InsuranceNewsNet Magazine - November 2021

SPECIAL SECTION: TECHNOLOGY THOUGHT LEADERSHIP • PAGE 27

Tech Month Double Feature

Beyond Zoom: Continuing The Technology Journey PAGE 21

Finding Freedom Through Technology And Automation PAGE 24

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IN THIS ISSUE

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NOVEMBER 2021 » VOLUME 14, NUMBER 11

FEATURE

Take Your Technology Up A Notch

By Susan Rupe and John Hilton Zoom is so 2020. How advisors are raising their technology game.

20 INFRONT

IN THE FIELD

8 C ourts Left To Clean Up IUL Sales Fraud

14 Manhattan Project

By John Hilton An independent marketing organization faces 38 pending lawsuits in state and federal courts.

By John Hilton Barjes Angulo started his career as a bank teller, but he knew he wanted more for himself. His journey led him to establish a Midtown Manhattan advisory firm that bears his name.

2021 TECH GUIDE Feature-forward digital innovations that give consumers unprecedented access to products, services and information. • PAGE 27

LIFE

34 Premium Financing: Helping Heirs With Estate Taxes

INTERVIEW

10 An Unstoppable Mindset

By Matt Levesque Premium loan financing may be the solution to challenging estate planning scenarios involving individuals who cannot divert cash to pay for life insurance.

Rebecca Korn wants you to finish 2021 strong and head into 2022 with a plan to have an even bigger year, while creating enough space on your calendar to do all the things you want to do.

online

www.insurancenewsnetmagazine.com

ANNUITY

42 C apped And Uncapped Annuity Strategies: Weighing The Options

By Doug Wolff It’s important to make sure your clients safeguard a portion of their money in the event a drop in the equity markets occurs.

HEALTH/BENEFITS

46 Why Offering DI Can Transform An Employee Benefit Package

By Scott Towers Benefits brokers can help employers implement a comprehensive DI plan and relay the value of enrolling.

ADVISORNEWS

50 Taking The Long View On Long-Term Care

By Ron Mastrogiovanni Encouraging clients to adequately plan requires knowledge of the cost of care and the likelihood it will be needed.

INBALANCE

52 Don’t Get Dragged Into The Social Media Wasteland

By Susan Rupe Social media can be a wonderful business tool, but it can take a toll on your mental health if you’re not careful.

BUSINESS

54 Six Tips For Building Trust With Clients

By Lyle D. Solomon Education, communication and positivity are key attributes that will create a trusting client relationship.

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WELCOME LETTER FROM THE EDITOR

Tech: More Than Shiny Things

L

et’s take a look back in time to a year that seems so far away but really wasn’t — 2019. It was the last year of “normalcy” we experienced. And it holds some clues to the environment in which we work today.

Just for the fun of it, I Googled “office technology of 2019” and found a website that predicted the Top Five tech trends to watch that year. They were: 1) cloud computing, 2) blockchain, 3) the end of the open office floor plan, 4) increasing use of mobile devices, and 5) the rise of remote work.

Cloud computing is old news, you rarely hear about blockchain these days, and no one cares what kind of floor plan your office has when you and most of your staff are working remotely. But the increasing use of mobile devices and the rise of remote work are at the forefront of today’s insurance practice.

Zoom is so 2020. InsuranceNewsNet’s November issue takes a look at advisors who are going beyond Zoom to incorporate technology into a practice that is increasingly remote and is serving clients who demand access to products, services and an advisor on their terms and on their timeline.

We found that advisors have a dizzying array of tech platforms from which to choose. The challenge is in choosing the tech that works best for their practice while ignoring the “shiny objects” marketed to them. And we also found that clients are more inclined to do business using their mobile devices. That means that carriers and advisors must make their information accessible by smartphone. For example, it may not be feasible for a client to download a large file or use DocuSign on a phone.

Technology is much more than incorporating the next new thing into your life. It’s figuring out the best tools to employ in order to get the results you want and that your clients need.

And technology continues to march along. A few years ago, I read an article written by a trade association executive who complained about those who live by the motto “That’s the way we’ve 4

always done things.”

He looked back on the 35 years he spent in the workplace and all the changes he saw in the office during that time: the personal computer, the fax machine, texting, email, etc. “If I continued to do things the way we’ve always done them, I’d be unemployable!” he wrote.

Finish Strong, Start Strong

We are nearing the midpoint of the last quarter of the year. For many of us, that means the holiday season is almost here. It also means we are running out of time to accomplish the goals we set for ourselves 11 months or more ago. On top of that, we are looking ahead to next year and planning what we want to accomplish.

Are you coasting through the final weeks of 2021? Do you feel like giving up on your 2021 goals already and skipping straight to 2022? Or are you trying to squeeze every last opportunity out of the current year while setting the stage for a strong new year?

Rebecca Korn wants to reassure you that no matter what your year looks like so far, you can have a strong finish to 2021 while planning for a strong start to 2022. Korn went from being homeless to being a top insurance producer before she turned her attention to coaching others in the business. In this month’s

InsuranceNewsNet Magazine » November 2021

issue, she describes how you can have an unstoppable mindset and sprinkle some magic into your relationships with clients and prospects.

We also share the story of Barjes Angulo, who started his working life as a bank teller but was determined to do something bigger with his life. He absorbed as much as he could from those around him and eventually founded a Midtown Manhattan practice that bears his name. Read about his approach to the business and how he and his wife formed a successful working partnership.

November is a time when the brilliance of fall gives way to the darkness of winter for many of us. Thanksgiving gives us a reason to pause and count our blessings before the frenzy of the holiday season scoops us up.

Whether your year has exceeded your wildest dreams or has left you disappointed, remember that somewhere there’s someone who was able to keep a roof over their head, send their child to college or have a secure retirement because of you. They may not express their thanks to you, but know that they are grateful for the advice you gave them.

Have a happy Thanksgiving!

Susan Rupe Managing Editor

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Sponsored Content

Guiding Agents to Success, Simplicity is Focusing on Education, Value, and Partnership Nathan Jacobson, Executive Vice President of Simplicity Life, is a second-generation insurance executive who started his career as a producer. Today, Nathan leads the life insurance division of Simplicity Group, working with all the Group’s Partners who specialize in life insurance. In this Q&A, Nathan explains why he is excited about the future of our industry and how Simplicity’s core principles help create an exciting path for advisor success.

Q: Tell me about Simplicity. What excites you about your role?

A: At Simplicity, we like to say that we are “process-driven and principles led.” With over 40 Partners, we are building one of the nation’s leading financial service distribution firms, centered on the hallmarks of education, value, and partnership. Today, Simplicity offers a high-value wealth management platform, built on a proprietary technology; we are one of the largest annuity providers, and we are the largest independent life wholesaler in the country; and, finally, we have great offerings to address asset-based longterm care needs.

In addition, we have 30 sales offices and more than 40 senior sales leaders across the organization, each of whom is dedicated to supporting agents and advisors across wealth management, annuity, asset-based long-term care, and life insurance. Ultimately, our work in service of our agents and advisors not only helps them grow their businesses but provides them the

tools and processes to guide critical conversations with Americans who deserve sound, holistic financial planning advice as they prepare for retirement.

Q: Who does Simplicity work with in the Life space?

A: Simplicity works with independent agents, BGAs, and financial institutions. Our team is equipped and experienced in dealing with business partners of all sizes. We pride ourselves on our ability to employ a customized approach to each client and provide them with the tools and resources they need to be successful and help their clients.

“The life insurance sector is about to embark on a new era of growth, underpinned by the complete digital transformation of the sales experience.

New digital journeys and interactive technology is now demystifying life and annuity products, driving better client discussions, and arming financial professionals to grow their business.

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Q: Share some examples of how Simplicity’s focus on education benefits business.

A: We believe strongly in financial literacy and we design our educational programs for agents and advisors, so that they, in turn, may help their clients understand the risks and opportunities of retirement.

All of our programs — including our new “Principles of Retirement Planning” program — are designed to help our agents and advisors simplify the historically complex conversations required to help consumers prepare for, and live in, retirement.

At Simplicity, we know that education activates positive change in clients’ lives and agents’ businesses. Our Partnership is committed to providing educational marketing programs. In addition, we invest in compliance education programs and compliance support as this is an ever-increasing need for our agents and advisors.

Q: How does Simplicity help educate advisors by utilizing top experts?

A: Education and training is built into everything we do. We host Simplicity Life Universities for advisors approximately once per month. At these events, we feature one carrier partner so that advisors can hear from carriers directly. In addition, we feature fellow Simplicity Partners: Patrick Kelly, who is an unrivaled educator on the potential tax impacts of retirement planning; and, Jason Jenkins, who has the leading advanced sales training in the industry.

We also like to include expert keynote speakers to talk about often over-looked aspects of financial and estate planning, including the importance of life insurance as a planning tool. In the past, we have also discussed the importance of involving the kids and the next generation in any financial discussion, as well as many other important and timely topics.

Q: What does value mean to Simplicity?

A: The best products that provide the best value to consumers which are centered around their particular financial needs — it’s as simple as that. We depend on feedback from our agent and advisor partners, then work with our carrier and investment business partners to deliver a suite of products that address their particular needs.

In addition, Simplicity is focused on improving financial planning with new technologies. We are excited to marry our guiding principles with new digital sales tools. For example, we recently partnered with Ensight to develop a product that incorporates Patrick Kelly’s Tax-Free Retirement concepts. This platform has a simple illustration interface based on a limited set of

inputs: name, age, risk class, the amount of premium they can properly allocate, the horizon for investing, and the year in which they want to start taking distribution. That’s it.

In a matter of seconds, the agent can bring up a summary page pulled directly from the carrier illustration. For virtual meetings, advisors may copy and paste the link in a chat box or an email, and the client can get the fully interactive presentation on their computer. This platform allows agents and consumers to test various scenarios in a live environment but with actionable illustrations that can convert, at the click of a button, to new business. To me, the elegance of the platform is that it facilitates the presentation, illustration, and application in one appointment.

Q: Tell us more about how you leverage the other 40 senior sales Partners at Simplicity.

A: Partnership is a guiding principle at Simplicity and today we have over 40 senior sales Partners who together have more than 500 years of life insurance experience. In my position at Simplicity, connecting with the leaders and their teams to leverage their best thinking and making sure they know how to implement our new marketing programs, technologies, and carrier relationships is the key to our success. We are a large and growing company but we offer an unrivaled set of experiences and the distinguishing hallmark of our Partnership is that we work together to promote all our agents and advisors so that they can deliver education, value, and partnership to their clients.

Q: Finally, what are you and your agents getting most excited about?

A: Our agents and advisors truly appreciate our training events and getting an opportunity to chat with our expert speakers directly. We’ve seen agents and advisors have a ton of success utilizing Patrick’s TFR Insider program and Jason’s AST sales program. Moreover, with the launch of our new platform built with Ensight, we know that our agents and advisors are well positioned to have more success than ever.

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1871444-1021

INFRONT

Courts Left To Clean Up IUL Sales Fraud

Scottsdale, Ariz. based IMO Shurwest faces 38 pending lawsuits in state and federal courts.

How an independent marketing organization filed for bankruptcy over the sales of hundreds of indexed universal life policies.

By John Hilton

W

ith the insurance industry facing aggressive regulatory activity on several fronts, it isn’t a good time for an explosive, wide-ranging fraud involving hundreds of insurance product sales.

Yet that is exactly what is happening.

What began as a pension fraud scheme spread to the sales of hundreds of indexed universal life policies before being shut down by federal investigators.

Then came the lawsuits, which drove Shurwest, a successful Scottsdale, Ariz., independent marketing organization, to file for Chapter 11 bankruptcy Aug. 31.

Executives realized “there’s not going to be anything left,” one of the organization’s attorneys said.

According to bankruptcy documents, Shurwest faces 38 pending lawsuits in state and federal courts.

“We indicated to some of those outside counsel and some of the folks at 8

Shurwest that there may be a way to bring all this litigation into one forum,” said Michael McGrath of Mesch Clark Rothschild, a Tucson, Ariz., law firm handling the bankruptcy filing. “So that we don’t simply blow each other’s brains out litigating this until there’s nothing left in the cupboard.”

While most of the lawsuits are from policyholders, Minnesota Life sued Shurwest on July 12. Shurwest sold Minnesota Life products as a brokerage general agent from 2012 to 2020.

Minnesota Life, which also faces several lawsuits by policyholders, refunded premiums and rescinded more than 200 IUL policy sales once it discovered the fraud.

Agents altered applications on more than 1,000 policies sold through Shurwest between 2014 to 2018, Minnesota Life claims in its lawsuit.

A spokesman for Minnesota Life said the insurer does not comment on active litigation.

Descending Into Fraud

On Oct. 9, 2012, Shurwest was appointed as an independent general agency to sell Minnesota Life products. The relationship seemingly worked well for many years.

InsuranceNewsNet Magazine » November 2021

Courts documents put 2016 as the year things went south.

That year, Melanie Jo Schulze-Miller, national sales director of life insurance for Shurwest, began incorporating an IUL sales strategy using “structured cash flows,” according to court documents.

Minnesota Life had banned structured cash flows, which prosecutors say are nothing more than a pension scam.

Scott Alan Kohn, 67, is behind the fraud, according to the U.S. Attorney’s Office in South Carolina.

Kohn, being held in Spartanburg, S.C., faces 20 years in prison for the federal offenses.

In March, a federal judge ordered a $501 million judgment against Kohn in a civil case.

Kohn Kohn formed Pensions, Annuities and Settlements in 2011, which would later be known as Future Income Payments.

Prosecutors say his scam was simple: using various marketing efforts, FIP and Kohn solicited pensioners by offering the ability to receive a lump sum in exchange for a portion of their future pension payments. FIP called the practice “structured cash flows” and the company used brokers and insurance producers to find invesSchulze-Miller tors, often retired veterans, teachers and firefighters.

Unknown to many investors, the future pension payment terms required them to pay what often equated to an annual interest rate exceeding 100% over a fiveyear term.

At some point, FIP and Kohn coordinated the scam with Schulze-Miller, court documents say. Investors were urged to fund IUL policies with their FIP payment, ostensibly to replace the pension as a retirement plan. However, prosecutors say the new layer just created another opportunity for rogue agents and FIP reps to further gouge investors through hidden and high fees.

COURTS LEFT TO CLEAN UP IUL SALES FRAUD INFRONT

Big Commissions

According to court documents, SchulzeMiller earned more than $1.2 million in commissions directing business to FIP. She cooperated with investigators and pleaded guilty to felony conspiracy to defraud in December. Schulze-Miller agreed to forfeit nearly $180,000 and one vehicle, a 2017 Infiniti, as part of her plea deal.

The courts must decide whether Shurwest was aware of Schulze-Miller’s

and her team,” the lawsuit reads. “The applications were submitted directly from Ms. Schulze-Miller and her team to Minnesota Life without any further evaluation or oversight by Shurwest.”

But Shurwest’s attorneys say their client cannot be liable for something they didn’t know anything about.

“Minnesota Life has looked at us and said, ‘If we’re liable, then you have to be liable,’” said attorney Michael McGrath.

We indicated to some of those outside counsel and some of the folks at Shurwest that there may be a way to bring all this litigation into one forum, so that we don’t simply blow each other’s brains out litigating this until there’s nothing left in the cupboard.”

— Michael McGrath of Mesch Clark Rothschild law firm activities and, even if they weren’t, whether they are still liable. What is known is that Schulze-Miller formed her own company called MJSM Financial, which handled many of the fraudulent sales, according to court documents.

U.S. District Judge Susan R. Bolton sided with Shurwest in a lawsuit brought by its insurer, Landmark American Insurance. Landmark failed to show that Shurwest participated in Schulze-Miller’s conduct, the judge ruled, or that it had been aware it would face lawsuits before it bought its policy.

A federal judge in Minneapolis will face a similar liability claim brought by Minnesota Life.

Among its claims, Minnesota Life alleges that Schulze-Miller and Shurwestaffiliated agents “scrubbed” IUL applications and altered them to overstate the income and net worth of the applicants, while obscuring the “structured cash flows” arrangement.

Minnesota Life claims the policy applications were altered on more than 1,000 policies sold through Shurwest between 2014 and 2018. The insurer said 222 of those policies were linked to an investment in FIP. “Nobody at Shurwest conducted a further review of the applications after prospective policyholders submitted their applications to Ms. Schulze-Miller

“But I think, at least the Minnesota life lawyers we deal with, understand that, like them, we too are a victim. We had a rogue employee who set up a business we didn’t know anything about.”

Scheme Falls Apart

According to its lawsuit, Minnesota Life began receiving policyholder complaints early in 2018. After discovering the FIP funding scheme, the insurer offered to rescind all those policies and refund premiums. A total of 210 IUL policies had been rescinded as of the lawsuit filing, Minnesota Life said.

Minnesota Life prohibits the use of structured cash flows to fund life insurance policy premiums because the insurer loses money on each sale of an IUL policy that results in an early lapse, Minnesota Life explained in the lawsuit.

“Financial underwriting guidelines are designed to prevent the sale of policies that are not affordable or are excessive in terms of needs and goals,” the lawsuit reads. “Had the applications for IUL policies submitted through Shurwest truthfully disclosed the source of funds for premium payment, Minnesota Life would not have issued the policies.”

As the calendar turned to 2019, Shurwest and Minnesota Life both made moves. Shurwest began branding itself as The Quantum Group. The two

companies appear to share the same address, phone number and employees, Minnesota Life noted in the lawsuit.

Deal Struck

According to the Better Business Bureau, Shurwest incorporated in 1993. Mark West served as president and Ronald Shurts as vice president. Shurts signed bankruptcy documents as general partner in the IMO. Neither man is listed as an executive with The Quantum Group.

In March 2019, Shurts and Minnesota Life reached an agreement for Shurts to pay Minnesota Life $200,000 up front, and then $50,000 per month, later increased to $75,000 per month, the insurer said in its lawsuit. The money was intended to reimburse Minnesota Life for commissions paid on the rescinded sales.

“That agreement was ongoing, and I don’t know if payments stopped in July or if they stopped in August, but they can’t continue now that we’re in bankruptcy,” explained Isaac Rothschild of Mesch Clark Rothschild.

According to bankruptcy documents, Shurwest lists Minnesota Life as a creditor owed $2.15 million. That is the amount Minnesota Life claims it is owed in commissions it paid for fraudulent IUL sales, McGrath said.

Meanwhile, South Carolina courts continue to try to unravel the FIP fraud.

Greenville, S.C., lawyer Beattie Ashmore was appointed by a judge to try to recover the money that the investors lost. He filed nearly 90 lawsuits seeking about $30 million from financial advisors and insurance agents throughout the nation, the Greenville News reported in December.

Ashmore did not return a call or email for an update on those efforts.

“We understand that there are victims out there,” McGrath said. “And they are people that we wish to direct to the FIP receivership case back in South Carolina, because they have indeed been harmed.”

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.

November 2021 » InsuranceNewsNet Magazine

9

INTERVIEW

H

AN UNSTOPPABLE MINDSET Rebecca Korn describes how you can crush your 2021 and have a magical 2022 — An interview with Paul Feldman, publisher.

10

InsuranceNewsNet Magazine » November 2021

ow has your year been going so far?

Are you ready to give up on it and skip right to the new year? Or will you take advantage of every opportunity to hit your 2021 goals while there’s still time and plan for an even better 2022?

Rebecca Korn wants you to finish 2021 strong and head into 2022 with a plan to have an even bigger year while creating enough space on your calendar to do all the things you want to do.

Korn entered the life insurance business during a period in her life when she was homeless and broke.

She was on track to attend medical school when a divorce left her with $21 in the bank and forced her to live in her car. But she decided to use her experience to make sure no other woman ended up in the same situation. So she took a leap of faith and entered the life insurance business. It didn’t take her long to find success, crush her sales goals and rack up awards.

As she found success as an advisor, she discovered her true passion was in helping other advisors find their own passions. She founded Rise Reign Rule to help women in the business achieve their visions of an extraordinary, unstoppable life. The three aspects of Rise Reign Rule are:

1. Rise — The desire to drive toward goals and smash them, while leveling up to the height you know you need in order to attain them.

2. Reign — Creating and empowering your inner queen.

3. Rule — Creating a lifestyle that expands into a life full of love, happiness and success.

In this interview with Publisher Paul Feldman, Korn discusses why achieving clarity in your goals is so important to success and why you need to “come home to yourself.”

AN UNSTOPPABLE MINDSET — WITH REBECCA KORN INTERVIEW FELDMAN: How did you get into the industry?

KORN: I got into the industry by mistake, which I feel like most people do. I mean, nobody in kindergarten says, “I want to grow up and be in insurance or financial planning.”

I had studied pre-med, I had just taken my medical college admission test, I had $21 in my bank account, and I was living in my car. For all intents and purposes, I was homeless. My husband’s name was primary on all our accounts. But things didn’t work out and I left, never dreaming that he would freeze all our accounts.

I sat down with my grandfather, who was 86 or 87 years old at the time, and I was crying and I said, “I screwed up. I’ve been reading The Wall Street Journal since I was 3 or 4 years old. I’m not stupid with money. But I feel really dumb.”

And he said, “What are you going to do about it?”

As I sat there and thought about it, I decided I want to make sure this doesn’t happen to anybody else ever again.

New York Life called me, I went in for an interview, and I said, “Please give me a chance and I will not disappoint you.”

Little did I know that they were probably dying to have people walk in and say that.

But I broke every record that they had within my first year. I was absolutely determined to succeed.

I stayed in the industry for about seven and a half years. And it was dynamic. There were so many pieces to it. And you’re taught so much structure and so much rigidity that sometimes we forget to flow inside of our business. And that’s a piece that I think is pivotal. It’s when you’re really connecting with people that you have fun and you enjoy yourself.

FELDMAN: Think back to your rookie year. What advice would you give yourself?

KORN: First of all, it’s not all about the stats and it’s not all about whether your name is on the board every week. It’s about the collection of feelings you’re experiencing; it’s about how you feel about life in that moment. And being able to come home to yourself.

It’s not about fixing everybody, being everybody’s savior. You’re actually

nobody’s savior. In my case, the queen eats first. And being able to feed myself first — whether that was spiritually, physically, meditatively, sometimes just being able to get a cup of coffee — that was so important.

One of the most pivotal pieces of my career was when I gave seminars and I was so nervous because I often was the only woman in the room. I would center on the fact that all I need is one lead; all I need is one good connection. And that’s it — everything’s open.

Finally, I would say, stop putting yourself in a corner in the space of taking care of yourself. That part was huge for me because I was so focused on the numbers. I wanted my 100 lives, or I wanted a certain number of assets under management, and I needed to make that happen. Like I was a die-on-my-sword type of chick, which my managing directors loved. But managing directors don’t lead — they focus on production.

A managing partner is a partner who is there to manage where you are going in your business, not where you are going in your soul. So I would say you need to hire somebody who is on your side and who is willing to truly partner with you in every aspect of your being to be able to come home to yourself, because you need that accountability, whether it’s a therapist or coach or somebody you have as a mentor.

PAUL FELDMAN: We’re getting close to the end of the year. What can agents and advisors do to meet their goals for the year while there’s still a little bit of time?

REBECCA KORN: The biggest thing you can do is to take a step back. As someone once said, you have to slow yourself in a hurry. Because strategy is about the most important thing inside of your business, or else the business owns you.

As you’re beginning to step into the end of the year, you must be able to take a look back and zoom out about 50,000 feet and ask yourself, “What is really important right now? What is of utmost connection for me inside of my heart and my soul but also inside of my practice?”

The way that translates into a space of increased productivity is pausing and understanding what is needed as of right now, over the next couple of days, over

the next couple of weeks and then mapping it out and making a plan.

It’s kind of like when you’re driving around and you’re lost and you start to panic. That panic is not good for your overall situation. So it’s being able to pause and focus your energy.

That creates a massive difference.

You show up differently, you connect with your clients differently, you have some space inside your calendar. You have clear objectives for yourself and for your clients.

FELDMAN: What is the first thing that you usually focus on when you first start coaching advisors?

KORN: The first thing we look at is their calendar.

What I often find is that they’re scheduling appointments one after the other with no time in between, and they will compromise their boundaries consistently to make sure they’re pleasing the client or the prospect. That’s a problem because you are sacrificing every ounce of who you are for this person. That doesn’t serve the other person at your maximum capacity. And being able to think about the experience you provide for the client is critical.

Whether you create 15-minute breaks inside of your calendar or you start work at 10 a.m., you are allowed to do that.

One of the most beautiful things about finance is that you can create your own calendar. But the problem is that nobody actually does it on their own. They don’t step forward and say, “I’m going to connect these dots and create the vision of what my week is going to actually look like.” So they avoid it, and they do it by default. Then when someone says, “Hey, Mr. or Ms. Planner, I want to talk to you.

When can we chat?” What! No, I have some time next week at two o’clock. Does that work, by any chance?

That space is a space of confidence and self-assuredness. It’s a space of understanding where their boundaries are and having a fulfilling experience with a client. Now that client is committed, and you have a totally different kind of meeting. That feeling of presence and focus is where you start.

It sounds simple, but it’s not simple. We set it up differently than any “calendar

November 2021 » InsuranceNewsNet Magazine

11

INTERVIEW AN UNSTOPPABLE MINDSET — WITH REBECCA KORN coaching session” they’ll ever have. It changes their lives. They connect differently with their families and friends.

They actually have time to go to the gym!

FELDMAN: What are some keys to successful prospecting?

KORN: I’m a big proponent of prospecting in a flowing way, like breathing, where you desire to get connected to somebody but you’re not necessarily driving for business at first.

You want to get to know somebody as a soul to make sure they’re a good match for you. Because it’s when you’re building into that space of connecting with people and you’re not thirsty. And when I use the word “thirsty,” it’s kind of like dating.

“Oh, can I see you next week? How soon can I have another date?” I don’t know about you, but if I go on a date like that, I’m running in the opposite direction.

But if the person is like, “Oh, I’m totally in the moment. I just want to get to know you and connect with you,” now you have this openness. It feels great to you because you learned about this person as a human being. But it also feels great for the other person because people love to talk about themselves, right? So ultimately, it’s a win-win in that circumstance.

We’re so focused on the numbers. If instead, we would connect in a way that is true and honest to our soul, and our spirits are aligned, and it feels different than 99% of all the other financial advisors — then you have a sexy practice because you are dancing. And now you have these deeper relationships with people, and people are talking about who you are as a person, as well as what you do.

That locks your business into a space of massive productivity.

And it’s an unstoppable mindset.

FELDMAN: What else can you do to have an unstoppable mindset?

KORN: Part of it is creating these breaks of wonderment inside yourself and looking back into a space of asking yourself, what did I do? What have I done? And recognizing the fact that you have succeeded 100% of the time, to this present moment.

A lot of people suffer with doubt and what I call confidence-ish. It’s where you 12

The Black Friday Prospecting Message Rebecca Korn shared a tip for reaching out to clients or prospects at a time when other advisors are more likely to be taking time off.

O

n the day before Thanksgiving or the day after Thanksgiving, when nobody is meeting with you, I would have an “office day” or a “car day” and look at these things: the parts of your business that are working and you’re proud of, the parts of your business that are not working, and what you can do 1% better across the board and what an impossible target would be.

Make a list of all the prospects you haven’t closed. Take a look at them. Replay the meetings in your mind or replay them inside of your Zoom if you recorded them, and study yourself the way that athletes study themselves. Understand what kind of finesse you can bring to the table. And I want you to wish them a happy Thanksgiving.

Send them a text on the day after Thanksgiving that says something like, “I hope you have a beautiful weekend with your family and that your Thanksgiving was gorgeous.” They're not getting a text message like that from 27 other people, they're getting it from you. Now you're in the inner circle psychologically, because they associate the people closest to them to be messaging them those things at that point at that time. So that shift creates an opening.

Then in December, you can make a phone call, and you can say, “I just wanted to catch up with you.” Or “I've been thinking about you. How was your Thanksgiving? Did you get my text?”

And that opens such a beautiful space. They think, this person genuinely cares about me. And they're genuinely connected with me — they're not just looking for a transaction.

can perform in confidence, but you’re not really feeling it. Because when you’re around people who are faking it or not really connected with themselves, you can tell immediately. But when somebody is really connected with themselves, they understand who they are, they’re passionate about what they’re doing — now you have this extraction power. And that is truly where so much opens, so much begins to shift in your practice.

Because then people will start reaching out to you, and saying, “I don’t know

InsuranceNewsNet Magazine » November 2021

exactly what you do, but I could really use XYZ,” or “I see you’ve been in the practice for a while now. I was working with someone for a few years, but I’d really love to know a little bit more about what you do.” And that is a massive shift, because your language changes when you’re happier. Your internal vibe changes when you’re happier. And that is an attraction that is similar to that of performers or athletes. Someone who is so self-assured, they’ve already won, and you already know that.

AN UNSTOPPABLE MINDSET — WITH REBECCA KORN INTERVIEW This type of advisor has to have some sort of magic about them. And what’s funny about that is once we get somebody into that alignment, they will be told, “There’s something different about you.” What a compliment that is! That is such a beautiful space to be.

FELDMAN: What are some other ways you can stand out with clients?

KORN: Stop seeing yourself as a person that’s trying to sell something. See it as an opportunity and shift your mindset to “We’ve really focused on your plan. And I love how you have moved on it. Now I’d love to put something in place for your son, your daughter, your grandchild, your niece, whoever that you mentioned who is important to you. And that has been popping up in my world a little bit. Would you be open to chatting about that before the holidays, and we can make this a gift for them?”

This is great because it’s something that massively expands them into a space of abundance and unleashes so much more power and legacy.

I would talk to my clients about this, and we would make sure the client’s insurance was situated and create a special kind of paper to let the beneficiary know about it. People underestimate the value of a beautiful piece of paper, what it feels like and how there’s a connection there.

I would slide the piece of paper over to my client and have them write a letter to the beneficiary about what this means for them. And we would place it in an envelope and make a seal for it and give it back to them or place a photocopy inside their insurance policy.

None of us has paper anymore. You can scan that paper and keep it inside of their digital file. It takes one or two seconds for you to do, and it lasts a lifetime.

That is a beautiful piece to receive years later when the person has passed and now here you are as someone who is connecting generations.

FELDMAN: Tell me about some of the advisors you coach who are crushing it. What are they doing differently from other advisors?

KORN: It’s about cultivating the experience, going to who you are as a soul.

Because you are a unique being who is on this planet right now for a reason and who has gifts. I don’t want you to be anybody else. But when you come home to yourself and you’re able to be yourself unapologetically in such an open-hearted way, you’re not selling anything — you’re connecting a problem with a solution.

Having that confidence, that shift in perspective — it gives you a slightly different lens for you to see through. That changes the landscape of what you’re seeing ahead of you. Then the way you connect with people changes massively.

I have advisors who started with me as clients and said, “My biggest month had been $18,000, and we’ve increased income on average by $23,000 monthly.”

That is huge. But it has nothing to do with strategy or products. There is another branch to the business that we need to nurture and create some more blood flow into — and that’s the soul side of the business.

The soul side is where you can say, “I know who I am, and that is what I’m going to bring to the table with my clients.”

You attract the type of client you desire, and you are so special that the type of client you desire seeks you out to connect with you.

Don’t doubt that for a second. The one thing you can do is come home to yourself and don’t doubt that you are made for a specific reason and you are in this position for a specific reason.

When things get tough, we question everything and we want to give up. But you don’t realize what’s right around the corner and that you’re about to learn some sort of nugget. It goes back to when I was living out of my car and thinking how I was going to work my way out of that situation and my grandfather said to me, “You ain’t above nothing.” It’s the groundedness and the thought that “this is where I’m at” that create a combination that makes people successful.

FELDMAN: How are your most successful advisors getting leads?

KORN: So much of this is composed of who matches with whom. It’s about finding what types of people you like to work with.

I have one woman who reaches out via LinkedIn and hosts a podcast of

women who are crushing it in the executive space. She will shoot them an email via LinkedIn and say, “I’m so excited to be connected with you. I’d really love to feature you on the podcast.” Naturally, they connect, they have some sort of dynamic.

She’s not even asking for them to be a client, but boom! Next thing you know, they become a client.

I have a client who loves looking at different builders and launchers and likes to connect people with them. She connects with builders, launchers, companies like that. So it’s about finding whatever people are really passionate about and connecting with those people and that community.

One of my clients talks about creating an intergenerational legacy with her clients. She tells her clients, “My goal is to create legacy for three generations in each of the families that I work with. Is that possible with your family?” And she’ll get referred to the mom and she’ll get referred to the child. That creates a stellar space because now it creates consistency in the flow of planning. Because now Mom has been situated, Daughter has been situated and so on. It’s a beautiful opportunity.

FELDMAN: This past year has been challenging. What did you learn from it?

KORN: The art of life flows in a way that is completely unknown to us. Being an expert in anything is our biggest fault. It’s our ability to step into a space as a newbie that allows us to discover things on the deepest level.

I was difficult to coach because I’m stubborn and I love to drive forward super hard. And I loved crushing goals. But when you arrive in a space where you are open to discover anything, you start to learn something differently on a deeper level. You start to absorb on a deeper level where your discipline is aligned and that each decision that we make is shaping our future.

It’s about being vulnerable and open with the people you care about the most in a space that will light you up every day of the week. But also being vulnerable with yourself and not being afraid to face any of the dark corners of your soul.

November 2021 » InsuranceNewsNet Magazine

13

the Fıeld

A Visit With Agents of Change

MANHATTAN

PROJECT Barjes Angulo started out as a bank teller in New York City and worked his way to a Midtown advisory with his name on the door.

BY JOHN HILTON 14

InsuranceNewsNet Magazine » November 2021

B

arjes Angulo began his working life as a bank teller with a plan.

In hindsight, the plan was pretty simple and a familiar tale told by those who achieve great success. When Angulo began his career at a Citibank branch in New York City, he resolved to start work early and stay late, and to watch and listen to the successful people as much as possible.

“I think my shift as a teller started at 10 a.m., but I’d come in at 8:30 a.m. on my own time and just hang out with the bankers in their morning huddle, just to see what they do,” he said. “Or I would forgo my lunch and sit with one of the bankers or an investment guy. I’m like, ‘I’ll just sit here and be quiet and just listen.’”

It worked.

Angulo began climbing up the ladder and did not relent until he ended up at a firm with his name on the door and a full roster of clients. Today, he heads up Angulo Strategies, a Manhattan-based, full-service wealth management firm.

As the song goes, if you can make it in New York, you can make it anywhere — a cliché, but a remarkably apt one for a young advisor. As a world financial center, New York City is home to plenty of money, but also plenty of competition for those dollars.

Angulo, 44, has perfected the art of the relentless grind over nearly 25 years in the city that never sleeps.

“I don’t think competition has ever been an issue for me, because I come from a mentality of abundance,” Angulo said.

“I think there are enough New Yorkers to talk to and not enough advisors.”

‘You Need To Do Something’

As a young man, Angulo was unsure what he wanted to do — nothing unusual there.

He was also planning to marry, and it was time to grow up. His future wife nudged him just a little.

“She said to me, ‘I can’t bring you home as a starving artist. My mom’s an attorney and my dad’s an accountant. You need to do something in business,’” Angulo recalled. “I said, ‘OK, I’ll go work at a bank.’”

And a career was hatched. Angulo took to it immediately, seeing in the bank a place where people from all walks of

MANHATTAN PROJECT — WITH BARJES ANGULO IN THE FIELD

life and all sorts of career paths come in search of assistance to make their dreams become reality.

Angulo found financial lessons that enthralled him. He learned what a regular banker did, what an investment banker did, and the difference between retail banking and corporate banking.

“I started going to college at night, and I ended up getting my finance degree,” said Angulo, who graduated from Pace University in the city. “I just got an understanding of the landscape from a financial services perspective, which put me in a position to look at getting licensed.”

confident are big keys to building relationships that eventually turn into clients.

“I really talked up what I did, even though I probably had one appointment in an entire month,” he said.

One thing Angulo became known for is his look. He wears stylish suits and pays attention to the details of his clothing. He said it is important to appear professional and successful.

“I pride myself on being very impeccable with the way that I present myself in front of clients,” he said. “From the way that I dress to the way that I present the material. And I make sure that papers

Angulo and his wife, Katherine, with their daughter, Kyra, and infant son, Rainier.

While still working at Citibank, Angulo got his Series 7 and 63 licenses as well as life and health insurance licenses.

“Then I came to a point where I said, ‘I want to build my own book of business. I think that would be fun.’ If I knew better, I probably would have gone in a different direction,” he laughed.

He quickly learned that striking up conversations, keeping it real and being

are white and clean, and there are no coffee stains on them.

“I learned this a few years ago: Everything that a client sees tells a story about who you are and your business.”

Angulo got his start as an advisor with AXA Advisors, where he sold life insurance and starter mutual fund accounts. Around the same time, he also branded himself as Angulo Strategies,

which celebrated its 20th year in business early in 2021.

Since 2012, Angulo and his business have been affiliated with Eagle Strategies, a registered investment advisor and a wholly-owned subsidiary of New York Life.

“So in all truthfulness, this was because of a girl,” Angulo said. “But at the end of the day, I think it was a great decision because we’ve built a great practice.”

Bonding With Clients

Angulo Strategies is a full-service advisory and uses the full complement of investment and insurance products. A financial plan must be as diverse as the New York City demographics, Angulo said, as everyone has different financial needs and goals.

“We’re a process-overproduct office,” Angulo explained.

“The one thing that I’ve learned is I don’t know everything, and I can’t do everything for the client.

It’s a matter of how we keep everything contained in a way that the client sees the value of it, but we orchestrate all these relationships in all these resources that we have for them as well.”

To keep up in a fast-paced city, an advisor must not only know the latest products, trends and strategies, but also keep striving to improve service as well.

One idea Angulo developed is a quick 15-to-20-minute monthly conversation with his clients.

The short time commitment helps Angulo stay connected to clients who are seemingly always on the go.

“I think what happens — especially as a younger advisor, and I’ve been guilty of this — is that you want to do the right thing for the client. You want to do the best job for the client,” he said. “At the end of the day, it takes time. I’ve had clients who have taken 10 years to get their wills done, but they finally got them done.”

Angulo is comfortable blending personal and professional lives and connecting with clients in that way.

When he was single for a time after

November 2021 » InsuranceNewsNet Magazine

15

the Fıeld

A Visit With Agents of Change

Angulo enjoys the food at a 2018 client appreciation event in Harlem.

his first marriage ended, Angulo could connect with clients who had that kind of freedom in their lifestyle. Now that he is remarried with small children, he is again connecting with clients who are parents.

Angulo and his wife, Katherine, have even vacationed with some of their clients — although he is quick to note that the clients paid their own way, a nod to compliance.

Douglas Eaton of Eaton Financial Group likes the way Angulo handles clients.

“As an advisor, I find one of the things that is most important to me and what I try to teach people in the business is you need to consider your clients as family,” Eaton said. “[Angulo] seems to take that to heart. He treats everybody like his sister or brother, or aunt or uncle.”

Family Office

Katherine Angulo is director of client experience for Angulo Strategies. Sharing 16

an office with a spouse can be challenging, but the couple works hard at maintaining a work-life balance, Angulo said.

“The one thing that’s kept us successful is that we know when to turn it on and when to turn it off,” he added. “The moment we walk out of the office, we don’t really talk about work. We talk about our lives and our relationship and our kids.”

They are parents to two toddlers, who have kept Katherine away from the office in recent months. They live in the Inwood neighborhood at the northern tip of Manhattan.

Angulo describes his office as “in a state of flux” at the moment as he shapes his team. They have New York Life policyholders to service and financial planning services and transaction business to conduct.

Angulo is working on a rebranding to carry his practice into a new phase.

“Where I see myself going is focusing just on planning and then having someone, another advisor on my team, handle our transactional business,” he explained.

“So that’s the direction that we’re looking to go. I feel like I deliver more value on the planning side to clients.”

Regardless of the direction Angulo chooses to go, Eaton said he has the commitment to succeed.

“One of the great things about him is he always acts like he’s just starting out in the business in terms of learning,” Eaton said. “He could phone it in, but instead he’s constantly getting new designations and constantly improving his knowledge base.

He just wants to be a better advisor.”

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.

InsuranceNewsNet Magazine » November 2021

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Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements.

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

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November 2021 » InsuranceNewsNet Magazine

17

NEWSWIRES

Economist: Don’t ‘Let A Crisis Go To Waste’

The former chief economist of the World Bank said the COVID-19 pandemic has highlighted how the economic system isn’t working and said it’s time to rewire the U.S. economy. Joseph Stiglitz said, “We shouldn’t let a crisis go to waste,” in an interview with CNBC as he called for addressing inequality, the climate crisis, and the lack of resilience of the market economy.

The U.S. should, for example, invest in building “green” infrastructure that creates jobs and helps bring down inequality, Stiglitz said. “Once you put your mind to it, you realize that we can attack two or three of these problems simultaneously,” he said, adding that the U.S. has the labor and the capital.

Stiglitz said it would be “healthy” for the U.S. economy to raise taxes “a little bit” to finance “some of the things we need for the common good.”

Overregulation and overtaxing won’t see the West lose its competitive edge to emerging powers and China, according to Stiglitz. “I’m actually quite confident that this new agenda will actually strengthen us,” he said.

2020 NAIC: INSURANCE PRODUCERS RACK UP FINES IN 2020

Insurance producers accounted for nearly 42,000 fines in 2020, while 1,275 licenses were suspended and another 1,468 licenses were revoked. The data comes from the 2020 Insurance Department Resources Report published by the National Association of Insurance Commissioners.

When it comes to bad behavior, the news appears to be better.

State insurance departments received 246,900 official complaints and 1.3 million inquiries. That compares with nearly 290,000 official complaints and more than 1.6 million inquiries in 2018.

Licensed resident producers numbered nearly 2.3 million individuals and 239,585 entities. Nonresident producers DID YOU

KNOW

?

18

QUOTABLE

People’s wealth are up on two things, stocks and houses, and they’re both more or less tied to interest rates.

— Mitchell Goldberg, president of ClientFirst Strategy

consisted of nearly 7.9 million individuals and 506,159 entities. Those numbers are up from the nearly 2.2 million licensed resident producers and 228,393 entities in the 2018 report. Nonresident producers numbered nearly 6.6 million individuals and 456,908 entities in 2018.

significant toll on Social Security, slicing a year off the deadline for when the trust funds will be depleted and the program will no longer be able to pay out full promised benefits. The new deadline is 2034, and payments will be reduced to 78% of what was promised, the trustees said.

Medicare was also slammed by the pandemic, said the trustees, as income plummeted and expenses surged, with payments for testing and treatment of an older population particularly ravaged by the disease.

PANDEMIC EATS INTO SOCIAL SECURITY SOLVENCY

YELLEN: INFLATION HERE TO STAY — FOR A WHILE

Social Security’s trustees issued a stark report, saying revenue will begin to decline this year, crossing a critical fiscal threshold as the program begins a slide toward depletion of its trust funds in little more than a decade.

The trustees said that while Social Security’s trajectory has been grim for some time, the coronavirus pandemic and the economic downturn it spawned took a

Treasury Secretary Janet Yellen warned that inflationary pressures hitting the U.S. economy could last for a while. The various issues that converged to raise consumer prices are likely to pass, she added, but how long that will take is anyone’s guess.

Yellen noted the unusual nature of the current recovery from the shortest but steepest recession in U.S. history that lasted from February to April 2020.

Yet she remains generally optimistic about the state of the economy. “We’ve had extraordinary shifts in the pattern of demand away from services and toward goods,” she said. “I know the Fed is trying to sort through the implications of that.”

2/3 of corporate leaders said the slow pace of COVID-19 vaccinations is the biggest drag on the economy.

Source: LIMRA

Source: National Association for Business Economics Source: National Association for Business Economics

InsuranceNewsNet Magazine » November 2021

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COVER STORY

Beyond Zoom: Continuing The Technology Journey PAGE 21 20

InsuranceNewsNet Magazine » November 2021

Finding Freedom Through Technology And Automation PAGE 24

BEYOND ZOOM: CONTINUING THE TECHNOLOGY JOURNEY COVER STORY

Beyond Zoom: Continuing The Technology Journey Advisors, carriers and clients have become more proficient in using technology. But which tech tools are helpful and which are simply shiny objects?

a system, and you need to think about it.”

Mogen advised giving yourself time to learn what is the best solution for you and your clients.

“There are probably 5,000 pieces of technology that can be used, but there are different types of advisors and different types of advisors have different types of compliance requirements. So that will narrow down what you can use,” he said.

“But the other thing you need to look at is, what is the advisor doing? What segments of their practice are they looking to bring technology to?”

Mogen listed these four practice segments that lend themselves to technology:

By Susan Rupe

P

latforms and apps, software and systems — a dizzying array of technology solutions promises to make advisors more efficient, make carriers more responsive, and ultimately make clients happier.

But how do you determine what technology is useful and what is simply the next shiny object? And how do you get started using technology or, if you already have incorporated tech into your practice, how do you take the next step?

As the virtual practice becomes less of a novelty and more of a necessity, and as many advisors are ready to move beyond Zoom meetings into a more robust use of technology, it can be confusing to figure out what to add.

“Before you adopt any technology, you need to have a business plan and that

business plan needs to have a technology section,” said Rodney Mogen, brokerage director with MassMutual Financial Group in San Antonio, Texas, and chief puzzle solver at Solve Ur Puzzles.

“You need to know what you’re going to use technology for, how you’re going to use it, how much money you’re going to apply to it. You don’t need to add technology today. You can do it over a two-year, three-year, four-year period. But you need to have a process. You need to have

1. Marketing and branding, or what he calls “telling a story.”

2. Prospecting and creating prospects.

3. Sales.

4. Customer relationship management.

“For me, technology is all about making things simpler, reducing paper, and making sure that my team can have access to

November 2021 » InsuranceNewsNet Magazine

21

COVER STORY BEYOND ZOOM: CONTINUING THE TECHNOLOGY JOURNEY

Picking and choosing what works best for us has been trial and error.

It was easier for me to just plug and play and see whether something worked for us.”

— Rodney Mogen

information so they know exactly what we talked about with the client,” he said.

But although Mogen has incorporated a variety of tech tools into his practice, he said his practice did not become technologically heavy overnight.

“It took about eight years to get to the point where I am now,” he said. “We started with a CRM system, and I went through 19 of them until I found one that I liked and could integrate with different things and that met all the requirements of my compliance department.

“Picking and choosing what works best for us has been trial and error. It was easier for me to just plug and play and see whether something worked for us.”

Working For All The Stakeholders

Mogen said that if he were to start a practice today, he would begin the technology journey by making sure tools work for all the stakeholders. He would begin with asking his staff what they need. “And I would talk to someone at my home office to see about how we can interface with what they use,” he said.

He has a digital assistant in his practice, so using the kind of technology that the assistant also can adopt into their workflow is crucial.

And then there is the client.

“Some of the tools we used previously were a horrible interface for the client, and clients hated them,” he said. “Well, the client is the ultimate person in all of this, so if the client can’t open a document, for example, this isn’t going to work.”

Many of Mogen’s clients are millennials, who he said expect to conduct business digitally.

“They don’t want to come to an office.

22

They want to do business on FaceTime, they want to do business while they’re in their RV,” he said. “I just had a meeting where my client was on their boat sailing up the Potomac River for the winter. That kind of stuff wouldn’t have happened 20 years ago. But it happens now. So you have to be flexible.”

It’s not only that tech-savvy clients want to meet virtually. They don’t even want to use a computer, Mogen said.

“When you send the client something electronically, you have to make sure it can be opened on a phone because 90% of millennials don’t do things on their computers — they do them on their phones.”

He cited an example in which a client had difficulty using DocuSign on their phone, so a solution had to be found.

Although Mogen said his clients are on board with doing business digitally, not all of them want to do business the same way. So he gives them options.

“All of my first meetings with clients are digital — just because we can do more that way,” he said. “But one of the first things I do in that first meeting is ask clients, ‘How do you want me to connect with you? How do you want to have meetings?’ And I also ask them in our annual meetings. Some clients want to be more face-to-face.”

Part Of The Process

Technology only works when it is part of your process, said Angela Silbernagel, director of mission expansion with Real Wealth Marketing, Kewaskum, Wis.

InsuranceNewsNet Magazine » November 2021

“It’s not necessarily the technology but how you use that technology,” she said.

“If you don’t make your new app or your new software into a part of your checklist or process, you’re wasting your money because you’re not using it efficiently, you’re not using it to its full potential.

Or maybe you already have something that can do what that technology does, but you didn’t know it because you’re just chasing after stuff that looks cool or sounds great. So it’s not practical unless you work it into something that’s already a rock-solid process.”

“Start simple, get fancy later” is Silbernagel’s advice where technology is concerned. A scheduling tool is one example of that.

“If the technology costs you $10 a month and you previously spent hours going back and forth playing phone tag trying to get something scheduled, it’s really a no-brainer to start using something like that,” she said.

After the scheduling tool is in place, the advisor then can use it to send out automated reminders to clients or different messages to prospects, she said. The scheduling tool also can be incorporated into GoToMeeting or Zoom to schedule the online meeting and send out materials for clients and prospects to review prior to the meeting.

Advisors shouldn’t go it alone when incorporating their technology, but instead should work with an IT partner, Silbernagel recommended.

“One, it’s nice to have someone you can

BEYOND ZOOM: CONTINUING THE TECHNOLOGY JOURNEY COVER STORY

If you don’t make your new app or your new software into a part of your checklist or process, you’re wasting your money because you’re not using it efficiently, you’re not using it to its full potential.”

— Angela Silbernagel call when the internet goes out,” she said.

“But there’s also the security aspect. An IT partner makes sure that we’re doing security checks, we’re preventing data breaches as well as detecting them. We in the financial industry are targets. We have money and clients’ Social Security numbers and all types of personal information. It’s in the best interest of our clients that we are super secure.

“So it’s important that if you’re looking at technology, make sure that you’re using it compliantly, but also securely.”

Pathway Of Opportunity

COVID-19 restrictions forced many carriers to ramp up their digital offeringsm and now the industry faces what Jim Quinn calls a “pathway of opportunity.” Quinn is chief technology and information officer with the Insured Retirement Institute.

“For digital solutions, we’ve proven that both advisors and customers can use technology,” he said. “I think the past two years have proven that meetings and transactions can successfully be performed virtually. But I also think there has been a paradigm shift where we have to focus on the customer and the need — not just thinking about the transaction. You have to do it on the customer’s terms.”

Digital solutions must be integrated with strong oversight tools to meet compliance and regulatory requirements, Quinn said. “I think technology can deliver that full end-to-end need with endto-end solutions.”

Quinn called for more technology platforms that are fully integrated to create a smoother customer experience.

“When you think of the technology that’s out there, you have different

platforms that provide tools for inventorying your assets, setting your retirement goals, analyzing your investment risks and building your investment portfolios. The winners will be those who can do everything — or even if they don’t build everything, they can integrate all of that together.

“So you have CRM systems but they have to integrate with financial planning software. And then it has to integrate with the home office, back office and supervisory oversight so you have this seamless end-to-end process.”

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

Follow her on Twitter @INNsusan.

DON’T MISS OUR 2021 TECHNOLOGY THOUGHT LEADERSHIP SPECIAL SECTION PAGE 27

I think the past two years have proven that meetings and transactions can successfully be performed virtually. But I also think there has been a paradigm shift where we have to focus on the customer and the need — not just thinking about the transaction.” — Jim Quinn November 2021 » InsuranceNewsNet Magazine

23

COVER STORY FINDING FREEDOM THROUGH TECHNOLOGY AND AUTOMATION

Finding Freedom Through Technology And Automation

By John Hilton

T

echnology can do a lot of things for an advisor. Case in point: Julianne Hertel wanted to travel more, so she pursued a tech transformation top to bottom at her small firm.

That modernization of her advisory practice, Dream Big Wealth Strategies in Worcester, Mass., certainly helped serve clients better. But it also gave Hertel, 42, the freedom to chase her dreams to travel the world.

“I can travel more only if I can be detached from my office,” she explained.

“We have a family home in Ireland, and I want to be able to go for a month at a time or two months at a time. I’d like to be able to still communicate with clients and work with clients, without them necessarily knowing that I’m in Ireland at the time.”

Hertel set out with a few guiding principles: The tech had to improve communication and efficiency and be simple to use.

The result was so successful that when COVID-19 closed Massachusetts last year, 24

all that the staff members had to do was take their work computers home and they could function as if still in the office. The office reopened this summer, and Hertel is still committed to face-to-face meetings.

But the freedom to communicate across thousands of miles is taking the office to new heights.

“We have clients that live in various parts of the country that we’ve never met in person,” Hertel said. “We’ve only met them on Zoom.”

On their road to a frictionless future, Hertel started with tech solutions offered by her broker-dealer. And if she or her staff considered any other tech, they ran it past their B-D. The client experience and strict confidentiality were paramount.

The project had two parts: office-facing and client-facing. Hertel wanted to start with tech that increased office efficiency before introducing new technology to clients.

“Everything was built on top of everything else, and there were failures that were followed by successes that were followed by other failures,” Hertel said.

“It’s like two steps forward, one step back

InsuranceNewsNet Magazine » November 2021

— that’s absolutely how our evolution happened.”

OFFICE-FACING Slack

Slack is an online tool for instant messaging and communication within a group, such as an office. The team can message individual team members or create group messages. They can also create different channels or topics of conversation to help organize group messages.

Hertel’s team doesn’t send client information through Slack, but instead uses initials or first names if it is necessary to communicate about a client.

“Slack is so flexible that my study group has also adopted it for our communication,” Hertel said. “We can message each other one-on-one, and we also have channels for our group that specifically focus on things like accountability, business development, and health and wellness.”

Slack does not cost anything for the office because they use the free version, which works for a small organization.

FINDING FREEDOM THROUGH TECHNOLOGY AND AUTOMATION COVER STORY which was approved by their B-D. Inside the file cabinet, each client has a folder with subfolders with titles such as “bank statements.”

Each new account includes a subfolder for account opening or delivery paperwork, beneficiary forms, and other related documents. Staff members can access the files remotely, which came in handy when the pandemic hit Massachusetts.

A key benefit is realized during compliance audits.

“When the day of the year comes for our compliance audit, I no longer have to be available for hours at a time to pull hard files,” Hertel said. “Instead, my assistant will be provided with the list of client files that have to be reviewed, and she simply grants access to only those files.” eFileCabinet also enabled Hertel to cut down on the physical office space her practice needed. Even though her staff still keeps hard copies, most of the files have a maximum of 10 pages, she said.

Salesforce

Trello

Trello was also a gamechanger for the office because the project-managing software helped organize everybody’s work.

“To start with, I’m a list maker,” Hertel said. “I like to make lists with lists included. I love tons of details, and Trello helps with that. But it also keeps our office organized with all the different day-to-day activities.”

Hertel described Trello as a giant bulletin board that the staff can access. Staff members each have their to-do lists and other lists for tasks such as client preparation. On each list, people can create cards with specifics.

The cards can be dragged from one person’s list to another to assign tasks. Users also can create template cards to reuse, such as checklists. The checklist indicates which staff member is responsible

for particular items, such as pulling a life insurance policy brief, making sure the planning software is updated and writing investment reports. Once the template is made, it can be replicated in seconds for specific client meetings.

The team even used Trello to organize an office move last year.

Dropbox

Hertel’s team uses two cloud storage systems. Dropbox is for nonconfidential client information and other office documents such as marketing material and the employee manual. They pay a small monthly fee for the service because an IT consultant said they would get more storage and better security over the free version.

eFileCabinet

Confidential client information goes into eFileCabinet,

Hertel uses a version of Salesforce provided by her B-D for the office customer relationship management system. The CRM stores client data, such as names, addresses and dates of birth, along with being the team’s go-to location for policy briefs and other account specifics.

The staff logs clients as A, B, C, D and E to help guide the service and communication model for their clients, as Hertel said many practices do.

But they took it a step further by adding tags such as parent, grandparent, business owner, interested in socially responsible investing, retiree, and most recently, clients who are using their bucket system. At the beginning of each quarter, a staff member will run a report for everyone tagged in the bucket system for a check-in.

“We’ll also run a report on all of our clients that we’ve tagged as grandparents,” Hertel said. “We then send all of those clients a simple message wishing them a happy Grandparents Day. We do the same thing on Mother’s Day and Father’s Day.” There’s no limit to the types of tags that you can use, she said, adding that she knows advisors who tag clients based on their alma mater or their hobbies.

November 2021 » InsuranceNewsNet Magazine

25

COVER STORY FINDING FREEDOM THROUGH TECHNOLOGY AND AUTOMATION

Otter

This is an online digital service to transcribe notes that can be then transferred to other software.

“For example, after I meet with a client, I open the Otter app on my phone,” Hertel said. “I then will dictate the notes from the meeting, including some of the softer things that I may not have written down, such as they’re about to travel to Italy or they just adopted the dog.”

CLIENT-FACING RingCentral

This is a voice over internet protocol, or VOIP, system that works with their desk phones. The system doesn’t feel any different from a traditional phone system, Hertel said. But they also have the RingCentral app on their cellphones for when they are not working in the office.

Anybody on staff can be on the other side of the world speaking with a client, as if they were sitting at their desk.

“This was the case once I was taking a train from Prague to Budapest and I was speaking with a client on the app using the Wi-Fi on the train,” Hertel said.

“And the client had no idea that I was in Eastern Europe rather than in western Massachusetts.”

The phone system transcribes each voicemail and sends an email with both the text and audio file. Hertel’s voicemail tends to be service-related and best handled by a staff member. She forwards the email to the appropriate staff member to follow up with the client.

Calendly

This calendar software was one of the most impactful technologies the office adopted to improve efficiency and the client experience, Hertel said.

Calendly integrates with Outlook as the calendar in their office. Staff members have to update the calendar assiduously to be sure clients don’t double-book.

The system eliminates the back-andforth frustration that often accompanies scheduling.

The software creates a link that brings clients to a website that asks what type of meeting they would like, such as a 26

Technology can be intimidating for some clients. We want to hold their hand and walk them through before they get frustrated by any of it.” — Julianne Hertel 30-minute office meeting or a 60-minute Zoom meeting. They can view any available openings on an advisor’s calendar but not any other meetings. Then they can click on a slot, type in their email address and add any comments. It appears almost instantly in the advisor’s and client’s calendars. Hertel usually meets with clients on Tuesdays, Wednesdays and Thursdays, so she set those parameters so clients can see availability only for those days.

On the day before the meeting, Calendly sends clients a reminder email that they can use to reschedule or cancel if they need to.

“I often get an email from a client asking to schedule a meeting, and I usually respond with ‘Absolutely! Would you like to send some times that are good for you?’ Or, ‘Here’s the link to my calendar.

Why don’t you pick a time that works best?’ Almost every single time, the client clicks the link and picks the time on my calendar, eliminating the back and forth,” Hertel said.

eMoney Advisor

This is the planning software approved by the practice’s B-D. With eMoney, the staff can create financial plans, analyze recommendations and aggregate accounts, just like other advisors do.

Hertel said her team also uses eMoney to enhance the frictionless experience.

“We walk clients through it and show them the best way to use it,” Hertel said.

“When they first open the dashboard, we will already have linked the accounts that they have with our firm. We encourage them to also link their 401(k) or other types of accounts that they have that are not under our management. We offer to have a Zoom meeting with them if they would like to be walked through the various steps and capabilities.”

The team created a process to follow up with clients who have not set up their accounts, which Hertel said can be common. First, Hertel sends them the welcome email, which explains why

InsuranceNewsNet Magazine » November 2021

they should set it up and how it will help them. Then a financial planning assistant sends out the invitation for the client to set up their username and password. Once the logins are created, an alert is sent to the office, and staff can follow progress and offer help.

“Technology can be intimidating for some clients,” Hertel said. “We want to hold their hand and walk them through before they get frustrated by any of it.”

They also invite clients to use eMoney’s vault, which is secure cloud storage that clients and the office have access to. They encourage clients to use the vault themselves to upload vital documents that would be inconvenient to lose, such as a photograph of their passport, scans of their tax returns and their estate documents. The office uses it to store the client’s financial plan for the client’s access. Clients can also upload documents they want to share with the office, but not over email.

Electronic Applications

They found that the major source of friction is paperwork. Embracing electronic applications was key to reducing that friction. They have been able to find online applications for almost all companies.

“I can count on one hand the number of paper applications that we’ve completed in the last 12 months,” Hertel said. “Most insurance companies and investment companies we use accept DocuSign, which we use on forms whenever possible.”

When advisors start applications for a product or policy, they no longer complete them at the time of the recommendation. The office has a client information sheet that the staff can use over the telephone with clients to gather what is needed to complete the application.

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.

SPECIAL SECTION: TECHNOLOGY THOUGHT LEADERSHIP

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oresters Financial™, the purpose driven fraternal life insurer, is enjoying record sales as it pursues its mission to enhance the well-being of its insureds (members) and their communities. On the back of several new member benefit launches over the past 18 months, Foresters just announced a holistic wellness app called Foresters Go™, available to all members.

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Foresters Go is so much more than just a wellness app. It’s a fun way for Foresters members to earn exciting rewards for healthy living, family activities and giving back in their community. The reward choices number in the thousands

“While agents have benefitted from our technology platform for a while now,” said Mr. Rush, “what they are really starting to appreciate is how our member benefits make it so much easier to talk about how we support families and communities with prospective customers, and to ask for referrals.” and current categories include merchandise (e.g., tablets, smart watches), gift cards, and charitable donations.

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Foresters Go is available for download on the Apple App Store or Google Play.

Innovation for Agents

Agents appreciate simple products and digital tools that make it easier to talk with new clients.

28

InsuranceNewsNet Magazine » November 2021

Foresters’ focus on technology innovation has also benefited independent life insurance agents with mobile and digital solutions that vastly enhance independent agent productivity and success by streamlining the client experience.

“We have long been committed to making it easy to do business with us with a full suite of non-medical and non-fluid life insurance products,” said Mark Rush, Head of U.S. Distribution for Foresters. “Agents appreciated our non-faceto-face, transactional solutions as the pandemic hit and fundamentally changed the way many of them did business.”

Technology Issue • Special Sponsored Section

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“Our upgraded Foresters Biz mobile app is an essential tool for our agents,” Mr. Rush added, “In the palm of their hand they can generate quotes across our Term, Whole Life, and Universal Life product lines. In addition, it is a resource and communication hub, providing access to client policy information, product specifications, special notifications, and other resources. The solution is configurable, with built-in integration to other Foresters applications.”

“While agents have benefited from our technology platform for a while now,” said Mr. Rush, “what they are really starting to appreciate is how our member benefits make it so much easier to talk about how we support families and communities with prospective customers, and to ask for referrals.”

Officer at Foresters. “The benefits are designed to help everyday families enjoy a more prepared and healthier life, as well as have a little fun.”

Some of the core benefits Foresters offers include the Foresters Competitive Scholarship Program — $2,500 for up to four years to children and/or grandchildren of insured members who get good grades and show a commitment to helping others in their community.

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“Offering member benefits to enrich the lives and communities of its members has always been the cornerstone of the Foresters purpose,” said Nicole Gourley, Chief Membership

Foresters member benefits, available to insureds who are members, are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without notice or are no longer available. Some of these benefits may be administered by third parties such as Foresters Go which is operated by dacadoo AG. For further details, go to foresters.com Foresters Financial, Foresters, Helping Is Who We Are, Foresters Care, Foresters Go and the Foresters Go logo are trade names and/or trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Road, Toronto, ON, Canada M3C 1T9) and its subsidiaries.

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Technology Issue • Special Sponsored Section

High-Speed, Accurate Data (and Results) at Your Fingertips Data Decisions Group puts data science to work with ease for its customers

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he current digital economy creates consumer empowerment and expectations. When combined with the immense diversity of the population in the U.S., the task of targeting the right person at the right time in the preferred channel becomes complex.

“In the past, we used the words ‘market segmentation,’ but another way to look at it is market fragmentation, because of our unique attributes as a society,” says Mike Hail, CEO, Data Decisions Group. “Ethnicity, sexual oriMike Hail entation, religion, where you live and so much more shape your consumer perspective.

But having the right amount of quality data and analyzing it in the right way help break down complexity to target the right customers.”

Game-changing data technologies can provide businesses with game-changing insights

Data Decisions Group (DDG) provides data, research and insights that allow marketers to engage their audiences more strategically and effectively, using the cloud and machine learning in its data prep, analytics, and campaign management tools and platforms. But DDG’s three primary technologies — Reach, dataRamp and LeadForce™ PRO — are also focused on a simple and streamlined end-user experience.

Customers can subscribe to these insurance marketing infrastructure services either individually or together for a comprehensive, end-to-end experience.

DDG’s digital resources are easy to use, allowing sales and marketing teams plus others in the insurance industry to respond in a timely manner with the correct message for individual consumers. Plus, DDG services are scalable, so DDG offers benefits and solutions to the solo financial advisor and all the way through to the largest carriers.

Reach your ideal customer

Reach holds DDG’s consumer data warehouse with thousands of data values on more than 257 million consumers in the U.S., gathered from thousands of local and national sources. It’s an AWS-based machine learning platform based on proprietary analytical software (QeS) that can produce a local market model for acquisition. The “right person” is selected and then

32

InsuranceNewsNet Magazine » November 2021

reached in their preferred channel. The model is built right now as opposed to in weeks.

“Data elements in Reach can come from monitoring web search histories,” says Hail. “How many times was a certain carrier searched? How many times has that person hit my website looking at auto, home, life or health policy information or watching my videos? We’re measuring the website user’s intent. We’re measuring their in-market status.”

For DDG’s clients, Reach allows DDG to: provide a concise profile of the audience demographic (socioeconomic and psychographic), map visually where customers (individual or household) are located, estimate the total addressable market, and identify the right target audience using thousands of values for accuracy.

“In the digital world we live in, we can collect information and we can analyze it at a cost that is reasonable. Digital information affords us the opportunity to define you as a more specific target,” says Hail. “For example, I can distinguish between a Medicare Advantage person and a Medicare supplement person — as opposed to a person who’s not going to buy either.”

End-user insurance marketers can use information from Reach to concentrate on understanding their audience and defining the best possible campaign to maximize their ROI. In the simplest terms, Reach identifies the best prospects today.

“Reach provides DDG the analytics to be able to say to an agent, ‘Well, this is a person who intends to buy and prefers an agent, and they want to buy a Medicare Advantage policy,’” says Hail. “We may even be able to tell if the individual is more oriented to community plans than national plans.

It’s very specific.”

Ramp up to more accurate data models

DDG’s powerhouse is a data preparation platform called dataRamp, which runs postal software and national change of address information to ensure postal standardization. It also suppresses deceased, nursing homes, prisons, military bases, PO boxes and business addresses.

“Normally, data is separate. There are different groups running it, and it’s not connected, so we say it’s stored in silos,” says Hail. “So, the key to DDG’s dataRamp is we’re trying to make sure that you correctly organize the consumer’s record so you have a single view of the consumer.”

This single view is accomplished through dataRamp’s persistent identification number, which it assigns to indi-

Technology Issue • Special Sponsored Section

vidual, family and postal addresses to match demographics, assets (property, stocks/bonds), lifestyles, transactions and scores (propensity, predictive). It also enables omnichannel linkage with fields such as email, social media accounts, website visits and call center contacts. For the technology team, there is a much longer description.

“If you can’t create a consumer record correctly, you cannot build the right analytic. And as a result, you can’t decide who’s qualified to buy,” says Hail. “All raw data goes into the dataRamp, and it organizes it correctly so that when I feed it to Reach, I get the right answer.” dataRamp is “step one” in the DDG’s data gathering and hygiene process, and it feeds DDG’s Reach. However, it can also feed Salesforce.com®, Adobe Campaign® and other platforms, allowing users to link to their organization’s own records.

Data Decisions Group delivers:

• Quality Data • Innovative Models • Better Targeting • Exceptional Results

Because dataRamp is cloud-based and automated and processes information fast, it’s an attractive option for inhouse marketing technology teams to use with their own data. And dataRamp’s ongoing data hygiene ensures what you pull is consistently up to date and accurate.

If you get data right, great leads happen

LeadForce PRO is DDG’s turnkey lead program that uses the data from dataRamp and the analytics from Reach to create a scored prospect database for omnichannel campaigns.

Users access a web-enabled front-end lead-management platform. Individual users who have been authorized to use the system can view the number of leads and the cost-perlead for their territory (county, ZIP code), order a campaign and begin receiving leads within the budget they selected.

“For example, an authorized advisor whose FMO uses LeadForce PRO can go into the system and specify Medicare Advantage,” says Hail. “They can see the campaigns that are available. If it’s direct mail, you’ll be asked things like ‘Do you want an envelope package? Which creative do you want?’ You click your choices and continue moving through the process based on cost-per-thousand or cost-per-lead.”

Leads are returned on a daily basis automatically to the location specified by the user.

“We prep the data correctly, we analyze the data correctly, and then we put it into an action device — LeadForce PRO — that not only causes lead flow but also tracks as leads

come back in,” says Hail. “That means we’re able to measure the real response rate. And if it doesn’t match our expectations, we do the next iteration of the analytics immediately and find out why. It’s a constant process of refinement.”

Make the most of your marketing investment

“We live in a digital economy,” says Hail. “It’s changed our abilities. We can collect, organize and analyze data, and then post it into a campaign tool that makes outreach to potential customers faster. In addition, America is more diverse. So you get this combination of the impact of technology and the impact of diversity.”

Hail adds, “On that technology side, the economy moves faster. People want responses faster. Consumers express their biggest dissatisfaction with the insurance companies because they want a response within minutes and insurance companies take days to weeks.”

DDG responds to the consumer need for speed by making its solutions scalable and flexible. And as Hail says, “Machine learning and our technology make the whole thing fast, fast, fast.”

In addition, the comprehensive, organized data in dataRamp accommodates diversity and reflects the wide and varied needs of today’s consumers.

“What’s your attitude about insurance?” asks Hail. “Do you want to leave an inheritance, or do you want to spend all your savings before you pass away? Are you planning to fund your kids’ college, or do you expect them to do it alone?

If you don’t have kids, do you have a husband, wife or partner whom you want to provide for — or not? What’s your preferred language? All of these things are critical for understanding the consumer and selling them the right product or service.”

Reach out to Data Decisions Group about your goals From supporting advisors with Medicare Advantage leads to helping large carriers with appending and processing their data, DDG offers scalable solutions that fit a wide range of budgets and needs. Learn how DDG can help you acquire more customers. Visit ThePerfectData.com to download DDG’s white paper “Your Ideal Prospects Are Waiting.”

November 2021 » InsuranceNewsNet Magazine

33

PANDEMIC HASTENED HISPANICS’ INTEREST IN LIFE INSURANCE

LIFEWIRES

Four in 10 Hispanics (37%) say they are more likely to purchase life insurance due to the pandemic. This percentage is higher than that of the general population at 31%.

COVID-19 prompted 14% of Hispanics to purchase life insurance for the first time in 2020.

The Hispanic Market: Opportunities For Life Eight in 10 Hispanic consumers said they believe they should own life insurance, yet Source: LIMRA

only about half have coverage. This represents an opportunity for the life industry, according to the 2021 Insurance Barometer Study. Adding to the opportunity is the fact that the Hispanic population is expanding — growing 23% over the past decade to 62.1 million, the U.S. Census Bureau reported.

LIMRA collected a number of facts about Hispanics that show this is a market ripe for growth. Nearly half (47%) of Hispanic consumers said they need (or need more) life insurance coverage, which is higher than any other race or ethnicity.

Forty-five percent of uninsured Hispanics said they are likely to purchase coverage within the next 12 months. Hispanics — more than any other race or ethnicity — would prefer to work with a financial professional to purchase coverage (37% versus 33% for the general population).

If Hispanics are so eager to purchase coverage, then why haven’t more of them done so? LIMRA’s research found the top reason Hispanic consumers give for not purchasing life insurance is that it is too expensive. Yet, 82% of Hispanics overestimate the cost of coverage.

A third of Hispanic consumers (31%) do not feel knowledgeable about life insurance.

More than a quarter of Hispanic consumers (26%) say they haven’t purchased coverage because they don’t know what to buy or how much they need.

Respondents’ higher willingness to purchase coverage does not always correlate to higher amounts desired. By ethnicity and race.

Amount of coverage desired: Under $100K Over $100K

Willingness to purchase life insurance coverage in the next 12 months: Willing to purchase life coverage 48%

33% 59%

30%

75%

41%

55% 25%

Caucasian/White SOURCE: Deloitte Analysis

Black/African American

CLOSE THE COVERAGE GAP WHILE HELPING UNDERSERVED GROUPS

Consumers showed a greater interest in buying life insurance during the COVID19 pandemic, but how can carriers continue to capitalize on that interest? How can insurers close the coverage gap while bolstering diversity, equity and inclusion?

A recent report by Deloitte Center for Financial Services, “Financial Inclusion And The Underserved Life Insurance Market,” analyzed ways insurers can navigate the coverage gap and help underserved markets obtain coverage.

DID YOU

KNOW

?

34

43%

45%

Hispanic/Latino

40%

60%

Asian/Pacific Islander

Some population segments must first be educated on the purpose and value of life insurance. For example, nearly twice as many respondents in the youngest age segment (21- to 30-year-olds) revealed they were unfamiliar with the value of life insurance products compared with older respondents. Not surprisingly, the lowest-income groups knew less about these products than higher earners did.

Similarly, 18% of Blacks surveyed said they were not familiar with the purpose of life insurance compared with approximately 12% of whites, Hispanics and Asians.

QUOTABLE With all the technology today, the younger generation can’t wrap their minds around it taking 45 days to get a policy in force.

— Grant Dunn, vice president of financial services at Lakenan, an insurance brokerage in St. Louis

A RISE IN FREELANCING IMPACTS LIFE SALES

As Generation Z and millennial workers challenge the concept of a traditional career and drive an increase in freelancing, the role of workplace group life insurance in long-term financial plans is likely to change, according to a NerdWallet study.

Even though many workers in their 40s and 50s depend on group life provided through an employer, younger adults are looking for coverage outside the workplace. Last year, life insurance application activity grew more than twice as fast for Americans 44 and younger compared with those 45-59, according to MIB Group.

Younger workers typically do not stay at jobs as long as older workers do, the most recent data from the Bureau of Labor Statistics shows. And workers can’t always convert group life to an individual policy to avoid losing coverage when they leave a job.

Bestow, a digital life insurance platform, acquired Centurion Life.

InsuranceNewsNet Magazine » November 2021

Source: Bestow

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Product and feature availability may vary by state and broker/dealer.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America (Allianz).

This offer is not valid in the state of New York.

Product P64339 is issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. www.allianzlife.com M-7559 (10/2021)

November 2021 » InsuranceNewsNet Magazine

35

LIFE

Premium Financing: Helping Heirs With Estate Taxes A high-net-worth client needed a strategy to provide liquidity for her heirs.

By Matthew Levesque

I

n today’s uncertain tax environment, many financial and estate planners are forced to make difficult choices. They must determine how much money to allocate toward life insurance premiums to provide estate liquidity and hedge against future estate taxes, and how much to dedicate to business interests and personal investments where yields are likely to be higher.

Life insurance premiums can appear daunting. As a result, many clients end up purchasing the amount of coverage they are comfortable paying for instead of buying the amount of coverage their plan requires. In certain situations, premium-financed life insurance can provide the opportunity to acquire the amount of coverage required, while adding flexibility and reducing the annual outlay required by paying premiums traditionally.

Mrs. Bryant

A widow for several years, Mrs. Bryant, 73, had a $30 million estate and was facing a projected estate tax liability of $8 million. A needs-based analysis concluded

Life insurance premiums can appear daunting. As a result, many clients end up purchasing the amount of coverage they are comfortable paying for instead of buying the amount of coverage their plan requires.

36

InsuranceNewsNet Magazine » November 2021

that a life insurance strategy to obtain $10 million in coverage could serve two purposes. First, it would provide an efficient way to offset Mrs. Bryant’s growing estate tax liability and ensure her legacy was maximized as it passed to the next generation. Second, life insurance proceeds would provide liquidity to pay the taxes due. This would save Mrs. Bryant’s daughters from being forced into selling assets or securities at unfavorable prices and possibly incurring additional taxes.

The Life Insurance Analysis

Mrs. Bryant faced a dilemma. If she were to purchase a traditional guaranteed life insurance policy with $10 million in coverage at her age and in her risk class, the lifetime premium would be approximately $320,000 a year. This is money Mrs. Bryant would not have available to spend on her daily living expenses or future care costs.

Even if there were additional liquidity to pay premiums, buying this policy

PREMIUM FINANCING: HELPING HEIRS WITH ESTATE TAXES LIFE would not be the best use of capital. By market growth linked to selected indexes, considerable. Mrs. Bryant was projected the time she reached her anticipated life while severely limiting exposure to mar- to exceed her death benefit goal while expectancy at age 91, Mrs. Bryant would ket declines through guaranteed mini- saving more than 50% annually and limhave paid $5.7 million in premium to mum interest rates and index floors, mit- iting her payment duration from lifetime provide her estate with $10 million in igating some of the risk in financing pre- to 10 years. death benefit, a net insurance benefit of miums for IUL. Premium financing in today’s market $4.3 million, or an internal rate of return The premium finance strategy provid- is most effective for clients ages 40-60 of 5.55%. ed Mrs. Bryant significant savings and seeking at least $10 million of coverage.

Mrs. Bryant didn’t care for the premi- limited the length of her contribution In building death benefit designs, the um amount, the lifetime duration of the commitment. She would borrow $2.7 planner should target a death benefit premiums or the lack of value she per- million annually for seven years and amount that is slightly higher than the ceived she was receiving. contribute $150,000 annually toward client needs. This is to maintain a net At this stage, it still wasn’t death benefit that targets the cliknown whether Mrs. Bryant ent’s goal throughout the lifetime was a candidate for premium of the transaction. If the client loan financing. Done propdies, the bank is repaid first, with erly, a life insurance analysis » Years 1-7, loan payments of $2,765,766 per year the remaining proceeds passing evaluating the effectiveness of to the client’s beneficiaries. premium loan financing must » Total loan payments equal $19,360,362 include an assessment of: The Loan » Expected mortality in Year 18 At the time Mrs. Bryant applied » A policy design that intefor financing, she was able to grates with the estate plan; secure a 3.40% first-year variable Death Benefit: Loan Plus Death Benefit Accrued Interest to Heirs rate, highly competitive at the $39,699,009 $26,643,691 $26,643,691 » Multiple lending options time. The cash value of the IUL considering various policy served as the primary colcollateral arrangements; lateral, and the secondary collatdebt service for 10 years for a total cost eral was secured through a portion of » The exit from the loan arrangement; of $1.5 million. At life expectancy, the Mrs. Bryant’s outside assets. and finance design was projected to provide Mrs. Bryant’s transaction required $1 $13 million in death benefit, for a total million in outside collateral in the first » A full disclosure and acceptance of net insurance benefit of $11.5 million, year, projected to grow to a high point the risks involved. or an IRR of 16.6%. of $2 million for policy years six through Mrs. Bryant used her investment eight. A series of stress tests, which took The Policy Design portfolio as collateral and used excess poor policy performance and a rising For Mrs. Bryant, an indexed universal life cash flow generated by her investments loan interest rate into consideration, policy presented advantages over other to service the annual commitment of showed the collateral could grow as high cash policy types. An IUL policy permits $150,000. as $3 million and could possibly be rea client to participate in the upside of The benefits of financing appear to be quired for 10 years.

Death Benefit Analysis

Loan and Collateral Projections (AG49) $20,000,000

Total Loan IUL Cash Value

Outside Collateral Required

$15,000,000

$11,467,734 $11,467,734

$10,000,000

$1,761,091

$5,000,000

$-

1

2

3

4

5

6

7

November 2021 » InsuranceNewsNet Magazine

37

LIFE PREMIUM FINANCING: HELPING HEIRS WITH ESTATE TAXES

$13,055,318

Summary at Life Expectancy Year 18 (Age 91) FINANCED POLICY

NON-FINANCED POLICY

Total Cost: $1,500,000

Total Cost: $5,760,000

Net Death Benefit: $13,055,318

Net Death Benefit: $10,000,000

ROI at Life Expectancy: 16.56%

ROI at Life Expectancy: 5.55%

Financed Policy Non-Financed Policy

$10,000,000

$5,760,000 5.55%

$1,500,000

Total Cost

Projecting The Exit

When constructing a premium-financed death benefit design for a client over the age of 70, death is often the exit strategy when the lender will be repaid from the death benefit and the remainder will pass to the policy’s beneficiaries. It is critical for these designs to target the net death benefit to match the client’s goal of $10 million.

Consider The Risks

There are several risks to consider before moving forward with a premium-financing transaction. These risks generally fall into three categories:

Net Death Benefit

Projected vs. Actual Premium Finance Results at Mortality Actual Total Death Benefit: $27,000,000 vs. Projected Death Benefit: $27,000,000 Actual Total Outstanding Loan: $11,297,186 vs. Projected Outstanding Loan: $11,735,256 Actual Net Death Benefit to Estate: $15,702,814 vs. Projected Net Death Benefit to Estate: $15,264,744

G2 2020 Inheritance

1. Policy risks involve adjustments to the life insurance policy’s performance.

Assumed Estate Value 2020:

2. Personal risks are largely related to someone’s net worth, liquidity and posted collateral, which impact a client’s ability to qualify for a loan.

Assumed Estate Tax Due 2020:

$35,095,756

3. Lending risks are almost always associated with the interest rates for loans but may also come from changes to other terms.

The Outcome

Mrs. Bryant died unexpectedly in 2020, a few years after implementing her plan.

This permitted a review of her premium loan financing strategy.

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16.56%

InsuranceNewsNet Magazine » November 2021

$(7,000,000) Death Benefit:

$15,702,814 Cumulative Premium Cost:

$(600,000)

Total 2020 G2 Inheritance:

$44,938,570

ROI at Life Expectancy

After Mrs. Bryant’s passing, her estate was valued at $35 million, and her children received the liquidity they needed to pay $7 million in estate taxes. As a result of her plan, $44 million passed to the next generation. This amount included higher-than-expected death benefit proceeds of more than $15 million.

Premium loan financing may be the solution to challenging estate planning scenarios involving individuals who cannot divert cash to pay for life insurance. Evaluating the suitability of premium financing involves much more than simply reviewing policy death benefit amounts and lending interest rates. All aspects of how premium loan financing impacts an estate must be considered.

Matthew Levesque is a principal of Vérité Group, a national life insurance planning firm based in Miami.

He may be contacted at matthew. levesque @innfeedback.com.

Like this article or any other?

Take advantage of our award-winning journalism, licensure and reprint options.

Find out more at innreprints.com.

Life Insurance | Annuities | Asset Protection

Protecting what matters most. Together.

Your clients count on you to help them protect what matters most. And for more than a century, you’ve trusted Protective to work as hard as you do for your clients and help you deliver the sense of security they deserve.

Now, more than ever, Protective is here for you with a bold new energy and renewed commitment to helping you make life insurance and annuities more accessible to more people. We’re here to help your clients be more confident, to help you protect more people and to help you grow your business. Because in the end, we’re all protectors. protective.com/protectors The Protective trademarks, logos and service marks are property of Protective Life Corporation and are protected by copyright, trademark, and/ or other proprietary rights and laws. Protective and Protective Life refers to Protective Life Insurance Company (PLICO) located in Nashville, TN and its affiliates, including Protective Life & Annuity Insurance Company (PLAIC) located in Birmingham, AL. Insurance and annuities are issued

by PLICO in all states except New York and in New York by PLAIC. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues. Product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Insurance and Annuities are: Not a Deposit | Not Insured by any Federal Government Agency | Have no Bank or Credit Union Guarantee | Not FDIC/NCUA Insured | May Lose Value CLABD.2925266.07.21

ANNUITYWIRES

QUOTABLE

2Q Deferred Annuity Sales Were Up 10%–40%, Wink Reports

Annuity sales continued to pop through0.7% out the second quarter, coming close to 15.3% or eclipsing all-time records in some cases. Total second-quarter sales for all 35.8% deferred annuities were $64.4 billion, an increase of more than 10% when compared with the previous quarter, accord22.4% ing to Wink’s Sales & Market Report.

Sales represent an increase of 40.4% when compared with the same period last year, Wink reportSource: Wink ed. Total deferred annuities include the 25.9% variable annuity, structured annuity, inVariable Annuities Indexed Annnuities Multi-Year Annuities Variable Annuities Indexed Multi-Year Annuities dexed annuity, traditional fixed annuity Structured Annuities Fixed Annnuities Annuities Structured Annuities Fixed Annuities and MYGA product lines.

LIMRA recorded U.S. annuity sales of $68.2 billion in the second quarter of 2021, up 40% from prior year. This represents the largest sales total for a quarter other than fourth-quarter 2008 during the Great Recession, according to the Secure Retirement Institute U.S. Individual Annuity Sales Survey. In the first half of 2021, total annuity sales increased 23% from prior year to $129.2 billion.

0.7 %

15.3%

0.7 %

15.3%

35.8%

35.8%

22.4 %

We’re starting to see some of that positioning for health care with your longterm care riders.

— Kevin Sullivan, senior vice president, RIA annuity distribution, Nationwide, on the flexibility of variable annuity products

22.4 %

25.9%

25.9%

attitudes and practices, their understanding of clients’ retirement income concerns and priorities, and their strategies for meeting client income needs.

The survey uncovered two factors that could be propelling advisors to up the share of client portfolios allocated to riskier asset classes: a growing dissatisfaction with their fixed income returns, and the fact that a significant portion of advisors are charging lower fees — or no fees — on fixed income assets.

meta-chart.com

meta-chart.com

SURVEY SHOWS CONTINUED UPTICK IN ANNUITY USAGE PRUDENTIAL UNLOADS VARIABLE ANNUITY BLOCK

Prudential Financial became the latest insurer to offload a portion of its in-force legacy variable annuity block. The deal with Fortitude Group Holdings is worth $2.2 billion.

As per the terms of the deal, Prudential will sell one of its stand-alone legal entity subsidiaries, Prudential Annuities Life Assurance Corp., including PALAC’s in-force annuity contracts, to Fortitude Re, for an all-cash purchase price of $1.5 billion, plus a capital release to Prudential and an expected tax benefit.

The transaction is expected to close during the first half of 2022, when Prudential anticipates a reduction to pretax annual adjusted operating income of approximately $290 million. Proceeds from the transaction are expected to be used for general corporate purposes.

DID YOU

KNOW

?

40

The icy attitude toward annuities is thawing among the advisor set.

DPL Financial Partners’ annual RIA Retirement Planning Survey found that many advisors are still trying to adapt their practices to the realities of this era of low interest rates.

While many are struggling with increased risk in client portfolios and the challenges of billing asset under management fees on low-yielding assets, a growing number of their peers embrace the income and downside protection features offered by annuities to solve these problems.

The survey, which polled more than 200 registered investment advisors, measured advisors’ retirement planning

LOBBYIST: CONGRESS WILL LIKELY PASS RETIREMENT SECURITY BILL

There is a good chance Congress will end up passing additional retirement security legislation before the end of the year, Jeff Forbes, founding partner of Forbes Tate Partners, said during a recent industry event.

The Securing a Strong Retirement Act Jeff Forbes of 2021 is a follow-up bill to the SECURE Act passed into law at the end of 2019. Known colloquially as “SECURE 2.0,” it contains a variety of measures to boost retirement accounts and is heavily supported by the industry.

SECURE 2.0 is likely to be passed by Congress before the year is out, Forbes predicted. The bill includes a list of measures designed to help people save more for retirement. That includes making it easier to purchase annuities as part of a retirement plan.

Group annuity risk transfer sales totaled $9 billion in the first half of 2021, Secure Retirement Institute U.S. a 30% increase compared with first-half 2020 sales. Source: Group Annuity Risk Transfer Sales Survey

InsuranceNewsNet Magazine » November 2021

ANNUITY

Capped And Uncapped Annuity Strategies: Weighing The Options Each of these strategies provides accumulation potential while usually allowing for flexibility and reallocation opportunities.

accumulation potential while usually allowing for flexibility and reallocation opportunities on an annual or every other year basis.

By Doug Wolff

Explain Capped Vs. Uncapped

W

ith the widespread availability of COVID-19 vaccines in the U.S., many investors are hopeful.

But even as savers nationwide continue to gain confidence amid the continuously fluctuating market, how are they addressing fast-moving market volatility? Some strategies have weathered these volatile markets and eased client anxieties of sudden or unsuspected losses.

In particular, fixed indexed annuities have offered many retirement savers stable tax-deferred opportunities with the potential for solid accumulation.

Many FIAs offer savers the ability to choose between capped and uncapped index strategies, with each providing

With contracts flooring at zero percent, FIAs give clients solid protection from market loss, along with the potential for accumulation. But can clients be sure FIAs are a viable option for building their savings while maintaining a comfortable level of risk? Advisors must educate clients on the range of FIA options available and ways in which they can take advantage of them.

To guarantee principal in contracts, issuers design options on interest credits through a combination of a variety of account parameters including caps, participation rates and spreads. These parameters include uncapped and capped options. Allocating funds between both options is often a preferred strategy among many advisors and their clients.

A cap is essentially the maximum

30%

Annualized 20 YR

20%

-10% -20%

5.56%

5.37%

S&P 500 Raw Index Return S&P 500 P2P Credit

4.54% 20

19

17

16

18

15 13

14

11

12

10

09

08

06 07

03 04 05

01

02

10% 0%

interest rate your client can earn during the particular index term, regardless of the change in the underlying index. For example, if the cap is 5% and the value of the chosen underlying index rises by 10% during the index term, the cap amount of 5% will be credited to your client’s contract. However, if the index rises only 2%, the contract would only be credited 2%, as that is lower than the cap.

Index crediting methodologies are established using what is commonly called a hedge budget. The hedge budget is set based on the amount the insurance company can earn on its investments less a net interest margin to cover expenses and profit. In this historically low interest rate environment, hedge budgets have been squeezed.

Uncapped strategies typically involve a volatility control mechanism with the target volatility set at a relatively low level (as compared with the volatility of a typical equity index). This lowers the cost of the derivative used to back the index credits and allows the insurance company

3.30%

S&P Low Vol Raw Index Return S&P Low Vol P2P Credit

-30% Depending on the underlying index, different cap strategies will deliver different outcomes. The above example shows returns for the S&P 500 Price Index with a 5% cap1 and the uncapped S&P 500 Low Volatility 5% Index with a 1.5% spread.2 In both cases, a point-to-point crediting strategy (interest is the ending value less the starting value) is used, and the raw index returns are included for comparison.

While the raw indexes produced higher average annual returns over time, they also experienced much bigger swings (i.e., volatility). The uncapped index featured solid performance over time but trailed the capped index in some years. The capped index trailed the raw index performance but delivered much smoother returns. In down years, both strategies credited zero, as principal is guaranteed against market loss.

The 5% cap on the S&P 500 Price Index is an example; the actual cap would depend on many factors, including interest rates, hedge budgets, implied or actual volatility, other product features and expenses, and more. The cap is the maximum amount credited to the account value in that year.

1

42

InsuranceNewsNet Magazine » November 2021

The 1.50% spread on the S&P 500 Low Volatility 5% Index is an example; the actual spread on the S&P Low Volatility 5% Index would depend on many factors, including interest rates, hedge budgets, other product features and expenses, and more. Each year, the spread is subtracted from the index performance, resulting in the amount credited to the account value (subject to a minimum of zero).

2

CAPPED AND UNCAPPED ANNUITY STRATEGIES: WEIGHING THE OPTIONS to offer higher interest potential versus having a cap on the interest rate. It also tends to stabilize the cost of the derivative used, and can result in more consistent renewal parameters around index crediting from period to period. A drawback to uncapped strategies is that the volatility control mechanism itself can result in some limits to the index credits.

Capped strategies typically involve indirect exposure to a straight equity index (such as the S&P 500). There is usually less expense built into an index, but a cap is often needed in this low interest rate environment as the cost of the derivative to back the index credits would be too expensive without introducing the cap.

This is because the volatility of straight equity indexes is usually higher than the volatility of those that have a built-in volatility-controlled mechanism (like the uncapped strategies).

How And When To Reallocate?

Having uncapped and capped contracts built into a client’s investment strategy gives

both the financial professional and the client more options, and flexibility, when reallocating at the end of each FIA’s term.

Advisors often examine the capped amount of a crediting option versus the reduction of return from a participation rate or spread when working with clients to reallocate their contracts. Another consideration is the level of volatility being targeted in an uncapped, volatility-controlled index. Generally, the higher the volatility target, the more exposure to the equity portion of the index a policyholder can expect over time.

An analysis of what underlying indexes are available is another important factor.

Advisors can explore various options that derive interest potential from indexes linked to equities, bonds and even commodities. Depending on what their economic outlook is, advisors can adjust client portfolios to match this view, providing even greater diversification potential.

Finally, your clients may also want to consider a guaranteed fixed return option for a portion of their assets. In this case,

ANNUITY

the interest earned is “capped” at the stated rate but is also guaranteed, usually for one contract year at a time. And in this low interest market, as noted earlier, the fixed return of an insurance contract will likely be considerably higher than what you may be able to find for your clients in other instruments, such as certificates of deposit.

Balancing a well-diversified portfolio that addresses client concerns, while distributing funds across varied allocations in uncapped and capped FIA strategies, can help them accumulate assets across a variety of market conditions.

It’s important to have multiple strategies as options that allow for flexibility in redistribution over time. In addition, it is important to help make sure your clients have a portion of their money in a position where they can still sleep soundly if a drop in the equity markets should occur.

Doug Wolff is president of Security Benefit Life.

Doug may be contacted at doug.wolff@innfeedback.com.

• • •

November 2021 » InsuranceNewsNet Magazine

43

HEALTH/BENEFITSWIRES

Many Uncertainties Over Need For LTC One of the most vexing concerns retirees face

MARRIAGE = LESS LIKELIHOOD OF NEEDING LTC

19% of married women will need no LTC, compared with 14% of single women.

17% of married women will need no LTC, compared with 13% of single men.

is whether they eventually will need long-term care. And one big unknown is just how many Center for Retirement Research at people will need help as they get older as well Source: Boston College as how much help they will need.

On one end of the scale, about 20% of today’s 65-year-olds will not need any long-term care during the rest of their lives, and another 20% will need only minimal support, according to the Center for Retirement Research at Boston College.

But on the other end of the scale, about 25% will need significant help for more than three years. Another 38% will fall somewhere in the middle, needing a moderate amount of care for one to three years.

So how do you know who is likely to need help in their later years? Those who remain healthy in their late 60s are the least likely to require assistance down the road, the study showed.

AN UNVAXXED SPOUSE COULD COST WORKERS MONEY

The largest nonprofit health care system in Louisiana is hiking health insurance fees for anyone whose spouse or partner is unvaccinated against COVID-19. Ochsner Health, which has 32,000 employees, announced it will add a $200 charge to its workers’ health insurance fees if they have an unvaccinated partner or spouse.

Ochsner’s employees are already required to be vaccinated unless approved for a religious or medical exemption. The spousal vaccination is not a mandate, president and CEO Warner Thomas said.

Those who are unwilling to get the shot can pay the additional fee or leave the company health insurance plan. About 90% of Ochsner’s COVID-19 hospitalizations since December have been among unvaccinated patients.

Delta Airlines instituted a similar policy in August, adding a $200 increase in monthly premiums for all unvaccinated employees.

DID YOU

KNOW

?

44

HSA BALANCES UP; CONTRIBUTIONS DOWN

Between 2019 and 2020, health savings account balances increased by $400, but average annual individua l contributions fell 2%, and average annual distributions declined to an all-time low of $1,700. That’s the word from the Employee Benefit Research Institute.

EBRI researchers concluded the lower HSA contributions could be tied to employment concerns related to the COVID-19 pandemic, while the declines in distribution could be the result of fewer people seeking routine medical care during the pandemic.

The percentage of individuals making contributions to their HSAs was flat between 2017 and 2020, at 50%. The percentage with employer contributions trended down over that time period, from 51% in 2017 to 44% in 2020.

Average annual individual contributions fell in 2020 after reaching an all-time high in 2019, going from $2,041 to $1,995.

QUOTABLE The financial burden of paying for health care — sometimes referred to as ‘financial toxicity’ — is high for older adults in their 60s.

— John W. Scott, assistant professor of cardiac surgery at the University of Michigan

AMERICANS STRUGGLE WITH HEALTH CARE LITERACY

The COVID-19 pandemic has led to more people paying close attention to health care, but many still lack the knowledge required to make informed choices about their health plan and care, according to a DirectPath report. Among the report’s findings: Almost one-third (31%) of employees know they have received an inaccurate medical bill in the past three years, yet 52% say they don’t know how to dispute or fix a medical bill.

More than half (55%) of consumers don’t know that they can compare treatment or service costs before choosing where to get care, the report revealed.

The survey also showed that among those who have health insurance through their workplace, only 37% take advantage of the available employer resources to learn how to choose and use their health plans. Instead, many people turn to family (24%), friends (14%) or self-conducted online research (34%) to help inform their plan choices.

WORKERS SHOW GAPS IN HEALTH CARE LITERACY 57% of employees report they check if a provider is in network only when they plan to visit a new provider or facility, and 25% do so only when their health plan changes.

Source: DirectPath

8.6% of the U.S. population, or 28 million, did not have health insurance at any point during 2020.

InsuranceNewsNet Magazine » November 2021

Source: U.S. Census Bureau

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November 2021 » InsuranceNewsNet Magazine

45

HEALTH/BENEFITS

Why Offering DI Can Transform An Employee Benefit Package COVID-19 led employers and their workers to have new priorities in their workplace benefits packages.

By Scott Towers

E

mployers began rethinking their benefits packages after COVID-19 and related illnesses left many Americans too sick to work and loss of income became a reality for many workers. The pandemic threatened the financial security of these individuals and their families, leaving them uncertain how they would be able to afford the cost of living and medical expenses.

Both employers and their workers realized just how valuable disability benefits are for protecting financial wellness. In fact, a recent Harvard Business Review survey found 98% of employers plan to expand or offer new benefits, including disability benefits, based on the priorities of their employees.

Although the Integrated Benefits Institute reported employers and insurance carriers have paid nearly $11 billion in disability benefits related to COVID-19, employee access to disability insurance remains low. The U.S. Bureau of Labor Statistics reported that as of March 2020, only 40% of American workers had access to short-term disability through their employer and only 35% had access to long-term disability. In addition, the availability of these benefits greatly varied by wage group.

Considering that about 33 million Americans are COVID-19 survivors, and more than one in four have developed some form of long-haul COVID-19, disability claims are expected to skyrocket in the coming months and years.

Benefits brokers can help employers implement a comprehensive disability insurance plan and proactively relay the value of enrolling to all their workers.

46

Offering quality disability benefits helps employers better support workers’ overall well-being by protecting them against lost income if they become disabled due to long-term implications of COVID-19 or another illness or injury. It also can help employers attract and retain talent.

Expectations For Comprehensive Disability Benefits

As health and wellness became a focal point for many people following the events of 2020-21, workers now have higher expectations for their workplace benefits packages to better support their overall well-being. Randstand reported this year that nearly one in five workers changed jobs during the pandemic, and 30% of those who switched jobs did so for better benefits. These employees need to be aware of the preexisting condition limitation of disability benefits, which usually precludes coverage of disabilities resulting from preexisting illnesses that started anywhere from three to 24 months before the disability began.

As more individuals continue to navigate the long-term impact of COVID-19 on the future of their health, both physical and mental, having access to disability benefits can give workers peace of mind by providing a source of income replacement to help cover living expenses and health care costs if they become unable to work due to a qualifying disability.

Employers can also help control health care costs and make their disability benefits go the extra mile for workers by choosing a disability plan that integrates benefits with their medical plan. This improves the disability experience for workers by connecting them to care in simpler, more effective and more affordable ways. In addition to accelerating the disability claims process, an integrated plan gets benefit payouts to workers more quickly for qualifying disabilities.

Integrated disability benefits ensure

InsuranceNewsNet Magazine » November 2021

workers receive more personalized guidance and comprehensive care by allowing meaningful connections with both disability claims managers and health coaches. The close collaboration between case managers and care management teams ensures a worker who experiences a qualifying disabling illness or injury receives the right care, at the right time, and that all benefit programs included in the plans are connected for a truly transformative impact.

This collaborative expertise offers a faster, more reliable way to identify and manage chronic conditions that could lead to a qualifying disability, especially as it relates to the COVID-19 long-haulers or those with chronic conditions that were made more serious by COVID-19.

The care coordination offered through integrated disability benefits can help workers proactively monitor and manage their chronic health conditions at all stages and moments of their unique personal health journey, enabling them to resume their regular daily life sooner and go back to work as safely and quickly as possible.

Supporting Total Person Care

Beyond protecting workers’ financial security, comprehensive group disability insurance can also support their behavioral and mental health through valueadded benefits that can be used without a claim, including counseling services, financial consultations and legal services.

These value-added benefits can make a huge difference for employees, especially considering the Kaiser Family Foundation reported 47% of adults are experiencing mental health issues as a result of the pandemic. As part of these additional benefits, employees can connect with licensed mental health counselors via phone or video chat or in person to help them cope with the long-term mental health impact of the pandemic and any ongoing stressors in their work or

NO MORE OUT-OF-POCKET MEDICARE COSTS!

Workers Are Going WITHOUT Disability Coverage • 51 million working adults in the U.S. are without disability insurance.

• 33% of workers in the U.S. have access to longterm disability insurance through their employer.

• Around 41% of employers offer long-term disability insurance to their workers.

SOURCE: Council for Disability Awareness

personal lives. These solutions can help bridge gaps in care brought on by their new qualifying disability and help them adjust to changes in their everyday lives, which can help prevent burnout and improve productivity.

Options For Employers

When choosing a disability plan, it’s important for employers to be aware of the options available and select the one that best meets workers’ needs. Short-term disability insurance can replace a certain percentage of an employee’s income during a qualifying illness or injury of a few weeks or months, while long-term disability insurance provides income benefits for an extended period of time; many plans offer benefits until retirement.

Offering both short- and long-term disability coverage provides the best protection and peace of mind for employees, especially those who may be COVID-19 long-haulers and can experience qualifying debilitating symptoms for months.

However, that’s not always realistic for all employers based on their budget, but there are still options for employers to offer a quality disability insurance plan without spreading themselves too thin.

If employers are not able to fully cover the premium, they can partially cover the premium and have the workers cover the rest through payroll deductions, or they can offer voluntary disability insurance and have the workers cover the full premium, also through payroll deductions.

These options allow employers to choose a plan best suited to their budget while still offering disability benefits to protect workers. This also allows workers to choose the

coverage that best supports their families’ financial wellness strategy.

Demonstrating The Value Of Disability Benefits

With the rise of chronic conditions among COVID-19 survivors both young and old, disability benefits are even more relevant to workers of all ages. The coverage and resources provided through integrated disability benefits are and will continue to be very attractive to workers as many individuals are still experiencing financial hardships brought on by the events of the past year. A qualifying disabling injury or illness could be devastating to employees and their families.

Offering integrated disability insurance and encouraging workers to enroll is a great opportunity for employers to show workers that their overall well-being is a priority to employers and help workers feel supported should they become not able to work due to a qualifying disability. Additionally, integrating disability and medical benefits can help control health care costs for both employers and employees, increase value and improve health outcomes for employees, reduce time out of the office, and serve as an effective retention and recruitment tool by showing current and future employees that they are valued and covered for every moment of health.

Scott Towers is president, specialty products, Anthem Blue Cross and Blue Shield. Scott may be contacted at scott.towers@innfeedback.com.

November 2021 » InsuranceNewsNet Magazine

47

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Financial facts and figures powered by AdvisorNews.com

COVID-19 Shifts Retirement Americans’ Plans For Many Investable Assets The COVID-19 pandemic forced many Up Nearly 50% From 2018

than one-third (35%) said the pandemic either moved up or pushed back their target retirement age. Almost a quarter

(24%) plan to retire later than previously exWHY DELAY pected, while 11% plan to retire earlier. That’s RETIREMENT? according to a Northwestern Mutual survey.

The youngest adults in the workforce 55% want to work and save more money.

— millennials and Generation Z — were most likely to expect an early retirement, 50% are concerned about health care with nearly 60% of that age group saying costs. they plan to exit the workforce prior to 24% are concerned reaching age 60. Overall, the average age about dipping into people expect to retire is 62.6, down slightretirement savings. ly from 63.4 last year.

SOURCE: Northwestern Mutual For those who said the pandemic prompted them to delay retirement, 39% said they will wait three to five years to retire. But more than a third (35%) say their timeline for retirement has shifted back more than a decade. For those planning to retire earlier than expected, almost half (48%) say they are moving up their timeline by three to five years.

UHNW Investors Show Optimism

Citi Private Bank’s Private Capital Group surveyed family offices and ultra-high-net-worth investors and found what it called cautious optimism looking ahead to 2022.

Four predominant themes emerged: 1) concern on rising inflation, 2) the prominence of high cash levels in the face of a low-yield environment, 3) continued growth in portfolio allocation to direct investing opportunities and 4) a marked comeback in portfolio values year over year, despite a prevalent degree of macroeconomic uncertainty.

Although more than three-quarters of all respondents seek returns of 5% or more over the next 12 months, the outlook is more optimistic for family offices with AUM over $500 million, with 30% seeking over 10% returns versus 19% of family offices with AUM under $500 million.

Worries Over Future Market Crash Reach Highest Levels In 2021 Not everyone is optimistic about their financial future. After a summer of relative calm, Americans are increasingly worried about retirement risks related to market volatility, inflation and COVID-19, according to a study from Allianz Life.

DID YOU KNOW?

72% of survey respondents say they are concerned the rising cost of living will impact their retirement plans.

SOURCE: Allianz Life

48

InsuranceNewsNet Magazine » November 2021

Americans have a whopping $67 trillion of investable assets, meaning advisors are fishing in a well-stocked lake. In fact, that figure is nearly 50% higher than three years ago, said Chip Roame, managing partner of Tiburon Strategic Advisors, in his annual research report on consumer wealth.

Unsurprisingly, retirement plan assets have grown nearly as well, doubling in 13 years to $29.9 trillion. Advisors and insurers are eager to take advantage of changes in the law that will make it easier to sell life insurance and annuities into these plans.

Consumer Households Investable Assets By Generation ($ Trillions) Silent Generation

$11.4

$10.4

$8.4

$40.7

Baby Boomers

$34.3 $26.2

$34.6

Gen X Millennials and Gen Z

$9.2

$18.7

$1.6

$4.5

2017

2022

$10.5

2027

The shift to defined contribution plans is reflected in the assets, with $9.6 trillion now held in defined contribution plans.

That figure was $3.4 trillion in 2008.

The study found that 54% of those surveyed in the third quarter are worried that a big market crash is on the horizon. Compare

that percentage with 45% in the second quarter and 52% in the first quarter.

As a result, more than one-third (36%) say volatility is making them nervous about their nest egg, and more than two-thirds (67%) say they are keeping some money out of the market to protect it from loss.

Source: Tiburon Research & Analysis

Americans to reexamine their financial, professional and personal lives. As a result, more

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May 2020 » InsuranceNewsNet Magazine

49

Taking The Long View On Long-Term Care Six takeaways to discuss with clients when considering their future expenses should they need long-term care.

• Ron Mastrogiovanni

A

mericans recognize that they may require end-of-life long-term care, but many choose to roll the dice instead of planning for these future expenses, despite the best efforts of their advisors. When it comes to LTC, encouraging clients to adequately plan requires an understanding of both the expected costs and the probability that care will be needed.

Drawing upon actuarial data and current LTC cost trends, HealthView Services’ most recent white paper, “LongTerm Care and Financial Planning,” and the planning tools it draws upon, provide this information as a foundation for LTC planning discussions with clients.

Here are six key takeaways.

1. Three out of four married couples will incur significant LTC costs.

Long-term care may not be the easiest retirement planning issue to bring up with clients, but avoiding the topic not only puts their financial and legacy plans at risk but also risks their care expectations in the final years of life.

A healthy 65-year-old male/female couple has a 44% and 56% chance, respectively, of needing some level of LTC if they each live to their actuarial life expectancies. Combined, there is a 75% chance that at least one spouse will require 50

end-of-life LTC. Assuming national average costs across all states and a blended average cost of care, the man can expect $237,368 ($123,881 present value) in total LTC costs. His spouse can expect costs of $373,712 ($183,841 present value), or 58% higher than her partner.

2. The duration of LTC costs reflects changing care needs and may be longer than clients anticipate.

Many LTC patients transition from home health care to assisted living to skilled nursing facilities. At each stage, clients will have to pay for different levels of service and cover generally increasing costs.

They may start with a home helper for a few hours a day, and several years later require 24-hour care at a facility. The period in a skilled nursing home — that many associate with care — is only one component of the LTC journey. The high overall cost of LTC care reflects these different expenses and the duration for which care will be required — which for a man will be 660 days, on average.

3. Women face unique LTC challenges.

Actuarially, women are projected to live two to four years longer than men. For male/female married couples, this longevity difference — combined with data indicating husbands are, on average, 2.3 years older than their wives — means that most women will outlive their partners. As a result, they need to ensure they have the financial resources to address their own LTC needs, which as the data shows, will

InsuranceNewsNet Magazine » November 2021

Healthy 65-Year-Old Woman’s Probability Of Requiring LTC In Five-Year Attained Age Increments Attained Age*

LTC Probability

Age 70

5.6%

Age 75

13.9%

Age 80

27.2%

Age 85

43.9%

Age 90

58.3%

*Attained Age reflects a scenario in which the person lives to reach the age listed. Source: HealthView Services

Cost Of LTC Services In 2021, National Average* Type Of Care

Cost In 2021

Nursing Home

$100,913

Assisted Living

$55,708

Home Health Care

$56,408

Blended Average

$69,508

*44 hours per week of home health care, consistent with industry standard; blended average based on care probabilities for an 85-year-old male. Source: HealthView Services

in general be significantly more expensive than that of their male partner.

On average, the duration of care for a woman across all settings will be about 11 months longer than for their spouse.

Since LTC may be required after a woman’s husband’s end-of-life care has consumed a substantial portion of the couple’s savings, financial advisors need to work with couples — and women in

TAKING THE LONG VIEW ON LONG-TERM CARE

LTC Probability At Life Expectancy By Gender And Health

65-Year-Old Female

65-Year-Old Male

LTC Probability

Length Of Care Required

Life Expectancy

LTC Probability

Length Of Care Required

Life Expectancy

Cardiovascular Disease

61.2%

946 days

88

45.1%

690 days

85

No Conditions

56.0%

992 days

89

44.3%

660 days

87

High Cholesterol

48.4%

1,000 days

87

37.1%

663 days

85

Tobacco Use

34.9%

1,053 days

84

25.5%

690 days

82

Type 2 Diabetes

32.7%

1,072 days

81

20.1%

700 days

78

Source: HealthView Services

particular — to develop a plan that ensures their needs will be met.

4. Location, age and health conditions matter in addition to gender.

Across state lines, costs can vary significantly for all care types. LTC expenses reflect the demographics of the location, with higher-cost areas, such as Connecticut and the District of Columbia, often topping the list of most expensive states and territories.

Notably, costs for 44 hours of weekly home health care in the District of Columbia are nearly double that of Louisiana, and that adds up to an annual difference of more than $42,000.

Narrowing cost comparisons within state lines shows a similar pattern, as higher-cost metro regions often come with greater LTC expenses. For example, someone in Washington state may spend more than 50% more for home health care than someone else in the same state, based on their area of residence. Age matters, because the younger the client’s current age, the higher the projected cost, with more years of LTC inflation driving annual expenses higher.

Health conditions also matter. Clients with chronic conditions are more likely to die younger than their healthy counterparts. The annual costs of care may be lower, but poor health often requires longer periods of care and thus higher costs.

5. Medicare offers shortterm care, but not longterm care.

Many Americans mistakenly believe that Medicare will cover LTC needs. The website Medicare.gov prominently displays the following statement: “You pay 100% for non-covered services, including most

long-term care.” Clients need to be reminded of this.

There is one instance in which Medicare recipients may be eligible for limited nursing home coverage: individuals whose injuries or conditions require an admission (not admission for observation) for a three-day inpatient hospital stay. They may receive up to 20 days of free care and another 80 days of subsidized care ($185.50 coinsurance per day). After this period, the patient assumes all nursing home costs.

Medicaid may cover LTC, but as advisors are well aware, this is only an option for clients with low levels of income and essentially no assets. In Massachusetts, for example, individuals are eligible for Medicaid if their annual pretax earnings are below $16,971 and they have less than $2,000 in total assets (or $3,000 for couples), including property.

6. There are options to help clients address the future cost of care.

This data provides advisors with a way to frame potential future LTC expenses.

A range of options is available to ensure that those expenses can be met for both spouses and reduce the risk that LTC costs derail plans for legacy giving.

Savings options may include one, or a combination of, the following: » Long-term care insurance. Premiums are based on a host of variables. A key benefit is that LTCi is available to address costs that may be incurred at any point during a client’s lifetime when care is required (subject to the contract terms). It is important to remember that catastrophic health events can result in long-term care being required at any age. » Other insurance products. Life insurance policies with a chronic illness

rider may provide payments for medical conditions such as Alzheimer’s disease that could require years of care. Annuities with LTC riders may provide contract holders with access to a portion of the death benefit to pay for required end-oflife health expenses. » Self-insurance. Since LTC expenses are generally incurred at the end of life, advisors can work with clients to make an investment today that will cover their future costs. A 50-year-old couple earning 7% annually on their investments could fund $855,000 in future nursing home expenses with a $74,935 investment today.

A health savings account is another way to help address LTC needs because it is not subject to required minimum distributions and withdrawals remain taxfree if used for approved health-related expenditures.

The data shows that LTC is both a high probability and high-cost event for clients. Advisors have access to a broad range of financial products and long-term investment strategies to help clients ensure that when care is needed, they will have the necessary financial resources to provide the comfort they seek at the end of their lives.

Ron Mastrogiovanni is CEO of HealthView Services. He may be contacted at ron.mastrogiovanni@innfeedback.com.

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November 2021 » InsuranceNewsNet Magazine

51

INBALANCE

Don’t Get Dragged Into The Social Media Wasteland Social media can be a wonderful tool for promoting your business and connecting with others, but it also can damage your mental health. How to recognize the dangers and protect yourself.

By Susan Rupe

F

ear of missing out — popularly known as FOMO. It’s a feeling that can propel us to achieve more, and it’s a feeling that can drown us in despair.

Social media platforms such as Facebook, Instagram and Twitter can fuel FOMO by making it seem as though everyone is leading more interesting lives than we are. Meanwhile, some social media users turn into “keyboard warriors,” sending off nasty screeds and even bullying and harassing others online.

You may have opened a social media account in the hope of keeping in touch with far-flung family and friends or promoting your business. But the barrage of political opinions, memes that often contain false information and the demonization of “others” is irritating and even 52

depressing. And seeing images of other people’s perfect-looking homes, parties and vacations can trigger FOMO. So how can you enjoy the good things about social media without letting it destroy your mental health?

Rasto Ivanic is a cofounder and CEO of GroupSolver, a market research technology company, which conducted a survey on the impact of social media on mental health. GroupSolver published a blog

post about the results of the survey, “Are We Connected or Isolated? How Social Media Impacts Our Mental Health.”

The results show that some social media platforms impact mental health more than others do, with Facebook having the largest impact, followed by Instagram.

Twitter was found to be home to more arguments than other platforms. The survey results also provided insights as to why this is as well as whether the overall

Which social media platforms do you believe have an impact on your mental health, either positive or negative?

InsuranceNewsNet Magazine » November 2021

SOURCE: GroupSolver

DON’T GET DRAGGED INTO THE SOCIAL MEDIA WASTELAND! INBALANCE impacts on users’ mental health are positive or negative.

The biggest reason social media impacts its users’ mental health is FOMO, Ivanic told InsuranceNewsNet. “A lot of people responded to our survey and said watching other people have what they perceive as a better life than they have affected their mental health. And there’s the aspect of appearance. People tend to see unrealistic beauty standards, those types of things. And there’s a lot of comparison among themselves about their way of life and their appearance in general.”

Despite FOMO and negativity on social media, survey respondents found many positives about participating on various platforms, Ivanic said.

“Social media is a place where people can find resources and communities, where they can relate and connect with others. That is especially important in these times, when it has been difficult to see people in person.”

But bullying and harassing are part of social media’s dark side, and Ivanic said this has a negative impact on users’ mental health.

“Social media has become an outlet for people to say inappropriate things,” he said. “The reason why this impacts our mental health so much is that you perceive you are limited in taking action to defend yourself or correct the action taken against you. Even though you can report this to whoever is in charge of the platform, what we find is that people don’t trust the system or they’ve tried to report bad behavior but nothing happens. When you have someone bullying you on social media and nothing is done about it, you can imagine what that does to your mental health.”

Those who have had enough of negativity and bullying on social media may think the solution is to stop using the platform altogether, but that presents another dilemma, Ivanic said.

“If you continue to use social media, you risk getting beat up from time to time. But with so many interactions happening on social media today, if you completely take yourself out of it, you’re no longer connected to your community, and that’s essentially a punishment. So you face two choices, and neither one of them is good.”

Ivanic said he notices that the more

Whistleblower Speaks Up About Social Media’s Emotional Harm The former Facebook product manager for civic misinformation told a Senate panel that the platform’s algorithms are designed to steer users toward high-engagement posts that in some cases can be more harmful to users’ mental health.

Frances Haugen called for Congress to intervene to solve the “crisis” created by her former employer’s products, and she said young users are especially vulnerable.

She said Facebook’s algorithm could steer young users from something relatively innocuous such as healthy recipes to content promoting anorexia in a short period of time.

A Wall Street Journal report also pointed the finger at Instagram, saying the platform is particularly harmful to teenage girls. That prompted even stronger calls from lawmakers for Facebook to end plans to launch a version of Instagram for kids.

The Journal’s report also claimed that Facebook was a major source of COVID-19 vaccine disinformation and that the company was slow to respond to reports that Facebook users lured women into trafficking, incited violence, and promoted organ selling and pornography. time people spend communicating online instead of in real life, the more likely it is that misunderstandings spiral out of control.

“When somebody says something you don’t like or that has a negative effect on you, the buffer between you and that person is much thinner online than it is in real life. So it’s easy to cross the line. I’ve seen more tension and misunderstanding between people online than there would be if they were in person. If they were in person, they normally would have resolved the issue in a matter of 10 minutes or over lunch. But instead it boils over into a much bigger conflict online. And typically, because it’s in public view, the other people who are watching them are affected by it too.”

How do you use social media in a mentally healthy way? Ivanic said one key is by using critical thinking skills.

“We need to be the editors of the information we receive,” he said. “I think social media is so exciting because

things happen fast, you see amazing images and connect with people you are interested in, and you want to feel good about it all. But sometimes we forget to think for ourselves. What is real? What is true? Is someone using social media to advertise to you? And don’t go off on everything you read. Don’t let yourself be triggered.”

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

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November 2021 » InsuranceNewsNet Magazine

53

BUSINESS

Six Tips For Building Trust With Clients Education, communication and positivity are key attributes that will create a trusting client relationship.

By Lyle D. Solomon

D

eveloping and keeping great client relationships is difficult, and one’s level of skill at this can make or ruin almost any business. Businesses benefit from higher performance ratings, lower churn rates, fewer expenses and higher margins when they focus on creating customer trust and loyalty.

This is especially true for insurance advisors who want to build trust with their clients and prospects. The trust

across every encounter. Satisfied policyholders are more likely to tell their friends and family about your services, and that can help you grow your business.

Here are six tips to build trust with clients and prospects.

1

Educate your clients first.

You are providing solutions for your clients’ insurance needs. So you must face multiple questions about the coverage you suggest to a client.

You must have a thorough knowledge of the policies to respond to their questions confidently.

As you’re selling insurance, explain why it’s important, what it does and how it can protect them. Relate the advantages to their specific situation. Educate

“It takes 20 years to build a reputation and five minutes to ruin it.”

— Warren Buffett factor works in every step of the insurance business, from choosing the best policy to submitting a claim.

It’s important to build client relationships and trust by establishing yourself as trustworthy, reliable and competent.

It takes sheer effort, time and resources to build a trustworthy relationship.

The key to your success is that your clients regard you as capable and dependable. You may successfully enhance retention and grow your business by aiming to offer a fantastic client experience 54

them on how different types of insurance function and who qualifies for them.

Make sure that your clients understand the value of your service in a way that allows them to grasp how it relates to their own lives and particular insurance needs. Clients will feel more at ease with their interactions with you if you can display a thorough knowledge of the insurance policies, operations and additional benefits. This way, you build trust with your clients and enhance your conversion rate.

InsuranceNewsNet Magazine » November 2021

You can ask your clients questions to identify what areas you missed and then provide any necessary additional information.

2

Communicate with clients proactively.

One of the most crucial aspects of advisor-client interaction is proper communication.

Building a trustworthy advisor-client relationship requires effective communication. Being proactive and responsive shows that you care about clients’ needs. By carefully listening to clients’ questions and breaking down important policy concepts, you can focus on having more high-quality interactions. You should be polite, courteous and respectful at all times, and show your clients you’re a person they can trust.

Find opportunities to communicate with your clients that help you improve your relationship with them. You may use billboard advertisements, TV commercials, agency websites, newsletters, social media platforms, chatbots, text messages, emails or any other form of communication to proactively reach out. Determine your target audience and their preferred communication channels when offering appropriate insurance advice.

3

Don’t waste your clients’ time.

Your clients have busy schedules to keep and important meetings to attend, just as you do. So by respecting clients’ time, you will go a long way in keeping their trust.

When you schedule an appointment for a specific day and time, be sure you show up. Always make prior calls to your clients and schedule meetings according to their comfort level. When you say you’ll call someone back, follow through as soon as possible.

4

Show your expertise.

Today’s clients always compare costs, businesses and policy information online to find solutions to their insurance needs.

But that doesn’t mean they have all the details of the policies you offer them.

Use this chance to establish trust by exhibiting a thorough knowledge of your

SIX TIPS FOR BUILDING TRUST WITH CLIENTS BUSINESS products and how they might benefit your clients.

Keep yourself updated with the latest market information on policies and services. Many insurers regularly introduce

Only suggest policies that make sense and fit your clients’ demands.

Use testimonials and online reviews to display your expertise and gain trust with new clients. It’s a great way to

“It takes two to do the trust tango — the one who risks (the trustor) and the one who is trustworthy (the trustee); each must play their role.”

6

— Charles H. Green, The Trusted Advisor new value-added services, digital tools and noninsurance items. The more you understand how different coverages work, the better you’ll be able to match insurance to your clients’ needs.

Choose reliable insurance provider companies that you know will help your client. When you can provide several options, you show your clients that you are interested in helping them obtain the best coverage they need, rather than simply selling them any policy.

strengthen your goodwill and get people talking about you.

5

Keep your commitments and don’t make excuses.

You must keep your commitments if you want to earn your clients’ trust. To improve your relationship, focus on input from clients and determine whether you are meeting their needs and expectations.

Errors or problems can occur at any

“When the trust account is high, communication is easy, instant and effective.”

— Stephen R. Covey

time. But what matters is how you deal with the situation. Keeping a positive attitude can build trust, even if the situation gets critical.

Make no excuses for the mistake.

It doesn’t matter what went wrong in most cases. Fix it as soon as possible and move on.

It’s never a good idea to make promises you can’t fulfill. Misrepresenting a policy’s features or promising something you can’t deliver will destroy trust.

Keeping your commitments can earn you favorable feedback from clients and increase loyalty. Failure to maintain your responsibilities and making excuses can quickly harm your reputation, as well as ruin the trust between you and your clients.

Don’t trash-talk your competitors.

Too often, businesspeople trash-talk their competitors to make themselves look better and close a deal quickly. Of course, it’s easy to criticize your competitors, but that tactic usually backfires. Trash-talking competitors causes clients to view you as petty and untrustworthy.

Don’t engage in negativity. Instead, focus on the benefits you can offer your clients. Describe why what you provide is a better match than what is offered by a competitor.

Finally, to impress your customers, don’t strive to be someone you’re not.

Unusual behaviors, aggressive pitching, trash-talking and other negative activities can make clients confused, and you’ll come out as untrustworthy in the end. Instead, be honest with yourself and with the clients. That’s how you can build a strong, trustworthy relationship.

Lyle D. Solomon is principal attorney for the Oak View Law Group in Los Altos, Calif. He may be contacted at lyle.solomon@innfeedback.com.

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55

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INSIGHTS

Variable Annuity Sales Are On The Rebound The shift to simpler, straightforward VA products is a winning proposition in the current environment.

By Todd Giesing

I

n 2007 — before the Great Recession — variable annuity sales were $184 billion, representing more than 70% of the total U.S. annuity market.

Over the next decade, economic and regulatory changes — as well as product innovation in fixed indexed annuities — shifted the annuity landscape as consumers sought out protection-focused products and carriers carefully managed their VA book of business. By 2020, VA sales were just under $102 billion, holding just 42% of the total annuity market, according to the Secure Retirement Institute U.S. Retail Annuity Sales Survey.

Evolution Of VA Products

Today the VA market has diverged into two distinct markets: traditional VAs, primarily used for accumulation, tax deferral, and guaranteed income solutions; and registered index-linked annuities, a rapidly expanding product line, which offers investment growth opportunity while minimizing risk from market downturns.

Since the Great Recession (when close to 90% of VA contracts included a guaranteed lifetime benefit rider) many VA carriers have limited their VA GLB business and some have exited the GLB market altogether. A decade of ultra-low interest rates and a more cautious approach to risk management have prompted carriers to pivot to less market-sensitive products.

This has created significant consolidation in the VA GLB market, with the top three carriers in 2020 accounting for 50% of all VA GLB sales. We believe this will present opportunities for smaller carriers with lower risk profiles to compete in the VA GLB market.

56

That said, the shift to simpler, straightforward VA products is a winning proposition in the current environment. For the first time since the early 2000s, non-GLB VA sales have outperformed VA products with GLB riders. Traditional VA sales were $22.7 billion in the second quarter, a 37% increase from the prior year. Year to date, traditional VA sales totaled $43.6 billion, up 16% from the first half of 2020.

Yet consumers’ desire for protected investment growth remains strong, and RILAs are providing the most attractive

A Shift To Accumulation

Creating income is expensive in a low interest rate environment. When we look at the VA market from an investment objective perspective, we see the largest growth in products that focus on market growth potential — VA products without GLBs elected or available, and guaranteed minimum accumulation benefit-elected sales.

VA sales in this category have jumped 35% over the past five years, from $38.7 billion in 2016 to $52.4 billion in 2020. Meanwhile, sales of VA products that generate deferred

The resiliency of the VA market has been driven by product innovation, adoption of technology, and increasing demand for products that provide investment yields and protection. option in a low interest rate environment. Over the past five years, RILA sales have quadrupled from $6.3 billion in 2016 to $24.1 billion. Several carriers, recognizing this market opportunity, have entered the market. In 2016, there were just a handful of companies in the RILA market. Today, there are 15 carriers offering RILAs. With more carriers offering RILAs and the expected expansion of carriers offering GLBs in these products, SRI is forecasting RILA sales to continue their trajectory, doubling sales by 2025.

Distribution Trends

For the past five years, independent broker dealers have dominated overall VA sales, growing their market share to represent more than 40% of VA sales in 2020.

During the pandemic, IBDs adapted more quickly to the virtual sales environment than other channels did. In the second half of 2020, sales of VAs through the IBD channel increased 13%. Career agents’ VA sales also rebounded substantially after the start of COVID-19. The sales in other channels — banks, independent agents, national BDs and direct to consumer — have remained steady or fallen during the pandemic.

InsuranceNewsNet Magazine » November 2021

guaranteed income — VA products with guaranteed lifetime withdrawal benefit, guaranteed minimum income benefit or guaranteed minimum withdrawal benefit riders elected — have fallen 36% since 2016. SRI expects this trend to continue until interest rates improve, which would allow manufacturers to provide living benefits with more competitive features.

The resiliency of the VA market has been driven by product innovation, adoption of technology and increasing demand for products that provide investment yields and protection. The VA market is not what it was prior to the financial crisis in 2008, yet it remains the top selling annuity product in the U.S. While the market changed and VA carriers diversified their offerings, VA products continue to be a staple for advisors helping their clients navigate retirement. With that, we are projecting this market to grow as much as 5% to 10% every year through 2025.

Todd Giesing is assistant vice president and head of annuity research, Secure Retirement Institute. He may be contacted at todd. giesing@innfeedback.com.

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INSIGHTS

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

Protecting Clients’ Retirement Income From Taxation Advisors must diversify clients’ assets to include taxfree sources of income.

By David C. McKnight

I

n the next few decades, the federal government will have to deliver trillions of dollars in promised Social Security and Medicare benefits. With reserves depleting, the only realistic way for the government to honor these commitments is to raise taxes.

Some experts believe taxes must double to keep these programs solvent. This poses a problem for the average American investor who has accumulated most of their retirement savings in tax-deferred accounts.

To shield clients from a potential tax tsunami, advisors must diversify clients’ assets to include tax-free sources of income.

Tax Trap

From a tax perspective, investments fall into three buckets. The first is the “taxable bucket,” covering any account that generates a Form 1099. These accounts are highly taxable but tend to be very liquid and work well as emergency funds.

Generally, the taxable bucket should hold between three and six months’ worth of basic living expenses.

The second bucket consists of “tax-deferred” accounts, which includes traditional IRAs, 401(k)s, 403(b)s, simplified employee pensions, SIMPLE IRAs, etc.

While the rules governing these accounts differ, they all share two features: contributions are tax-deductible and distributions are taxed as ordinary income.

This setup works well if an investor believes they will be in a lower tax bracket in retirement. But given the looming insolvency of our nation’s entitlement programs, this may not necessarily be the case.

Deferred, Not Diminished

The problem with tax-deferred accounts doesn’t stop there. At retirement, your 58

clients have likely lost all the deductions they enjoyed during their working years.

For example, if your client’s house is paid off, they’ve lost their mortgage interest deduction. If their children have flown the coop, there’s no child tax credit.

Furthermore, during retirement they’re no longer making tax-deductible contributions to retirement plans. Finally, instead of donating money to charities, most retirees donate their time.

By retirement, the only deduction most clients have left is the standard deduction: $25,100 if filing jointly, $12,550 if filing single. So, if a client retired today on $120,000 of gross income, their taxable income would be $94,900. That puts their marginal tax bracket at 22%! Throw in another 6% for state income taxes, and that totals 28% on the margin. That’s a lot higher than most people think!

To compound matters, the tax-deferred bucket in retirement can feel a bit like being stuck between a rock and a hard place.

What’s the rock? The rock is when clients don’t take enough money out. At age 72, an IRS-required minimum distribution comes into effect. If clients don’t take it, they pay an excise tax of 50%. What’s the hard place? Withdrawing too much money. This could force a client into a higher tax bracket and cause them to lose a portion of their Social Security to taxation.

Social Security taxation is tied to what the IRS calls “provisional income.” What counts as provisional income? Any income reported on a 1099, any distributions from a tax-deferred account, and half of your client’s Social Security benefits. If provisional income is greater than $34,000 as a single filer, or $44,000 as a married filer, then up to 85% of your client’s Social Security benefits can become taxable at their highest marginal tax rate. In short, darned if you don’t take out enough money, and darned if you take out too much.

Securing Retirement Safety

Finally, we consider the tax-free bucket.

InsuranceNewsNet Magazine » November 2021

To be truly tax-free, investment accounts must satisfy two tests. First, withdrawals cannot trigger federal, state or capital gains taxes. Second, withdrawals cannot count as provisional income. There are a few truly tax-free alternatives that clients can use in shielding their retirement savings from the impact of higher taxes.

One true tax-free investment account is the Roth IRA. Once contributions are made, they grow tax-deferred and, after age 59 1/2, both principal and earnings can be distributed tax-free. Furthermore, distributions do not cause Social Security taxation.

Another tax-free investment that comes with more limitations is a health savings account. Contributions grow tax-deferred and can be used to pay for qualifying medical expenses tax-free. Other tax-free withdrawals can be made when clients reimburse themselves for qualifying medical expenses paid for out of pocket.

Permanent life insurance can also be a way to build wealth in the tax-free bucket.

Contributions to permanent life insurance policy cash values grow tax-deferred, and policy loans can be taken out tax-free without having to be paid back while the policyowner is alive. There are no contribution limits, no income limitations, and in some cases, clients can access death benefits prior to death to pay for long-term care.

To shore up weaknesses in Social Security and Medicare, the government may soon be forced to raise taxes on virtually all Americans. With careful planning, however, advisors can help clients protect their investment accounts and maximize their after-tax retirement income.

David C. McKnight, a four-year MDRT member, is the president of Power of Zero and the author of best-selling books The Power of Zero and Tax-Free Income for Life. He may be contacted at david.mcknight@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.

Long-Term Care Is A Subject You No Longer Ignore The financial impact of a long-term care event is something that advisors must address with clients.

By Dan Mangus

T

hrough decades of dealing with clients, I have seen firsthand the many difficulties a family faces when one of its members has an extended illness. Without proper planning, the person who is ill often must watch helplessly as their personal finances dwindle and they deal with the emotional stress of feeling like a burden to the family that is trying to help physically and financially. For the caregiver, taking care of a loved one frequently takes a toll on virtually every aspect of their lives: emotionally, economically and physically.

As we read article after article showing shockingly high statistics for those 65 and older that point to the increased risk of the need for long-term care, we can’t help but realize how important the topic is. When you add in the pandemic that brought new realization to the potential frailty of health, you know we face a real problem.

The financial impact that is all too often associated with access to care should be addressed during any planning meeting with your clients.

Finding An LTC Solution

Many individuals mistakenly believe that Medicare will pay for help with everyday activities, including dressing, bathing, using the bathroom, home-delivered meals, adult day care and other services.

The 2021 Medicare & You Handbook states clearly on page 52 that Medicare does not cover these services, so your clients will need to develop an alternate plan to pay for these needs.

Long-term care insurance is often a viable solution. An individual pays for longterm care insurance with their money, but their health is actually what enables

them to buy it. So if you have a client who is currently in good enough health to purchase proper coverage, it is imperative that you offer them the opportunity to do so. However, when you encounter a client already dealing with a health condition, finding solutions that help them will change their life and change their family members’ lives as well.

Here are two examples of reasons individuals face the need for long-term care, as well as some resources to consider:

1. Stroke

Stroke is a leading cause of serious longterm disability. Stroke recovery can be a confusing and challenging process for the survivor and the caregiver.

The American Stroke Association is the place to find resources. Medicare pays for a variety of preventive services, including cardiovascular disease screening.

2. Alzheimer’s disease

Older individuals with Alzheimer’s disease or other forms of dementia have twice as many hospital stays per year as other people in the same age bracket.

Seventy percent of the total lifetime cost of caring for someone with dementia is borne by families — either through outof-pocket health and long-term care expenses or from the value of unpaid care.

Alzheimer’s Association offers many resources, and Medicare pays for a cognitive assessment as part of an annual wellness visit.

If you work with individuals who are on Medicare, you know you are working with a population at high risk for needing extended care. Go to Medicare.gov to learn more about coverage for skilled nursing facilities, durable medical equipment and home health services.

If you are sidestepping the topic of long-term care because you need more education, please seek out the information you need to help your clients. If you choose not to work with long-term care insurance, then use it as an opportunity to network with others who do. The worst thing you can do, though, is avoid the topic altogether.

Dan Mangus is vice president of growth and development at Senior Marketing Specialists in Columbia, Mo. He is a nationally recognized thought leader on Medicare and long-term care issues and is an expert contributor to NAIFA’s Limited and Extended Care Planning Center. He may be contacted at dan.mangus@innfeedback.com.

November 2021 » InsuranceNewsNet Magazine

59

INSIGHTS

With nearly 100 years of experience, The American College is passionate about helping students expand their knowledge and opportunities as financial professionals.

Moving To A StakeholderFocused Business Purpose When businesses put purpose before profit, they can lead the way in addressing social challenges while innovating in new products.

By Domarina Oshana

I

t has been two years since the Business Roundtable’s statement on the purpose of a corporation, which read that companies should be concerned about serving all their stakeholders, not only their shareholders. This represents a mindset shift in business, consistent with the trend toward “stakeholder capitalism.”

It has been especially evident during the global events of the past year and the ongoing pandemic, which have spurred some corporations to step up their philanthropic support and community service.

Grab, Southeast Asia’s ride-hailing company, demonstrates a tangible example of corporate purpose with heart for its stakeholders. In addition to transportation, the company offers food delivery and digital payment services via a mobile app. Although the company has grappled with some problems, it is interesting to learn how a focus on social impact led Grab to financial services. The company set up their drivers with bank accounts, thereby enabling them to receive their paychecks through direct deposit. This filled a need for their unbanked and underbanked drivers.

Grab’s approach demonstrates a stakeholder-focused program. Why? Because its choice to recognize a stakeholder need and to meet stakeholders where they are illustrates an effort to build trust through affective symmetry. By aligning with its stakeholders’ needs, Grab strengthened emotional connections, and thus increased trust with their drivers.

At The American College Cary M. Maguire Center for Ethics in Financial Services, our research has identified that balancing symmetries in relationships is an important element of stakeholder 60

culture within the financial industry. The Relationship Balance Model, developed by our Maguire Fellow in Applied Ethics, Caterina Bulgarella, helps financial institutions identify trust opportunities and understand how stakeholders use trust as an accountability mechanism in reducing asymmetries and/or creating symmetries in their relationships. When businesses put purpose before profit, they can lead the way in addressing social challenges, while innovating in new products.

For financial institutions, one lesson to learn from Grab’s example is to more proactively identify and act on unmet stakeholder needs. Financial institutions could start by questioning how their actions (or inactions) affect people in their organizations as well as people impacted by them.

This approach flips the typical business case equation from a traditional view of “what’s in it for the business” to a stakeholder-focused impact analysis, as recently remarked in a commentary for Fortune written by Azish Filabi, executive director of the Maguire Center for Ethics.

Companies can be more stakeholder-focused through strategies such as collecting feedback through periodic touchpoints with employees and clients to learn insights about important elements of the employee and client experiences. For employees, such feedback might raise opportunities for the company to support volunteering in the community or managing life transitions, such as the need for child care or elder care. For clients, listening to experiences highlighted by client support staff and using email to communicate regularly with clients may reveal life changes meriting hardship assistance, such as when a terminal illness affects a family financially.

Although I am not endorsing any company or their specific approach, I believe financial institutions can use these examples to self-initiate opportunities for purpose-driven innovation. We all have heard the expression “Be kind — you never know what someone else is going through.” This

InsuranceNewsNet Magazine » November 2021

saying calls forth the intentional practice of empathy. What would society look like if financial institutions operated with a central focus on humanity — asking their employees and clients questions such as “What’s happening in your life right now?” or “What do you need most?” and then helping to meet those needs. It may be a pipe dream, but I believe financial institutions could act on the insights these types of questions provide to create opportunities that nurture an impact-minded stakeholder culture.

Financial institutions may also consider adopting a framework for connecting their business strategy to quality-of-life improvements for the betterment of society.

Drawing from my own professional experience, what I aspire to in my own research and that which I’ve helped enable, I suggest considering the spirit of the National Science Foundation’s Broader Impacts Framework. It is a guide to help social, behavioral and economic scientists more effectively communicate their projects’ potential benefit to society.

Leaders in the financial industry might adapt this framework to ask and answer questions such as “Who can our products empower?” “Who benefits from that empowerment?”, and “What concrete steps can we take to make these broader impacts more likely?”

By thoughtfully considering and articulating the potential broader impacts of financial products and services, the financial industry can advance business and social good. It may also help shift stakeholder mindsets of financial services from an industry perceived as transactional to one that is transformational.

Domarina Oshana, Ph.D., is a social scientist and research development professional. She is the research director for corporate programs for The American College Cary M. Maguire Center for Ethics in Financial Services. She may be contacted at domarina.oshana@innfeedback.com.

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