonth Journal

InsuranceNewsNet Magazine » August 2021

QUOTABLE I figured until they told me to stop asking them, I'd keep asking for referrals in the future. — Russell Harrison, insurance advisor from Australia, speaking at the 2021 Million Dollar Round Table annual meeting

access their data by updating and unifying the many different data sources that exist in most companies is key in enabling insurers to take advantage of new technology solutions that other industries already use.

BLACK OWNERSHIP INCREASED, BUT GAP REMAINS

The majority (56%) of Black Americans own life insurance, up three percentage points from 2020 and four percentage points higher than the general population. Yet this still represents a 19-point gap from the 75% of Black Americans who believe they need life insurance. That’s according to the 2021 Barometer Study from LIMRA and Life Happens. The study finds Black Americans report a higher level of financial concern than the overall population average and COVID-19 exacerbated these concerns. Black Americans were significantly more likely to be concerned about being able to save for an emergency fund, paying their monthly bills and their mortgage, and leaving their families in a difficult situation due to a premature death. While the top reason Black Americans give for not purchasing coverage is that it’s too expensive, the study finds Black Americans are more likely than the general population to overestimate the cost of life insurance (75% versus 50%). They are more likely to believe the coverage they get through their employer is adequate, as well.

6 in 10 Black Americans plan to purchase life insurance within the next year. Source: 2021 Barometer Study

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

LIFE

The Impact Of Genetic Testing On Life Insurance Coverage The results of genetic testing may affect the ability to obtain life insurance at a competitive rate. By Adrienne Wilson

ur society’s ever-increasing emphasis on healthy living and longevity has rapidly sparked an interest in direct-to-consumer genetic testing kits such as 23andMe and Ancestry. Also, recent scientific breakthroughs have encouraged the use of genetic testing in the medical field, especially in the treatment of patients who may have an increased genetic predisposition to certain diseases. While knowledge is power, and these new technologies may ultimately assist physicians in minimizing their patients’ future risk of developing certain ailments, there are also drawbacks to genetic testing that may not be readily apparent. One of the most important factors to consider is how the results of genetic testing may 30

affect the ability to obtain life insurance coverage at a competitive rate. Before people apply for life insurance coverage, they must understand both the positive and negative ramifications of submitting to genetic testing. In 2007, 23andMe became the first company to offer D2C genetic testing, and dozens of similar companies have since sprung up in its wake. However, the reliability of D2C genetic testing has come into question. Traditionally, genetic testing has only been available through health care providers who have the experience and medical training to accurately interpret results. A National Institutes of Health study of D2C testing showed an alarmingly high false-positive rate of 40%. Another factor to consider is that there is currently little oversight or regulation of D2C testing companies. Although the popularity of D2C testing is on the rise, the main source of genetic testing information used by life insurers when underwriting a client largely consists of testing conducted by the client’s

InsuranceNewsNet Magazine » August 2021

physician and is located in the proposed insured’s medical records. To address the various issues faced by a life insurer when underwriting a client who has had genetic testing, let’s use the “Five W’s and an H” approach.

Who at the carrier ultimately decides what risk class is assigned to a client who has had genetic testing?

Some carriers follow the guidelines outlined in their respective underwriting manuals, and the final medical decision is made by the underwriter assigned to the file. Depending on the type of disorder, the test result and the manual used, the manual may advise the underwriter to refer the file to the medical director for a final decision. Other carriers advised that they will automatically send the file to their medical director for input or a final decision. One carrier advised that they send all files that include genetic testing results to a specialty risk management team for review. Several carriers advised that

THE IMPACT OF GENETIC TESTING ON LIFE INSURANCE COVERAGE LIFE these files are regularly run by their legal department for review from a regulatory compliance standpoint, especially when adverse action is likely to occur.

What other factors come into play in the decision-making process when a carrier is faced with genetic results in an individual’s medical records?

The majority of the carriers polled said they look at each file in the context of the client’s overall medical history. Although genetic test results are an important factor in life insurance underwriting, they are still just a piece of a larger puzzle. Several components are considered when underwriting a client who has had genetic testing completed. In other words, the genetic test result itself is not the only factor examined when rendering the final risk assessment of a client. Other factors can include but are not limited to age, gender, smoking history, family history, personal medical history, lifestyle choices, frequency of follow-up with a physician and the results of any diagnostic testing. I can’t speak to how medical directors would decide what underwriting action to take on a file, but I believe we can safely assume that they would take a holistic approach to each file and consider all of the pertinent available medical information before rendering a decision. If the carrier uses a manual approach, the manuals used can vary depending on the particular company. Carriers can use one manual, several manuals or even their proprietary manual to make an underwriting decision.

When do carriers ask for genetic testing results or additional medical information?

The majority of life insurance carriers do not have a specific question regarding genetic testing on their applications or nonmedical or paramedical exams. However, some carriers do have wording on their nonmedical and paramedical exams that could potentially lead an applicant to disclose information about doctors or specialists who have conducted genetic testing. Most carriers will ask if a life insurance applicant has “seen a specialist” or “received a recommendation to see

a doctor or specialist” within a certain number of years. Further, nonmedical and paramedical wording can include questions about “pending medical tests or follow-up for medical concerns,” “any diagnostic tests” or “screening tests for family history.” In reading the fine print on the “authorization” page on some carrier applications, the phrasing can permit the insurance company to gather information from medical professionals or specialists to include “genetic information and genetic test results, to the extent permitted by law.” Finally, some carriers are now expanding their paramedical exams to include not only the usual family histories of cancer, cardiac disease and diabetes but also any family history of Huntington’s disease, Alzheimer’s disease or polycystic kidney disease diagnosed at any age.

through a D2C company, they will ask for the results. When faced with a client who has had genetic testing completed, life insurance carriers will ask for additional information to include any diagnostic testing or lab results done in relation to the particular impairment. Subsequently, carriers will often credit a client for proactive physician follow-up, normal test results or positive lifestyle modifications.

Where was the testing completed?

In 2008, Congress enacted the Genetic Information Nondiscrimination Act. This regulation protects Americans from “discrimination based on their genetic information in both health insurance (Title I) and employment (Title II).” While federal regulations protect discrimination based on genetic results in health insurance, GINA does not

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There are state regulations in place to limit the ability of life insurers to use clients’ genetic testing results when underwriting a file, but these regulations are not all encompassing and often only focus on the underwriting of a specific disease. While the majority of life insurers do not directly ask about genetic testing on their applications or medical forms at this time, they do often have access to this information through the procurement of clients’ medical records. At present, most carriers choose to limit their underwriting to genetic testing results ordered in a clinical setting. However, some carriers, when polled, advised that if they are made aware of genetic testing having been completed

FamilyTreeDNA A data trove for genealogists with a bigger budget. $80 SOURCE: The Wirecutter

extend to life insurers. In response, several states have enacted their own laws restricting the use of genetic test results in life insurance underwriting, but to date, no state has enacted a complete ban on the use of genetic test information for the purposes of life insurance underwriting. It is important to note that carriers must walk a fine line when determining whether they can use genetic testing for underwriting purposes depending on the applicant’s state of sale.

Why are life insurance carriers interested in expanding the use of genetic testing?

The accurate assessment of risk and the

August 2021 » InsuranceNewsNet Magazine

LIFE THE IMPACT OF GENETIC TESTING ON LIFE INSURANCE COVERAGE

Other Privacy Factors To Consider Here are some questions you should make sure to find the answers to before using a DNA testing service, including one of the picks in this guide: Who is doing the testing? If a company is using an outside lab to sequence your DNA (most do), you should read the testing facility’s privacy statement as well. How long are my physical samples (saliva and DNA) stored? Some companies destroy samples once they complete their analysis. Others may store them for a year or even indefinitely. Can I delete my genetic information and analysis from a company’s website? Some—but not all—companies offer this option via an email request. Again, if they use an outside lab to perform sequencing, you need to make a separate request to the testing company. Can I adjust my privacy settings? Some companies offer a family-matching service, which is usually an opt-in program. Most services allow you to opt out of the program if you later change your mind. SOURCE: The Wirecutter

ability to predict mortality is at the heart of life insurance underwriting. Life insurance products and pricing are based on actuarial models that group insureds into “pools” based on underwriting classifications assigned to applicants. The accuracy of these pools is only as good as the underwriting information used to assess each proposed insured’s mortality risk. Adverse genetic testing results can potentially pose threats to the accuracy of insurance pools. Hypothetically speaking, there are three ways in which life insurance carriers may not be aware of a client’s genetic testing results: 1. The carrier does not directly inquire about the results of genetic testing on their application, nonmedical form or paramedical exam, and therefore, the client does not feel it is necessary to divulge information regarding their genetic testing results. 32

2. The carrier does ask about genetic testing, but the client deliberately withholds the information, otherwise known as a “material misrepresentation.” 3. State regulation prohibits the life insurer from using the results of genetic testing when making an underwriting decision. Forcing life insurers to make underwriting decisions without information relevant to the client’s overall risk classification can threaten the accuracy of insurance pools in two ways. The first is adverse selection. Adverse selection is the tendency of clients who are at a higher-than-average mortality risk to purchase life insurance coverage. The second is an increase in the rate of persistence of those who already have life insurance coverage to keep it in force after learning of an adverse medical finding. One of the main reasons that life

InsuranceNewsNet Magazine » August 2021

insurance was not covered under GINA is that life insurers are at a greater disadvantage than health insurers when it comes to risk assessment. This disadvantage is because the life insurer does not have the same opportunity as a health insurer to reprice coverage when new information is revealed. In other words, the long-term nature of life insurance coverage results in a greater impact on mortality experience because, unlike health insurance, the life insurer has one shot to evaluate a client’s potential mortality and price the policy accordingly. Health insurance carriers can increase premiums in response to inflation, increased cost of diagnostic testing and other factors. Adverse selection and increased persistence by individuals who are at a higher mortality risk are a primary concern for life insurance carriers. Both of these factors can potentially cause an increase in premium rates for new insureds or even insolvency due to an abnormally high claims experience. It must be said, however, that there is also an upside to genetic testing where life insurance companies are concerned. As previously stated, life insurers have a vested interest in accurately pricing their insurance pools. This also includes rewarding clients who have a below-average medical risk with more competitive rates. As the field of genetics and the availability of genetic testing continues to evolve, so too will the carriers’ responses to the impact that genetic testing has on their ability to address the concerns of the consumer while also making sure that their product pricing continues to reflect both the positive and negative factors inherent in this type of testing. Adrienne Wilson, FALU, ACS, FLMI, CLU, ChFC, is an underwriting consultant with Crump Life Insurance Services. She may be contacted at adrienne.wilson@innfeedback.com.

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ANNUITYWIRES

Structured Annuities Dominate 1Q Sales

Variable Annuities 36.1%

Indexed Annuities 24.8%

QUOTABLE

Fixed Annuities 0.8%

Some call them registered index-linked annuMulti-Year Structured Annuities ities. Others call them buffered annuities. Still Annuities 22.7% others say they’re structured annuities. By 15.6% whatever name you favor, the product’s sales SOURCE: Wink Inc. figures are undeniably spectacular. Structured annuity sales in the first quarter were $9 billion, up 7.5% over the previous quarter and 86% over first quarter 2020. Structured annuities have a limited negative floor and limited excess interest that is determined by the performance of an external index or subaccounts. Overall, deferred annuities posted quarterly sales of $58.1 billion, an increase of 3.2% over the fourth quarter and 10.3% from the first quarter 2020, according to Wink’s Sales & Market Report. The report paints a picture of an industry continuing to recover strongly from the COVID-19 pandemic. “Things couldn’t look brighter for the structured annuity market,” said Sheryl J. Moore, CEO of both Moore Market Intelligence and Wink Inc. “My latest forecasts show structured annuity sales eclipsing indexed annuities before 2022 closes.”

GEN X IS READY TO TALK ANNUITIES: SURVEY VIRGINIA, ALABAMA ADOPT AMENDED ANNUITY SALES RULES

Virginia and Alabama became the latest pair of states to adopt updated annuity sales rules based on a National Association of Insurance Commissioners model regulation. The pair become the 13th and 14th states to adopt the new standard, which basically applies a “best interest” update to existing annuity suitability rules. Adopted in February, the NAIC model law articulates the best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation. The rule specifically does not establish a fiduciary duty, nor does it ban agents from recommending products with a higher compensation structure. But the agent must be able to show that such a recommendation is in the consumer’s best interest. Critics say the rule is not a significant improvement on the current suitability standard. DID YOU

KNOW

Youngish investors have an “extraordinary” interest in annuities, new surveys are showing. A large majority (71%) of 45and 54-year-old investors are at least “somewhat interested” in purchasing an annuity, according to Protected Retirement Income and Planning Study, a j oi nt proj e c t between Alliance for Lifetime Income and CANNEX. maybe it’s time The study com- “Hmm, for an annuity...” bines two surveys conducted in March and April of 1,519 investors, age 45-75 with more than $100,000 in investable assets, and 602 financial professionals. The organizations found a disconnect between investor interest and advisors’ perception of investor interest. “The high level of interest in annuities and protection among younger investors is extraordinary,” said Jean Statler, CEO of the Alliance for Lifetime Income. “Unfortunately, there’s still a large gap between what investors say is important to them and what financial professionals think is important.”

Financial professionals continue to substantially underestimate how much their clients are looking for protected income in retirement. — Tamiko Toland, director for retirement markets at CANNEX

A majority (55%) of all investors in the survey said protecting income is “very important” to them, but only 39% of financial professionals agreed. The issue is more pressing for the Gen Xers surveyed, as less than half (48%) have a pension. Only 15% have an annuity.

PRINCIPAL EXITS FIXED ANNUITIES MARKET

Principal Financial Group will stop selling U.S. retail fixed annuities and consumer life insurance products and pursue sales of blocks of those assets already in force. “The outcome will result in a more focused portfolio and stronger capital management strategy that we believe positions Principal for strengthened leadership in higher growth markets and greater capital efficiency, leading to higher expected shareholder returns,” Principal CEO Dan Houston said in a statement. Principal said in February it planned a strategic review and appointed two Houston new independent directors as part of a settlement agreement with activist investor Elliott Investment Management. The hedge fund had been pushing the company to explore selling or spinning off its more capital-intensive life insurance business to focus on its more profitable wealth management operations.

Due to mortality credits, annuities can generate income about 40% more efficiently than bonds today. Source: David Blanchett, managing director and head of retirement research at QMA

August 2021 » InsuranceNewsNet Magazine

ANNUITY

How FIAs Can Ease 3 Retirement Risks Inflation and longevity are two of the risks that threaten a retirement portfolio unless a plan is made for converting some of that portfolio to a protected income stream.

By Susan Rupe

nvestors put more importance on income protection than financial professionals do, and that means advisors must address ways that annuities can protect retirement income. That was the word from Tamiko Toland, director of retirement markets for CANNEX USA, who discussed fixed indexed annuities and their role in addressing key risks in retirement planning as part of a webinar by the National Association for Fixed Annuities. Toland cited two recent studies conducted by the Alliance for Lifetime Income: one among investors ages 4575 with $100,000 or more in investable assets, and the other among financial professionals. The main focus of the two studies was to identify how protected retirement solutions fit with retirement planning approaches, and how frequently investors and financial professionals consider or use annuities in addressing different income approaches and needs.

Income Protection Is Important To Investors

The key takeaway from the study, Toland said, was that more investors believe income protection is important than advisors believe. More than half (55%) of investors said they believed protection was “moderately important” when thinking about retirement income while only 39% of advisors said they believed it’s important to discuss the concept of retirement income protection with clients. “The mismatch on this thing is a lot greater, and it’s important to bear in 34

mind that if you’re a financial professional and you’re talking with clients, this resonates with them more than you realize,” Toland said. “And the way that people frame the retirement income planning process may work better when you’re leaning more into the protection question.”

tion (41%), and tax deferral (19%). Investors who have annuities are more satisfied with their financial advisors than are investors who do not have annuities, the study showed. More than eight in 10 investors who have annuities (84%) said they were extremely satisfied with their advisor, as opposed to 74% of those

The Challenge of Retirement Planning SAVING INCOME

• Retirement planning is a different challenge • Importance of safety (protection) • Generating income reliably is difficult • Low interest rates make other tried-and-true methods less sustainable Source: CANNEX USA The study showed that two-thirds of financial professionals said their approach to retirement planning changed somewhat in the past year. The top two reasons? Low interest rates (71%) and reduced returns on bonds (49%). “Both of these reasons point directly to fixed annuities,” Toland said. “We’re talking about a set of solutions appropriate for individuals who are looking to replace products. This shows the value of the fixed annuity product set in providing guaranteed income for life.” Nearly one-quarter (22%) of financial professionals said their approach to retirement planning changed moderately or a great deal in the past year, the study showed. Advisors who are using annuities are using them more for income purposes (45%), asset growth and protec-

InsuranceNewsNet Magazine » August 2021

without an annuity. “Advisors may be underestimating how satisfied clients are with having protected income,” Toland said.

Advisors Need To Have The Talk

The study showed the importance of having advisors discuss retirement income strategies with clients. Financial professionals reported they know the importance of retirement income planning and have had conversations about it with eight out of 10 clients who are age 55 or older. In addition, most investors who haven’t had a conversation about retirement income with an advisor want to do so. More than half (52%) of financial professionals said one of the benefits to retirement income planning is to create an

HOW FIAS CAN EASE 3 RETIREMENT RISKS ANNUITY income stream that lasts a client’s entire life. Investors concur — 54% appreciate this benefit. While 47% of investors say a benefit of income planning is protecting assets, only 26% of financial professionals say the same, creating a potential gap between the benefits clients want and the planning services they’re provided. Financial professionals admit low knowledge of annuities, suggesting a need for more education. Forty percent of financial professionals said they are only somewhat knowledgeable or not at all knowledgeable about annuities. However, this rises to 50% among registered investment advisors.

Three Risks And Solutions

Conversion of retirement savings to retirement income may be difficult for advisors, Toland said. For some consumers, it also may be a different way of thinking. “Low interest rates make other triedand-true methods less sustainable,” she said. “COVID-19 underscored those low interest rates, but we have been in a low interest rate environment for some time. Having to deal with low interest rates makes certain income strategies — bond laddering or CDs — unsustainable. Fixed annuities can give a better yield, and that’s more important as interest rates for other products hit the floor.” Fixed annuities can replace income before retirement if a client needs additional income, or they can replace income during retirement as part of a fixed income allocation, she said. Clients have three risks that fixed annuities can address, Toland said. They are:

Key Gap: Investors put heavier weight on protection than financial professionals Investors Importance of protection when thinking about your Retirement Income

Financial Professionals Importance of the concept of protection when working with clients on Retirement Income

14%

91% 36%

84%

NET Moderately or more important

45%

NET Moderately or more important

55% 39%

Not at all important Only somewhat important Moderately Important More important

Not at all important Only somewhat important Moderately important More important

Protection = design to provide a guaranteed income payment or reduce asset loss

Source: CANNEX USA

1. Longevity risk. Clients risk outliving their savings. Fixed annuities address the risk of living a long time. The income from an annuity lasts as long as the client lives.

gressively because you can assume higher risk because you have that guarantee with the income floor,” Toland said. “Not having to take significant withdrawals from the base portfolio really does impact that risk profile and it enables you to invest in such a way as to keep up with inflation.”

2. Inflation risk. Clients risk reduced purchasing power in the future. If a client has a strong base of guaranteed income, they can invest the rest of their portfolio in ways that have more risk but bring higher gains. This is a great protection against future inflation, since clients may need to rely on withdrawals from their portfolios to keep up with costs. “Once you establish a strong base, you can invest the rest of the portfolio more ag-

3. Sequence of returns risk. Client portfolios may not recover from market losses experienced early in retirement. With income from annuities, clients will not need to rely on their savings to pay the bills. If the stock market value goes down, clients can give their investments time to recover before they need them in the future. This protects future income and helps grow the money clients will leave to their heirs.

“I don’t think it’s difficult for people to understand that exposing yourself to greater risk at a time when you have to make withdrawals from that pool of money is something you want to avoid,” Toland said. “And any product that allows you to avoid it is going to be helpful, and that’s where the annuity fits in.” Susan Rupe is managing editor for Insurance NewsNet. 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.

August 2021 » InsuranceNewsNet Magazine

HEALTH/BENEFITSWIRES

Administration Issues Regs Against Surprise Billing New federal regulations to protect patients from massive unexpected medical bills

will take effect Jan. 1, 2022. The Biden administration issued those regulations to implement a law passed in Congress last year that took aim at these surprise bills. The regulations seek to protect patients from getting stuck with bills for thousands of dollars when a doctor is outside of their insurer’s network. The rules apply to both emergency room care and non-emergency situations, such as when an anesthesiologist happens to be out-of-network even though the surgeon is in-network. The rules stem from the No Surprises Act, which Congress passed in December and was signed into law by former President Donald Trump.

HOSPITALS SLOW TO POST PRICE TRANSPARENCY INFO

Hospitals have been slow to fully comply with a new federal rule that was designed to bring more price transparency to health care, a University of Minnesota study revealed. Beginning in January, hospitals were required to publish detailed information online about the rates they charge for services, including the different negotiated rates paid by various private health insurers. But only 1 in 4 hospitals surveyed reported all required data in a format that makes it easy for researchers and policymakers to analyze the information. The study found that while relatively few hospitals reported their negotiated rates with insurers, nearly three-quarters published a subset of prices in a consumer-friendly format.

DID YOU

KNOW

MEDICARE ENROLLEES EXPECTED TO HIT 81.5M BY 2030

In 2030, when the youngest of the baby boomers will have reached the age of eligibility, the total number of Medicare enrollees is expected to reach 81.5 million, up 27% from 2020's 64.3 million. That’s according to research from Kaiser Family Foundation. This wave of baby boomers could place a significant strain on the resources of the U.S. health care system, warned Dave Rich, CEO of Ensurem, an insurance technology firm. Rich advised health care providers and the health insurance industry to make plans now to assure that they can meet the needs of this cohort of new Medicare enrollees. Rich also warned of increasing medical costs, driven by factors such as fee-for-service billing, the rise of chronic illness and obesity, lack of cost transparency, and rising pharmaceutical costs. He noted the median cost for generic prescriptions rose 37.6% from 2015 to 2019.

QUOTABLE It is very difficult for consumers to know what price they will face when they seek care from a hospital. — Jean Abraham, professor of health care administration, University of Minnesota

MEN’S HEALTH IS OFTEN IN WOMEN’S HANDS

Nine out of 10 U.S. men told an Aflac survey that they lead at least a somewhat healthy lifestyle, but the reality could be a bit different. Research from the Centers for Disease Control and Prevention and the National Health and Nutrition Examination Survey suggests men may have some disconnected perceptions about their health. The CDC reports that nearly half of men have high blood pressure, and according to NHANES, 43% of men are obese. In addition, men have a number of health issues that are more common to them, such as certain cancers and heart disease. Men told the Aflac survey that a positive, encouraging nudget to visit the doctor can help, with 44% saying their spouse or partner persuades them the most to visit the doctor. Women, in particular, have the strongest pull, with more than half (56%) of men reporting their wives, girlfriends or mothers most persuade them to go to the doctor. However, the topic of going to the doctor can be a contentious one for men. Although 50% say they discuss health-related issues with their female relatives (wife, girlfriend or mother), 43% said they have argued with or withheld health concerns from them.

1 in 4 men experience fear or anxiety when they go to the doctor. Source: Aflac

More than 60% of Americans want health insurers to cover alternative medicine.

InsuranceNewsNet Magazine » August 2021

Source: ValuePenguin

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HEALTH/BENEFITS

Tailor A Disability Plan To Your Client’s Needs And Budget Today’s income protection insurance products are more flexible and affordable than clients may think. By Jill Frohardt

ndividual disability insurance, also known as income protection insurance, is a vital part of any financial plan. Your clients may have a plan in place to reach their goals. However, these plans are only as good as clients’ abilities to fund them. What will happen if they get sick or injured and can’t earn their usual income for an extended period of time? And if they have little or no income, how will they continue to fund their plans for the future? Or fund their plans for retirement? Income protection insurance can provide your clients an extra layer of protection to help cover their bills if they become too sick or injured to work. But it’s not a one-size-fits-all solution. Today’s income protection insurance products are often flexible, providing tailored coverage to meet your clients’ personal and budget needs. Some clients might think they’ll be able to rely on their savings to self-fund a break in income. Or they might believe their employer-provided income protection will be enough. The reality for most is that self-funding, or relying on employer-provided insurance, will leave them without enough income to cover all their expenses. Help them evaluate the protection they have in place and whether it would provide enough money to fund their normal expenses, their financial plan and their retirement if they were unable to work for a year or more. It’s beneficial to research carriers and products to find a policy to best fit your clients’ unique needs. You’ll find there are many options when it comes to income protection insurance. You can think of these options as levers that can be pulled 38

to increase overall coverage, choose special protections or lower costs as needed. Here are the most common levers you’ll find with an effective and sound income protection insurance policy. Maximum benefit periods. Clients can choose a maximum benefit period. This is the longest amount of time the carrier will pay benefits. The longer the period chosen, the more expensive the premium will be. Common options include two, five or 10 years or maximum benefit periods that can last until age 65

to work in another occupation and still receive their full total disability benefit. Highly specialized professionals may find this expanded definition, often called Own Occupation coverage, helpful if they can no longer perform their specialty, but can still work in another capacity or field. Definition of residual disability. In situations where clients become sick or injured and can’t work full time — or can’t perform all their duties — most policies will offer a residual disability benefit

Disability Claims Have Many Causes

SOURCE: The Standard

or 67, ensuring steady income until retirement age even if disabled. Benefit waiting periods. All income protection insurance policies also have a choice of waiting period. This is the number of days of disability clients would have to wait before they would be eligible to collect disability benefits. The most common options are 90 days and 180 days, but some carriers offer shorter and longer options. Clients with significant savings may want to choose a longer waiting period to save on premiums. Definition of total disability. Most policies will pay a benefit to insured individuals who have lost all their income because they can’t work due to disability. Some policies also offer an expanded definition that will allow insured individuals

InsuranceNewsNet Magazine » August 2021

that pays a portion of the basic monthly benefit if the insured individual has lost some — but not all — income. Some residual riders have a minimum benefit guarantee to pay a certain amount, such as at least half of the monthly benefit, for six months or 12 months. Although a loss of income is usually required for benefits to be payable, some carriers offer an option that requires only a loss of time, duties or income to satisfy the benefit waiting period. Renewability. Many carriers offer guaranteed renewable policies. This means the carrier can’t change or cancel a policy before the policy’s termination date as long as premiums are paid when due. The carrier can raise premium

TAILOR A DI PLAN TO YOUR CLIENT’S NEEDS HEALTH/BENEFITS

Disability Happens You may think your odds of becoming disabled and unable to work are low, but consider these facts.

WHEN ACA IS NOT THE ANSWER

One in four 20-year-olds will become disabled before age 67.1

90%

Approximately 90% of disabilities are caused by illness, not accidents. 2 Every seven seconds, someone in the United States suffers an illness, accident or injury that will keep them out of work for more than one month.3

1. Social Security Administration Fact Sheet, 2019 2. Council for Disability Awareness 2013 Long-Term Disability Claims Review 3. Council for Disability Awareness — America’s Disability Counter, accessed September 2017

rates, but not for the first three years, and only if they raise rates for an entire class of policies, which is rare. However, for an additional cost, your client can lock in rates (as long as they don’t purchase more coverage) by opting for a noncancelable policy. Specialized riders. Clients can add special riders to their policies to cover specific circumstances. For example, clients with large student loans may gain greater peace of mind with a student loan rider that will reimburse student loan payments if they become totally disabled. Or if clients are concerned about extra costs they could incur if they become catastrophically disabled — such as a disability that leaves them cognitively impaired or needing daily assistance to perform basic functions — they could purchase a catastrophic disability rider that pays an extra benefit, in addition to the total disability benefit, in that situation. Another popular option is a

There’s a better way to offer your clients full health coverage than the public market. One that’s:

• 25% less expensive than Short Term Medical

cost-of-living rider that will increase benefits each year after the first year of claim to keep pace with inflation. With multiple options to select, you and your clients have the flexibility to choose only the provisions they truly need, making sure they’re protected and not overpaying for coverage they likely won’t need or don’t value. An income protection insurance policy built just for them can provide protection when it’s most important without breaking the bank. Ultimately, you want to ensure each of your clients has the appropriate protection in place so their plans aren’t sidelined if they’re faced with an unexpected injury or illness. Jill Frohardt is second vice president of individual disability insurance sales at The Standard. Jill may be contacted at jill.frohardt@innfeedback.com.

August 2021 » InsuranceNewsNet Magazine

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Does Retirement Live Up To The Hype? Retirement is supposed to be something everyone looks forward to. But do the post-employment years meet everyone’s expectations? Not necessarily, according to a survey conducted by Coventry Direct. More than one-third of survey respondents (36%) said they were unable to spend as freely

LGBTQ Americans have big savings goals when it comes to retirement. According to a Lincoln Financial Group study, LGBTQ respondents believe they should save a higher median amount of their annual salary for retirement — 20% — when

compared with the broader population at 15%. LGBTQ respondents are also more

in retirement as they expected to, and more than half of the surveyed retirees (53%) started saving for retirement too late.

This is a greater source of regret for female retirees. More than 1 in 3 respondents report accessing Social Security benefits earlier than they expected to — and receiving less money than they had anticipated. About 1 in 4 surveyed retirees said they don’t have the lifestyle they wanted during retirement. More than 55% of respondents regret where they live in retirement because of the climate or lack of proximity to family. About 47% of respondents have a smaller social life than expected, and almost 60% of retirees travel less than they wanted to. And when asked their biggest post-retirement concern, health worries topped the list.

Most Americans Support Sustainable Investing

Sustainable investing has solidified its place at the investing table and will likely hold that position, according to an Allianz Life study. The study found Americans are turning their attention to financial services and insurance companies with an expectation that they use sustainable standards. The study found that sustainable investing remains top of mind and in

favor with Americans despite the ongoing volatility of the past several years. In fact, nearly two-thirds (64%) of respondents currently hold a pos-

itive opinion on this type of investing, and (52%) who are not participating expressed interest in allocating funds to sustainable investments.

Pandemic Hurt Retirement Dreams For Blacks, Hispanics

The pandemic set Black and Hispanic Americans further back in their income potential and retirement prospects, further exacerbating an existing retirement disadvantage. Blacks and Hispanics were more likely than 40

InsuranceNewsNet Magazine » August 2021

LGBTQ Consumers Aim High For Retirement Goals

likely to have increased their retirement plan contribution rate in the last year (31% of LGBTQ consumers took this action vs. 23% of the broader population), and almost half (45%) of LGBTQ consumers said they followed the performance of their investments more closely last year. However, despite an enhanced focus on retirement planning, Lincoln Financial’s research found financial concerns still exist for LGBTQ consumers, who were more likely than the general population to report worrying they would never be able to retire (53% vs. 39%).

The LGBTQ community expressed feeling significant stress over the past six months, even more so than the broader population (47% vs. 36%). The Lincoln Financial study showed the LGBTQ community is also more likely to say stress impacts their ability to manage or improve their personal finances (69% vs. 60%).

whites to experience disruption in employment, according to findings from the 2021 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute and Greenwald Research. At least 35% of Hispanics across income groups had a negative job or income change since February 2020, even affecting the highest income group. At least 31% of all Blacks experienced a negative effect, with the most pronounced in the middle income group.

Black Americans Show High Levels Of Financial Well-Being A study finds Black communities are modeling financial resilience and grit in unprecedented ways. • Susan Rupe

lack Americans make up a disproportionate percentage of lower income groups, yet have higher financial well-being scores than the general population. That was a key finding of a study, Black America’s Financial Wellness, authored by Timi Joy Jorgensen, assistant professor and director of financial literacy at The American College. The research evaluates the main factors impacting financial well-being in the

Black community to assess ways the financial services industry can guide Black Americans toward better financial success. The bad news, according to the study, is that more than 1.2 million Black adults lack access to financial services, meaning no bank accounts, no access to credit, an unstable income and no financial literacy. Despite these findings, Black adults showed higher financial well-being scores than the general population. The study also showed that Black Americans represent “a fertile and untapped marketplace of resilient and capable consumers ready for better financial alternatives … Therein lies the opportunity for unprecedented growth.”

Average Financial Wellness Score 53.5 53 52.5 52 51.5 51 50.5

49.5 49 48.5

General Black Population Americans

Men

InsuranceNewsNet Magazine » August 2021

Black Men

Women

Black Women

SOURCE: The American College

How does the industry increase financial well-being? The report made these recommendations: » Exposure. Share culturally competent education married with financially sound practices. » Stability. Focus on the next goal — wealth creation comes after financial stability. » Empowerment. Change the narrative around what it means to “make it” financially from “making money” to “making your money work for you.” The report showed: » More than 10% of Black men and 14% of Black women reported the lowest levels of access; only 8% of Black men and 7% of Black women experienced the highest tier of access. By comparison, 30% of white men experienced the highest tier of access, and only 3% of white men reported the lowest tier of access. » Notably, financial stress was not a significant predictor of financial well-being for Black women, compared to the overall consumer market, where financial stress strongly predicted financial well-being. Some of the report’s key findings address the following issues: Economic empowerment and equality. Black Americans’ lack of access to financial education, stable incomes and financial products influences their ability to take action to address their financial situations. Black America models financial resilience. Black women are key stakeholders in the financial culture and well-being of Black communities. The

BLACK AMERICANS SHOW HIGH LEVELS OF FINANCIAL WELL-BEING

most significant predictors of financial well-being for Black women were actions. Tangible solutions for Black women to improve their financial well-being include paying credit cards in full, being able to handle an unexpected $2,000 expense, and regularly contributing to retirement savings. The study further showed that when it comes to how Black women are thinking and feeling about money, the biggest predictors of financial well-being are financial satisfaction, financial confidence (or one’s ability to set a goal and accomplish it) and financial self-efficacy (knowing how to act and believing in one’s ability to follow through). “Communities of color are not being served by financial advisors today,” said Chris Blunt, CEO of Fidelity & Guaranty. “So some of what we saw in this study is a wealth threshold issue, meaning most of the middle market today in the United States is not being well served, because so many financial advisors have moved up to serve affluent and high net worth clients. But even within those segments, I think you’re seeing communities of color not having access to advice and guidance.” How can the industry respond? Blunt listed two issues. “The first one is that the industry needs to do a better job of recruiting and attracting people within communities of color to be financial advisors. The other is addressing the lack of knowledge around different types of financial products and making an investment in basic financial literacy.” Financial literacy is a generational issue, Jorgensen said. “Communities teach the next generation how they interact with financial services. So I think part of this is a learned gap, both on the financial services side and on the community side, that needs

Inclusive Financial Wellness & Empowerment Model

ACCESS Income stability Financial knowledge Banking Credit

ACTION Earning Spending Saving Planning

EFFECT Money management Subjective financial knowledge Financial confidence Financial satisfaction Self-efficacy Financial stress

EMPOWERMENT SOURCE: The American College

to be addressed through some creative solutions that might bring the community more to the financial services sector, but also bring the financial services sector more to the communities.”

Blacks, Hispanics Worried About Retirement Income

A recent F&G survey revealed that 62% of Black American and 74% of Hispanic American investors are worried about their retirement income as a result of the pandemic compared with only 57% of whites, underscoring how COVID-19 and social unrest has further deepened financial disparities across racial lines. Other findings from F&G’s survey include: » COVID-induced risk aversion. Forty-three percent of Black American investors “strongly agree” that the events of the first six months of COVID-19, paired with social unrest and market volatility, have made them less likely to take financial risks, while

When it comes to how Black women are thinking and feeling about money, the biggest predictors of financial wellbeing are financial satisfaction, financial confidence and financial self-efficacy.

only 29% of whites reported the same. » Appetite for new financial products. While about one in four white American investors (28%) report they are more likely to explore new financial products that they haven’t used before postCOVID-19, 41% of Black American investors and nearly one in two Hispanic American investors (49%) say the same. » Lack of education around role of guaranteed income. Nearly one in two Black American investors have never used a financial advisor (47%) and another 21% have used one in the past but do not currently. This statistic points to an education gap around which products can help create a financial safety net, even amid turbulent market conditions. Blunt said the findings from his company’s survey showed “there’s a great opportunity to talk to people and ask them, ‘How did COVID-19 change the way you’re thinking about retirement? What’s keeping you up at night?’” Susan Rupe is managing editor for I n s u r a n c e N ew s N e t . 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.

August 2021 » InsuranceNewsNet Magazine

INBALANCEWIRES

The #1 Cause Of A Heart Attack

Heart disease is the leading cause of death in the U.S., claiming the lives of more than 650,000 Americans in 2019, according to the Centers for Disease Control and Prevention. The CDC says that every year, more than 800,000 Americans have heart attacks. So what is the leading cause of a heart attack? Although many factors, such as genetics, may factor into an individual’s heart attack risk, the top cause is a buildup of fatty plaques in the arteries — also known as atherosclerosis. What is commonly known as “hardening of the arteries” happens when fat builds up in the artery lining. As the buildup increases, the artery narrows. Over time, less blood — and less oxygen — can get through the artery and the heart cannot do its job. Top contributing factors to atherosclerosis include age, tobacco use, high blood pressure, high cholesterol, diabetes or metabolic syndrome. A family history of heart attacks is another major factor.

HOW SODA SLOWS METABOLISM

Caffeinated sodas can do a number on your metabolism. It's true that caffeine is a stimulant that increases metabolic rate. But added sugars in that fizzy drink can actually slow down your metabolism. Fructose, the sugar often used in soda recipes, appears to be a particular culprit, and the high-fructose corn syrup used in many soft drinks can contain 55% fructose. A 2012 study showed that people who drank fruc tose -sweetened beverages significantly decreased the number of calories they burned in a day. When fructose goes through your digestive system, it ends up in your liver, where it gets converted to fat. This raises your triglyceride levels. Both weight gain from too many calories in soda and high triglycerides from too much fructose are hallmarks of metabolic syndrome. This cluster of metabolic symptoms puts you at greater risk of heart disease, diabetes and stroke. DID YOU

KNOW

QUOTABLE Low wealth is a risk factor that can dynamically change over a person's life and can influence a person's cardiovascular health status. — Muthiah Vaduganathan, MD, Brigham and Women's Hospital, Boston

your body stay asleep all night and wake up feeling rested.

NOT EATING ENOUGH OF THIS COULD SHORTEN YOUR LIFE

THE BEST SUPPLEMENT FOR A GOOD NIGHT’S SLEEP

If you’re doing everything you can to get more shut-eye, but you still struggle with sleep, you may want to think about taking a supplement. Lisa Moskovitz, registered dietitian and CEO of the NY Nutrition Group, gave the inside scoop on the best supplements for sleep. Her top recommendation is valerian root, an herb native to Europe and Asia that has been used for centuries to promote better sleep. And once you’ve fallen asleep, ashwagandha could be your key to staying asleep through the night. Ashwagandha is a natural compound that not only helps get you into a sleepy state, but may help keep you there throughout the night, she said. This root extract can also help alleviate anxiety and improve how you cope with stress — all of which can impact how well you sleep at night. No more waking up in the middle of the night with worries about the day to come; with an ashwagandha supplement you can help

Researchers say having a low omega-3 index could shorten your life by almost five years. So you might want to head to your favorite seafood market and pick up some salmon. A study published in The American Journal of Clinical Nutrition looked at omega-3 indexes in more than 2,000 people and found that the higher the index, the lower the risk of death. People with an omega-3 index in the highest 20% of the population lived about 4.7 years longer, or after age 65, than people with an omega-3 index in the lowest 20%, researchers found. Health benefits of omega-3 include reduced inflammation, decreased hunger levels and improved blood sugar regulation. You can pop a supplement to get more omega-3, or you can get it by consuming flaxseed oil, wild salmon, mackerel, walnuts, sardines or chia seeds.

Sweetened cereal is the worst bedtime snack for your waistline.

InsuranceNewsNet Magazine » August 2021

Source: Cleveland Clinic

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INBALANCE

Sleeplessness Carries High Price For Businesses, Individuals Getting 40 winks can be difficult. Here are some tips for a good night’s sleep. By John Hilton

e’ve all experienced it: You lie awake long past the time you should be sawing logs, all the while knowing you are unlikely to be sharp and alert for the big day ahead. You could get up and at least be productive, but what if you’re just about to find sleep at last? Or maybe you’re out on the town with an old friend, or watching a late game that goes into double overtime. Should you sacrifice sleep for the memories that staying up could offer? It’s a quandary for sure. One thing that is not in dispute is the value of a good night’s sleep — as well as the fact that many Americans are not getting it. According to the American Sleep Association, nearly 70 million Americans suffer from a sleep disorder. Insomnia is the most common sleep issue, with 30% of adults suffering from short-term

insomnia and 10% from a long-term affliction. Health experts agree that adults need at least seven hours of sleep per night. But about 35% of people get less than that. Age seems to be a big factor in the lack of sleep, with 37% of people ages 20–39 reporting low sleep duration and 40% of people ages 40–59 getting too little sleep.

“Sleep is not just beneficial but essential to our mental and physical health,” said Christine Deschemin, a certified hypnotherapist based in Hong Kong. “Sleep deprivation can cause a series of illnesses and poor emotional regulation. It is believed to lead to more inflammation. People who lack sleep tend to be more hungry, and their cognitive abilities can be impaired. Their minds are foggy, and they may lack focus and concentration.”

Wide Awake Costs

Nearly 70 million Americans suffer from a sleep disorder, with insomnia being the most common.

Lack of sleep can have a significant negative impact on mental and physical health. Although it might seem like a harmless nuisance, long-term insomnia can have a dramatic effect on daily life and even lead to death from accidents and impaired judgment.

InsuranceNewsNet Magazine » August 2021

The costs to society of sleep deprivation are substantial. According to the American Academy of Sleep Medicine, insomnia costs: » 11.3 days of work for the average worker every year. » $2,280 in lost productivity for the average worker each year.

» A total of $63.2 billion for the entire nation in lost productivity per year. The individual costs are hefty as well. About 1,600 deaths and 40,000 injuries are caused by drowsy driving each year,

SLEEPLESSNESS CARRIES HIGH PRICE FOR BUSINESSES, INDIVIDUALS INBALANCE the American Sleep Association reported. Likewise, a significant portion of the 100,000 hospital deaths caused by medical errors each year can be attributed to sleep deprivation. The obvious solution is to get more sleep. But for some, it is easier said than done. There are things you can do to make sleep come faster and with more regularity, Deschemin said. She lists four environmental keys to promoting good sleep: » Make sure to go to bed around the same time each night. » Make your bedroom a place conducive to deep sleep (keep the place dark, relaxing and at a comfortable temperature).

» Avoid stimulants (caffeine, alcohol). » Remove electronic devices from the bedroom. Sleep is crucial for the body to refresh and replenish itself. A night’s sleep comprises many cycles of about 90 minutes each, Deschemin explained. Each cycle includes different stages with different benefits and characterized by different brain wave patterns. The first part of the cycle is NREM sleep (non-rapid eye movement), and the second part of the cycle is REM (rapid eye movement) sleep. “With the help of those cycles, our bodies and minds go through renewal,” she added. “It is believed that the body experiences more growth and renewal

during the last stage of the NREM sleep (deep sleep or slow-wave sleep) and during REM sleep. With the release of growth hormones, the body is able to repair itself.” InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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Take advantage of our award-winning journalism, licensure and reprint options. Find out more at innreprints.com.

10 Benefits Of Good Sleep

There are many benefits of getting regular, good sleep every night. Here are 10 from www.verywellhealth.com: 1 A healthy heart. Lack of sleep has been associated with worsening blood pressure and cholesterol, which are risk factors for heart disease and stroke. 2 Reduced cancer risk. Melatonin, a hormone that regulates the sleep-wake cycle, is thought to protect against cancer, as it appears to suppress the growth of tumors.

6 Improved memory. Research hasn’t fully explained why we dream; doctors are certain of the connection between good sleep and enhanced memories, events and feelings. 7 Weight control. Researchers have found that people who sleep fewer hours per night are more likely to be overweight or obese.

3 Less stress. This one is simple: A tired body is more prone to stress and high blood pressure. And high blood pressure leads to a host of other health issues.

8 Napping makes you smarter. According to one study, people who did not nap or took naps shorter than one hour experienced mental decreases four to six times greater than those who napped at least an hour.

4 Reduced inflammation. Studies show that mediators of inflammation are altered by sleep loss.

9 Reduced risk of depression. Proper sleep can help maintain proper serotonin levels in the body. People with serotonin deficiencies are more likely to suffer from depression, doctors say.

5 Increased alertness. A good night’s sleep makes you feel energized and alert. The increased energy level allows the body to perform normally without having to compensate for sleep loss.

Overall rejuvenation. Sleep helps the body repair itself and operate at optimum efficiency. August 2021 » InsuranceNewsNet Magazine

BUSINESS

3 Simple Steps To Creating Lasting Relationships Figuring out where clients want to go and how close they are to their goals is key to earning trust. By Stephen Kagawa

ou probably know that creating lasting relationships with the people you advise will turn them into long-term clients. Not only that, but they’ll be more likely to heed your advice, they’ll probably find greater financial success, and they may end up referring their friends and family to you. Did you know there’s a way to go from closing 20%-30% of your cases to creating lasting relationships with nearly everyone who engages with you? All you need to do is follow three simple steps, and the good news is you can start right away. Let me show you how.

and their fears. The more you seek to understand these things about your clients, the more you will understand and the more trusting will be the dynamic you’ll achieve with those who seek your counsel and guidance. Focusing on your product is the obstacle that gets in the way of that happening. Your prospects need to feel understood before they can trust you enough to allow you to guide them.

2. Keep An Open Heart And A Quiet Mind

When I speak with prospects and clients, I keep this in mind: Keep an open heart and a

1. Learn To Listen

Your first responsibility to people who seek your counsel is figuring out where they want to go in their lives, and your second responsibility is learning where they are relative to where they want to go. What’s important to them about how they enjoy their retirement? What’s important to them about the kind of legacy they leave? Be truly interested in people and accomplish this important task. Learn to be a good listener. If you care about people and listen to their stories, they’ll keep sharing more and more with you. The more they talk, the closer you’ll get to wherever it is they want to go. Along the way, they’ll begin to trust you because you’re listening and seeking to understand them. You’re not judging. You’re not focused on your opinion or limited by your biases — you’re only trying to learn theirs — and this makes them feel appreciated and understood. People want to tell someone about their hopes and their worries and their dreams 48

InsuranceNewsNet Magazine » August 2021

quiet mind. “Keep an open heart” means to listen with love and gratitude. Take in this person’s views, opinions, cares, judgments and hopes and all that’s of importance to them. Just listen. “Keep a quiet mind” means not allowing personal biases, opinions or judgments to interfere with thinking. Seek to do the right thing by this person; learn to understand them, even when you do not agree with them. This takes time to master. We’re accustomed to letting our biases affect the stories we hear. We’re accustomed to thinking too much about what we care about instead of considering what others

5 Core Values Aloha Advising ——————————————of——————————————

1. Mahalo - “Thank you.” With Mahalo, you are grateful for the people in your life, and you appreciate your differences, too.

2. Aloha - “Hello” or “good-bye.” Seek to live and work with love. 3. O hana - “Family.” Treat others the way you would treat members of your own family. 4. Pono - “Do the right thing.” Your good intentions in your plans and actions will reflect your desire to do right. 5. I mua - “Always move forward.” Keep learning and continuing to grow. Source: From Aloha Financial Advising: Doing Good to Do Better for Your Clients and Yourself by Stephen Kagawa, 2021, Lioncrest Publishing

3 SIMPLE STEPS TO CREATING LASTING RELATIONSHIPS BUSINESS care about. Our experiences, thoughts and ideas like to raise their voices. Unless the story we hear is exactly like ours, we don’t see it for all its beauty. How often is another person’s story exactly like mine? Never. We seem so similar on the surface, and we can be so different at the core. So I train myself to keep an open heart and a quiet mind.

3. Prepare For Them, Not For Yourself

We’re often told what we’re supposed to sell and how we’re supposed to sell it. At the end of the day, though, what’s most important is finding out what matters to the people we serve. Discover what’s important to them and let go of everything else that you know. When I began my career in financial advising, proper preparation for every meeting was everything. I had to have the right portfolio of materials and array of products and the right legal forms, and I had to understand all the tax codes, regulations and more. I still believe in being prepared, and I study constantly to keep up with those

things. Bringing a lot of materials to an initial meeting, however, isn’t necessary or even important to me today. If a prospect says they want specific information on a specific product or topic, of course I show up prepared to discuss it with them. Still, I don’t prepare the way I used to. I don’t show up for an initial meeting with the intention of necessarily presenting a prearranged set of sales concepts or selling them any specific product. Today, my preparation is much simpler. I take a moment to tell myself why I’m meeting with this prospect. You can call it a prayer, or a meditation, or anything you like. Basically, it’s a reminder to myself that this isn’t about me. I remind myself that I’m blessed with the opportunity to meet this unique person and learn of the life they seek, and I ask for the strength and the resolve to know that the true guide of how I may add value is within the person in front of me. Their lives, and what’s important to them, will guide us to the right answer for that person.

Start Doing This Today

Preparing this way takes very little time. Still, you must train yourself to do it, and you’ll need practice to do it well. This method works anywhere, anytime and anyplace in the world. Try it for your next call with a prospect. The first time you do, feel free to bring everything you typically would and leave it all in your briefcase. Let a notepad and pen be your tools, along with your eyes, ears, questions, and your attention to the person in front of you. Be intentionally present for them. They’ll tell you everything you need to know — and my guess is you’ll find that it becomes the start of a beautiful and lasting relationship. Stephen Kagawa is CEO of The Pacific Bridge Companies, an organization comprised of various international firms spanning the U.S. and Asia that helps financial advisors guide their clients wherever their lives may lead. He may be contacted at stephen.kagawa@innfeedback.com.

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August 2021 » InsuranceNewsNet Magazine

INSIGHTS

The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.

Inspiration Shifts As The World Adjusts To The Pandemic An advisor finds an additional source of purpose as COVID-19 forces her to change the way she runs her practice. By Janet N. Ng

ur decisions that spring from inspiration or motivation are what build a strong foundation for success, especially in self-driven work such as financial services. When we are ultimately responsible for so much of our own professional progress, it’s important to be anchored by a day-to-day sense of purpose. For some people, those anchors might remain constant over time. But for many — myself included — they shift as careers and life change. If there’s anything that the COVID-19 pandemic has taught us, it’s that those shifts are not only OK — they’re normal. And just as we must be ready for our life circumstances to change, we also must be ready to change the way we use them to propel our professional success.

Adapting To Involuntary Change

When COVID-19 cases first arrived, we had three days’ warning before a national lockdown took effect in the Philippines. Needless to say, 72 hours to prepare for such an indefinite, drastic shift did not offer much time for many Filipino businesses to adjust. Like many people, I began the lockdown by temporarily not working. I also faced another dilemma: Before the lockdown, I thrived in an environment where I could be physically present with my employees and meet with my clients in person. Those direct interactions gave me my purpose. So with that environment no longer possible, I was forced to find new reasons to go back to work and keep my practice going. In considering my broader professional purpose, I realized that what I wanted more than anything was not only for my clients to know their policies and protections were 50

still in force, but for them and my employees to know that I was personally still there as well. Not only would I still be available, but I would also seek better ways to serve my clients and grow my practice. As an advisor, I was committed to adapting to the world around me, even through a change as sudden and severe as a global pandemic. As I first started back to work, I drew on this new motivation to help my team and clients get through the pandemic together. To offer a more responsive experience for clients, we placed each person into their own end-to-end encrypted group chat with me and my staff. I also decided to go bold and expand my client base. I hired a freelancer to find prospects online. After his contract with me ended, I hired him back as a scheduler to proactively coordinate with clients and ensure all clients regularly heard from me.

Changing Your Own Direction

These changes were well received and improved the communication between my office and my clients. But they also resulted in burnout after months of virtual communication, changes to both my personal and professional lives, and constantly trying to think of new ways to grow my practice. Even the tools I had been so inspired to deliver did not provide enough inspiration of their own to keep me going. With work from home likely to be the norm for some time to come, I needed to find another source of purpose. My children have always been my inspiration to work hard. But with all my children soon to be overseas for work or school, I will have much more time on my hands and nobody to take care of. As someone who went from being a daughter

InsuranceNewsNet Magazine » August 2021

in a traditional Chinese-Filipino household to a wife and then to a parent, this will be a huge shift for me. Although I have always been a woman who charted her own path against some traditional norms, this change will give me a level of personal freedom I have not had in a long time. In recent months, I have drawn motivation from this expanded ability to choose my direction in life. And unlike the changes COVID-19 forced on me, these are ones I’m actively seeking out. I recently decided to start a book club for the alumni of a Philippines-based wealth management learning and accreditation center. This addition to my career has allowed me to deliver top-quality service to my clients, while also helping other financial advisors do the same. I have also been offered a position on the Life Happens Global Committee, giving me even more space to help my fellow advisors grow in their careers. Former MDRT President Regina Bedoya has, in turn, been a huge source of encouragement and support for me these last few months, helping me push through a lack of self-confidence. Whether change comes for us or from us, our lives and careers are always evolving. By being ready for momentous shifts, we as advisors can take the first, most important step to identifying new sources of inspiration that can take our careers in directions we had never before imagined. Janet N. Ng, FChFP, CEPP, CWP, is the executive director of Bridges-PH. She is a 12year qualifying and lifetime member of MDRT. She may be contacted at janet.ng@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.

Serving Clients’ Best Interests Means Political Involvement Why political advocacy leads to laws and regulations that benefit your clients. By Mike Peters

he longer I’ve been an insurance and financial services professional — and I’ve been a producer for more than 30 years and was in operations for about 10 years before that — the more I’ve come to realize how political advocacy is crucial to my success and is an important part of serving the best interests of my clients. Our advocacy influences legislation created and passed by lawmakers, at both the federal and state levels. This legislation directly affects how we as insurance and financial advisors do business and even whether we can do business. I serve a mostly middle-income clientele in the Tampa-St. Petersburg area of Florida. My clients rely on the products and services I provide to improve their financial well-being, protect themselves against life’s inevitable financial risks, prepare for comfortable retirement, and create financial legacies to leave their loved ones. When I speak with regulators or legislators about issues that affect my business, those same issues affect the Main Street Americans I serve. I’ve come to believe that representing their interests goes beyond creating great financial plans to include influencing public policy on their behalf and ensuring I can stay in business to continue serving them.

Making A Difference

The importance of being politically involved really hit home early in my career in 1992 when Hurricane Andrew devastated much of Florida, causing more than $25 billion worth of damage in my home state. At that time, property/casualty insurance made up 25%-30% of my business, and politicians were putting the insurance industry under intense scrutiny. Some insur-

ance companies considered getting out of the P/C business in Florida, and their professional lobbyists weren’t making much headway in Tallahassee or Washington. I had been a NAIFA member for several years, but this was when I realized that when it comes to advocacy, there really is strength in numbers. My NAIFA colleagues and I contacted our legislators and showed them how we really were making a difference in the lives of families and business owners impacted by Andrew. We needed laws and regulations to help us do our jobs, not make them more difficult. More important, that’s what our clients needed. That experience really opened my eyes. I understood that a few people in key positions in legislative bodies can have a major impact on my livelihood and the well-being of my clients. And we, as insurance and financial professionals, can make an impact on those key decision makers.

Advocacy Is In My Job Description

Over the years, I have talked to other agents and advisors who say they want to stay out of politics or that they are intimidated by the political process. I tell them I’ve come to understand that we must be part of the discussion. There’s an old advocacy saying: “If you don’t have a seat at the table, you may very well be served up on the table.” Other professionals are advocating for their businesses; it’s part of my job to do the same for my business and my clients. If what I do is beneficial to my clients, and I strongly believe that insurance and financial planning is a very noble calling, then ensuring that I am able to continue providing people with financial security ranks pretty high in my job description. It’s true that a first meeting with a legislator can seem intimidating, but you quickly learn that our elected officials are people just like you and me. But there’s one major difference: They don’t know nearly as much as you do about your clients’

insurance and financial services needs or about how the products and services you provide make your clients’ lives better. We are the ones who can tell compelling stories about how legislation affects the families and small businesses we work with. The vast majority of lawmakers want to hear our stories and learn how they can help our clients in their districts. They got into public service to make a difference on behalf of people in their communities. They want to help. If you think about it, that’s not much different from what we do, and many of us have a similar motivation.

Taking The Next Step

For me, political involvement has become a professional and personal passion. I have gone from attending a few group meetings with legislators to creating meaningful relationships with lawmakers to serving in advocacy leadership positions with NAIFA. Within the last year, I was elected to the city council of New Port Richey, Fla. I’ve always had a yearning to serve. Political involvement opened my eyes to how leaders can change things and impact people. It has given me an understanding of the legislative process and the importance of listening to both sides of issues. By advocating with NAIFA, I have given back to my industry and helped ensure consumers have greater flexibility and more financial services choices. As an elected official, I am trying to give back to my local community and come up with solutions that serve most of the people most of the time. I hope my example might influence other insurance and financial professionals to get involved. Mike Peters, CLU, ChFC, LUTCF, owns a State Farm agency in New Port Richey, Fla. He currently serves on NAIFA’s Government Relations Committee and is the national Grassroots Involvement Chair. He may be contacted at mike.peters@ innfeedback.com.

August 2021 » InsuranceNewsNet Magazine

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

Pandemic Increases Interest In Combination Products More consumers expressed interest in purchasing life insurance with long-term care benefits as COVID-19 forced people to think about how they want to receive care in the future.

Percentage Who Would Consider Buying A Life Combination Product (By Generation)

By Austin Tewksbury

he 2020 pandemic affected consumer interest and awareness of financial products in many ways. LIMRA’s consumer sentiment survey showed increased consumer concerns related to financial security and an increased interest in life insurance as COVID-19 made the risk of illness and mortality top of mind for many. Interest in combination life insurance/long-term care products, which are a solution for consumers’ life and long-term care needs, also increased during the pandemic. In early 2021, 26% of consumers were extremely or very likely to consider a combination product when shopping for life insurance — up from 17% only two years ago. This jumps to 36% of people who are facing high levels of stress as caregivers, either for adult relatives or for children. These consumers recognize better than anyone the value of planning ahead for long-term care needs. We were surprised to find that interest in these products decreases with age. Millennials are the most likely to consider combination products. This group probably finds the concept of a one-stop solution to life and long-term care needs appealing. They also are less likely to own life insurance, and many in this generation and in Generation X are part of the high caregiving stress group “sandwiched” with young children at home and older relatives who may need care. The expense of long-term care and the desire for an economical form of coverage are key reasons consumers are interested in combination products. Among respondents who were at least “some52

Source: Consumer Perspectives on Long-Term Care and Insurance, 2021

what” likely to consider these products when shopping for life insurance, 35% cited concerns that long-term care costs would deplete or exceed their savings, and 33% thought combination products would be a more economical use of their current assets. When asked about the attractiveness of particular features of long-term care coverage, the second-most widely valued feature was the ability to lock in premium rates that will never increase (cited by 41% of respondents). Above any other feature, consumers valued the ability to choose to receive care either at home or in a facility (43% of respondents). Overall, consumers would prefer to receive care at home, with 31% responding that they would prefer staying at their own, a family member’s or a friend’s home to receive care regardless of the costs or level of care needed. An equal percentage would prefer receiving care at home until transitioning to a facility as needed based on cost or care needs. Millennials showed the strongest preference for the option of staying in their homes before transitioning to a facility, while baby boomers and Gen X consumers were more likely to prefer exclusively at-home care. Just over 1 in 5 respondents

InsuranceNewsNet Magazine » August 2021

were not sure of their preference, though 25% of Gen X consumers were uncertain. These consumers may have still not yet felt the need to plan for long-term care, and they are just beginning to take on caregiving responsibilities for their parents (something baby boomers may have already experienced). Even in the midst of the COVID-19 pandemic and its severe impact on nursing homes, the majority of consumers preferred in-home care for comfort as opposed to safety concerns. Three out of four people who preferred to receive long-term care at home (exclusively or until transitioning to a facility) agreed “it would be more comfortable,” while only 42% were concerned with the safety of assisted living and skilled nursing facilities. This result reflects some optimism among consumers back in January that long-term care facilities would remain a safe choice in the future. And even so, the comforts of being at home can’t be overvalued. Austin Tewksbury is associate analyst, product research, for LIMRA. He may be contacted at austin.tewksbury@innfeedback.com.

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InsuranceNewsNet Magazine - August 2021

Articles inside

Sleeplessness Carries High Price For Businesses, Individuals

Black Americans Show High Levels Of Financial Well-Being

3 Simple Steps To Creating Lasting Relationships

The Impact Of Genetic Testing On Life Insurance Coverage