InsuranceNewsNet Magazine | April 2025

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NOW THAT PRESIDENT DONALD TRUMP AND FELLOW REPUBLICANS CONTROL ALL LEVERS OF GOVERNMENT, THE FOCUS IS ON HIGH NET WORTH CLIENTS PAGE 12

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IN THIS ISSUE

INTERVIEW

6 Hitting the accelerator on annuities

From her start as an intern to heading product development, Alison Reed discusses her unique career at Jackson National Life.

IN THE FIELD

24 More than luck

By Susan Rupe

Kevin Tostado took a chance on making an Emmy-winning documentary about the game of Monopoly. Now he helps his clients rely on more than luck to attain financial security.

FEATURE

HNW clients take center stage under Trump

By John Hilton

High net worth clients are the clear winners of the new administration’s strategy. What advisors must know.

HEALTH/BENEFITS

38 The power of ‘no’: Turning passive enrollment into active decisions By Tom Smith

LIFE

30 How partnering with a CPA firm boosted my life insurance practice

By Steven J. Spector

What you should know if you think this is the right move for you.

ANNUITY

34 Choosing the scenic route: Why diversification matters

By Lori Seaton

Diversifying within an annuity helps clients stay on course no matter what surprises the market brings their way.

How brokers can drive engagement in employee benefit decisions.

ADVISORNEWS

42 Retirement challenges differ regionally By Ayo Mseka

Attitudes and actions regarding retirement vary, depending on where investors live.

BUSINESS

44 Conquering self-sabotage and shushing negative self-talk By Casey Cunningham

Ways to master your mental foundation and build mental resilience.

IN THE KNOW

46 Premium financing: A two-edged sword? By Doug Bailey

Premium financing can be a valuable tool — if used correctly.

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Some offbeat ways to meet high net worth prospects

In conjunction with this month’s feature on serving the high net worth market, I’ve assembled some interesting and offbeat ways to meet HNW prospects, all taken from articles published on InsuranceNewsNet.com.

I looked for suggestions that were a little different and might give you some new perspective on developing your prospect list. I’d love to hear back from our readers on unique ways you’ve met and cultivated high net worth clients. If you have an original strategy for meeting HNW prospects, please email me with your suggestion at editor@InsuranceNewsNet.com and include “HNW” in the subject line.

Here are 13 strategies.

1. Participate in luxury sports activities

Involvement in sports like golf, tennis or sailing offers informal environments to meet affluent enthusiasts.

2. Join exclusive social clubs

Becoming a member of prestigious social clubs allows you to mingle with affluent individuals in relaxed settings, fostering genuine relationships.

3. Attend high-end charity events

Participating in upscale charity galas and

fundraisers provides opportunities to network with philanthropically inclined HNW individuals.

4. Engage in art and cultural circles

Frequenting art exhibitions, museums and cultural events can connect you with patrons and collectors who value the arts.

5. Network through philanthropy

Many HNW individuals are involved in charitable activities. Participating in or supporting philanthropic events allows you to connect over shared values and causes.

6. Offer specialized services

Providing tailored solutions, such as estate planning or tax optimization, can attract HNW clients seeking expertise beyond standard financial services. Demonstrating a deep understanding of complex financial needs sets you apart.

7. Collaborate with other professionals

Building relationships with attorneys, accountants and other advisors who serve HNW clients can lead to referrals. A network of trusted professionals enhances your credibility. (Check out “How partnering with a CPA firm boosted my life

8. Volunteer for nonprofit boards

Serving on boards of reputable nonprofits aligns you with community leaders and HNW donors.

9. Engage in travel circles

Affluent individuals often have a passion for travel. Sharing experiences or participating in luxury travel clubs can create common ground.

10. Participate in high-profile organizations

Joining organizations that attract affluent individuals provides a platform to meet potential clients. These settings offer regular events and meetings, creating opportunities for meaningful interactions. Tiger21 and Young President’s Organization, for example, sometimes allow financial advisors to join as affiliate members or to participate as guest speakers.

11. Join investment clubs

Participate in clubs or groups focused on investment opportunities, which attract members interested in wealth growth.

12. Offer pro bono services to startups

Assist emerging entrepreneurs who may become affluent to build relationships early in their success journeys.

13. Participate in wine or culinary societies

Affluent individuals often appreciate fine dining and wine; joining these societies can provide networking opportunities.

John Forcucci Editor-in-chief

Correction: In last month's issue, in the article "Whatever happened to DEI?," a quote was incorrectly attributed to Vanessa Matsis-McCready, associate general counsel and vice president of HR services at Engage PEO. The quote should have been attributed to Michelle Smith-Cotto, assistant general counsel and HR consultant with Engage PEO.

insurance practice” by Steven J. Spector in this issue on page 30.)

Economy showing momentum despite uncertainty

The U.S. economy showed momentum in early 2025 de spite lingering uncertainty in the wake of the November elections. The Conference Board gave an optimistic out look for the economy this year but cautioned that tainty about tariffs and immigration could weigh heavily on that outlook as the year progresses.

Conference Board economists predicted strong momen tum in the economy, as consumers are willing to spend.

President Donald Trump’s tariff plan would cut the growth of U.S. gross domestic product while swelling inflation, said Yelena Shulyatyeva, senior economist. The effects of these tariffs, Shulyatyeva said, would be a drop of nearly 1 percentage point in U.S. GDP over the next four quarters, while raising inflation by 0.6 percentage point during that same period.

GDP growth is predicted to be about 1% for 2025, which could be problematic, Shulyatyeva said. At that rate, GDP growth could go into the negative range by year’s end, she noted.

SHOULD OIL COMPANIES BE ACCOUNTABLE FOR CLIMATERELATED DISASTERS?

In a bid to do what he says will lower property insurance costs, a California lawmaker has filed a bill to make oil and gas companies accountable for climate change-related natural disasters. Called the Affordable Insurance and Climate Recovery Act, the law, if enacted, would allow victims of natural disasters to sue fossil fuel companies for damages.

Like efforts to make weapons manufacturers liable for gun-related crimes or tobacco companies responsible for smoking-related illnesses, the bill claims that oil and gas corporations have long been aware of the environmental risks associated with their products and have misled the public about these dangers.

The increasing frequency and severity of climate disasters have sent insurance

prices skyrocketing across California and have pushed many families into the state’s insurer of last resort, the FAIR Plan. From 2018 to 2022, California had the largest number of average acres burned annually and the most residences destroyed due to wildfires of any state in the United States. The preliminary assessment of damages from the Palisades fire is more than $250 billion.

INSURERS MUST BE FLEXIBLE IN 2025

A new administration in Washington continues to add uncertainty to the broader macro environment, so this year insurers must be strategically flexible. That was the word from Conning as the research company gave its outlook for the coming year.

Insurers must remain adaptable to seize emerging opportunities, as several key trends will shape the 2025 insurance

When people think about tariffs, they typically think about goods they might get from somewhere else. Many times, we don’t think about services like car insurance.”

Matt Brannon, Insurify

landscape. Scott Hawkins, head of insurance research for Conning, listed four forces that will drive the insurance industry this year: economic growth, insurance regulation, growth of artificial intelligence and shifts in reinsurance

Insurers are focusing on efficiency for the coming year, said Alan Dobbins, Conning’s director of insurance research. Carriers are increasing automation, streamlining operations and continuing to find opportunities to reduce costs — whether through increased use of artificial intelligence or reduced staff.

THE US ECONOMY DEPENDS ON THE WEALTHY

Stubborn inflation and high prices are causing headaches for the average American. But those who are well off keep on spending.

Moody’s Analytics said that households earning $250,000 or more annually — about 10% of the population — account for nearly half of all spending. High earners increased their spending by 12% between 2023 and 2024.

In addition, the net worth of the top 20% of earners has risen by more than $35 trillion, or 45%, since the end of 2019, according to the Federal Reserve. Net worth grew at a similar rate for everyone else, but it translated to a lot less money — an increase of $14 trillion for the bottom 80%.

From her start as an intern to heading product development, Alison Reed discusses her unique career at Jackson National Life, and how she is helping to accelerate the future of annuities.

An interview with Paul Feldman, publisher

“Iwas finishing my last two quarters of graduate school, and I needed an internship. I applied and got an internship at Jackson.” That opportunity began a 23-year trajectory that eventually led to Alison Reed’s becoming chief operating officer of Jackson National Life Distributors — Jackson’s marketing and distribution business — and then, in December 2024, chief product development and strategy execution officer.

In her new position, Reed is leading the way for one of the industry’s top annuity sellers to develop new products, product strategy and cutting-edge technology. “At

Jackson, we fully believe in freedom of choice,” Reed said, adding, “and the product solutions are not one size fits all ... so the consumer is getting exactly what they need at that right level of cost.”

In this interview with InsuranceNewsNet Publisher Paul Feldman, Reed discusses her unique path at Jackson and what she hopes to accomplish in the future.

Paul Feldman: Congratulations on the new position as chief product development and strategy execution officer. Can you tell me a little bit more about what you plan to do in that position and what you want to accomplish?

Alison Reed: I can start by giving maybe a little background on my career progression at Jackson into this position, and then also take a little deeper dive into the position and my responsibilities. I have a unique background at Jackson, where I started in 2002 as an intern. That was 23 years ago.

I’ve grown through multiple roles into senior-level management positions and now as chief product development and strategy execution officer. Throughout my career at Jackson, I’ve generally had some level of participation in Jackson’s product portfolio. But as Jackson became an independent company in 2021, the focus on strategy has become more important and

critical to the organization.

Within this role, I oversee Jackson’s product solutions group. That includes our product strategy team. The product strategy team also covers competitive insights and intelligence of the industry and other carriers. That team also oversees the product management team, which is handling our existing product portfolio.

Within that team, they manage our existing portfolio as well as enhancements and changes to any of our existing products on the platform, both currently marketed and nonmarketed products. That team also is responsible for all product illustrations.

The other team I oversee is called distribution technology and execution. That team is responsible for all our product launches, bringing the products to market once they have been approved by Jackson’s product development working group. This team also is in charge of our distribution technology portfolio. They ensure that all the technological needs are met for our wholesalers, internal and external, and make sure we’re most efficient and effective in the field through use of technology.

Feldman: Tell me how you got into the business in the first place. This started as an internship. At the time, did you think this would become your long-term career?

Reed: Definitely not — I didn’t foresee it. Jackson is a company of growth and innovation, which excited me. I have been touching product throughout my term at Jackson. I started in more of a due diligence role for the company and their broker-dealer network, reviewing and approving products for sale by their financial advisors. And that eventually expanded into becoming the manager of the variable annuity product portfolio.

That was in 2008, which was a very interesting time in the market, going into 2009 with the financial crisis. But from there, I realized Jackson had priced the products the right way. They had a disciplined approach, and we came out on the other side of the financial crisis as a leader in the industry and the annuity industry.

Jackson has just been a great company to work for in terms of their support, the stretch opportunities that they’ve provided me, not only in product and strategy

areas but also other areas of the company, as well as support through any life changes that have occurred for me in my 23 years with the company.

I serve and participate in a Jackson mentorship program for associates. I also am a leader of the Empower Business Resource Associate group, which is a group focused on women in business and women specifically at Jackson in the growth stage of their careers. I participate in career pathing and career workshops for our associates as well. So I certainly try to give back to all the associates at Jackson based on my unique career and progression that I’ve been fortunate to have in the firm.

Feldman: It sounds like an amazing journey. What do you hope to accomplish going forward?

Reed: There are a few things that we want to focus on in the future for Jackson. One is to speed up our work with our current products and channels. We have a diversified product portfolio, and we continue to want to grow in those products. We also want to do more in our current partnerships.

Jackson primarily distributes through their traditional broker-dealer channel. However, we are expanding into the registered investment advisor channel as well. And in December 2024, we announced a partnership with Chase in which we will distribute our RILA product going forward.

Another big aspect of my role is continuing to diversify our product portfolio, as well as new relationships and other channels. With new product opportunities, we want to continue to expand into the defined contribution space and codevelop with different plan sponsors or asset managers and bring protected retirement solutions to market, whether they are inplan solutions or out-of-plan solutions.

We’re also researching the contingent deferred annuity area, which is essentially a stand-alone benefit guarantee. It’s unbundling traditional VA with living benefits and focusing on that income solution as a wrapper for more traditional investment options.

And then the final area with my role is in technology — digital transformation and making the overall experience for advisors and consumers more seamless and integrated.

Feldman: Let’s go back to the defined benefits area because we’re hearing a lot about that. Can you talk about why it’s such an important area to expand into at this point?

Reed: A couple of reasons. I think what’s really opened the door is SECURE 2.0. That certainly opened the door for broader conversations.

Jackson has a lot of great partnerships through our variable annuity products with a lot of asset managers that are interested in expanding into this space. So with their expertise and our expertise and protected retirement solutions, it makes for a natural partnership.

At the same time, we’ve also seen the number of people with pension plans — defined benefit plans — decrease significantly. There’s also uncertainty about Social Security and having that as an income stream in retirement. So being able to partner to provide some sort of guaranteed income stream in retirement for plan participants is so critical for the industry going forward. And we feel there’s a lot of opportunity, both in plan and out of plan for different rollover solutions too.

Feldman: Jackson has made a big pivot into registered index-linked annuities, which is another hot area. Could you tell me about where you hope to take that product line?

Reed: Jackson launched its first RILA product in 2021. Since then, we’ve had two successful product launches in RILA and now are offering Market Link Pro II, which is our product in the industry.

As of third quarter of 2024, we were a top 5 player in the industry, and RILA is approaching about a third of our product portfolio. So, it’s been very successful, and I attribute that to a few things. One, the uniqueness of our product offering. We have several unique features when compared to other products in the industry, including a unique crediting methodology. We also provide choice for the consumer in offering three different terms, five different index options and different crediting methods as well.

We’ve also come to market with an award-winning digital marketing tool that allows advisors to easily illustrate some of the outcomes with our RILA

product solution. When you combine that with our large distribution force and relationships in the industry, the combination of all of that has resulted in a lot of great success for Jackson and the RILA product. In addition, we launched a living benefit guarantee on our RILA product in the fall of 2024. This is an optional benefit. It can be elected after issue, which is unique to the industry. We also were able to expand our RILA offering in the state of New York. New York had some regulations that prevented many carriers from entering that state. We were able to expand, and we have seen a lot of success with our product offering in the state of New York.

Feldman: Customization and offering all these options and riders are very important now for consumers. Why are these gaining such importance?

Reed: At Jackson, we fully believe in freedom of choice. And the product solutions are not one size fits all. We offer choice — whether it’s in living benefit features, index options, fund options on our VA — and then offer that at a corresponding charge. So the consumer is getting exactly what they need at that right level of cost.

Feldman: Let’s talk about annuities and their importance in the current landscape. We have about 10,000 Americans hitting age 65 every day. People are living longer and worried about having their assets last. Add to that fluctuating interest rates and the inflation threat. Where do you see the annuity market going, and how is Jackson adapting?

Reed: The trend in the industry has been growth. It has been record growth. That’s being driven by spread product offerings with fixed indexed annuity and fixed annuity as well as RILA growth. But we also saw trends last year with monthover-month growth in traditional variable annuities as well, which I think is a positive sign given the market environment. At Jackson, we feel fortunate and excited to be a player in this growing industry environment with a lot of new and innovative solutions coming out across the marketplace. It’s really diversity and choice for the advisor and the consumer. We offer traditional variable annuities. We’ve been a

large player in that space. Our flagship product is called Perspective II. That product offers a very robust investment platform that isn’t restricted when a consumer elects a living benefit guarantee.

We feel that it’s very important to allow that growth. And to the point that consumers are feeling they’ve undersaved and are worried about retirement, we feel this variable annuity that offers access to investments that participate in the market and allows for growth is so important for that type of investor because it allows for step-ups and growth and guaranteed retirement income.

Within that product, too, we were the first to offer a living benefit guarantee, called FLEX DB, which offers both a guaranteed income solution as well as legacy protection. That’s been one of Jackson’s most popular living benefit guarantees. We believe that’s important for consumers who desire both income and legacy protection. And we also offer a unique flex net benefit that offers enhanced income and periods of market growth.

The product that we offer is an investment-only variable annuity called Elite Access. This product offers an even more robust investment platform of traditional and nontraditional investments, some of which are exclusive to Jackson. We have expanded this product into some protection options as well with an optional return of premium death benefit.

In the fall, we added a guaranteed minimum accumulation benefit, or a GMAB, called Principal Guard. That guarantees full principal protection over specified terms. With assets and volatility in the market, we believe this is a great solution for those consumers as well.

And then, of course, our RILA product too. It’s a great product for some upside potential but also offers partial downside protection through buffers and floors. It allows the consumer to participate in market upsides but also have some downside protection. And we believe it’s another good solution for advisors to discuss with their clients, based on their needs.

Feldman: I know that Jackson won some awards for its digital ecosystem. Could you talk about how important that type of functionality is and how important it is to your growth?

Reed: Providing an end-to-end advisor and consumer experience has been an important strategic initiative for Jackson. We’ve invested a lot into that advisor experience and in adding digital tools for the advisors to access. It’s been important for our existing advisors, but it’s also been an important solution for attracting new advisors to Jackson.

The tools enable them to show some quick outcomes and they can quickly follow through with an introduction to a wholesaler, et cetera. So the full complete digital ecosystem has been such an important aspect of Jackson’s strategic growth, and it will continue to be an important focus for Jackson going forward.

Feldman: Is that your major focus for increasing distribution? What are the other areas for a distribution growth?

Reed: Certainly the digital ecosystem is a focus. I would also say our initiatives to diversify into new products and new channels are also areas of focus. We believe the advisory and the RIA channel are an opportunity for growth at Jackson. At Jackson, we offer advisory versions of our variable annuity product, our investment-only product, our RILA product and our FIA product.

We also offer a specific advisory solution for the RIA channel. So that is a big area of focus of growth, as we have seen more advisors transitioning from the traditional broker-dealer channel into the dually registered and then into the RIA channel. Supporting that advisor through that transition and journey through different product options is important for Jackson.

We also want to support advisors through better integration of annuity products into wealth management platforms. Part of the digital transformation strategic initiative for Jackson has been to enable us to better integrate annuity solutions into wealth management platforms — not only the product solutions, but also how we better integrate annuities as an option into financial planning and wealth planning tools so that an advisor can illustrate to consumers easily that a portfolio with an annuity can have a better end outcome than a portfolio without an annuity. So Jackson has taken a big leadership role in working with

different fintech companies on helping to achieve those goals.

Feldman: Let’s talk about what you’re doing with mentoring women in the company. There aren’t a whole lot of women in this industry. It sounds like Jackson’s really focused on this.

Reed: Jackson offers a lot of different career opportunities based on your career paths and objectives. For me personally, my journey has been more home office focused, as it allows me to stay closer to home, have a family and have a good work-life balance.

We have many female external wholesalers who have had very successful careers within Jackson, and we try to mentor newer female associates in the organization on different career path opportunities that they may want to explore based on their goals and objectives.

I am the executive sponsor of the Empower Network, which is what we call a BRAG, which is a Business Resource Associate Group within Jackson. We have many of these based on different desires of our associates. But it’s probably one of the largest organizations at Jackson that really focuses on women and bringing women together to talk about career opportunities.

We just wrapped up our national sales meeting for all the distribution companies. We had some breakout sessions for wholesaling in terms of how certain women have made wholesaling work for their long-term career and balance that work-life family aspect as well.

Feldman: We see so much of the wealth in the country falling to women as they outlive their husbands. How are you trying to make an impact with that demographic?

Reed: We do have some female-focused marketing campaigns that we leverage with certain advisor groups that want to expand their practice into focusing more on that female consumer given some of the dynamics that you mentioned. And that’s another reason why we feel some of the products that we offer — such as the variable annuity with lifetime income guarantees and the variable annuity with lifetime income plus legacy protection

— are such important products. Women are outliving their husbands, and we are providing that comfort that they will have income for life and also some legacy protection that they can then pass it on to their beneficiaries.

Feldman: Jackson has award-winning illustration software. Illustrations have been a problem for a lot of carriers and regulators. How does the industry do a better job of illustrations?

Reed: There are two aspects to this. We’ve seen a lot of success and continuing relationships into existing advisors as well as expanding into new advisors. They can see some outcomes and what the product can do. And Jackson’s working on expanding that, not only with RILAs, but also with our whole product portfolio.

An existing advisor or a new advisor can come in and answer some questions and then determine what product path they may want to explore based on certain needs of their consumers. In terms of actual product illustrations, which Jackson offers behind our login screen, those are much more in depth and take into account much more complex scenarios, where you can illustrate withdrawals, growth, different portfolios, hypotheticals, and it’s much more robust than some of these digital tools that we’ve introduced. Because of some of the challenges we’ve seen in the industry, we’ve taken a very conservative approach to the build-out of our illustration software.

We work closely with the regulators, specifically FINRA, in obtaining approvals for all our registered and nonregistered illustrations to make sure that we’re taking a balanced approach and illustrating these products to the consumer. They are complex, and we believe the consumer must understand the different and various outcomes that could play into those illustrations.

Jackson has taken a leadership role in working with industry groups to determine how we can improve the overall illustration experience for the end consumer, because there’s a point where it gets to be too much information for that consumer to digest. And we want to make sure that we’re providing that balanced

view, but also not overstating or making things too complex so that it’s too much for them. That’s why I think digital tools that are more high level in nature have been such a success story for Jackson.

Feldman: What can we do as an industry to better educate on the importance of annuities — such as what portfolio outcomes are with annuities versus without annuities? There are some advisors who don’t necessarily believe in annuities. How can the industry address that?

Reed: I completely agree that education will be the key. I think annuities have had a stigma in the past that they’re too expensive, with high commissions, that they tend to lock up your money.

And I think the industry has changed significantly for the better in terms of flexibility of the products, lower costs of the products, providing unique features to that end consumer that traditional investments, mutual funds, exchange-traded funds, et cetera cannot provide. Yet some advisors still do have some issues with the products. I think it’s up to Jackson and the industry to help better educate through our distribution partnerships but also through our asset management partners.

Because of Jackson’s large variable annuity block of business, we have lots of very strong relationships with top asset managers in the industry, whether it’s BlackRock or T. Rowe Price or American Funds. They, along with many other asset managers, have been very supportive in helping us to try to get that message out to advisors.

More of those asset managers are releasing their own independent studies on this aspect. And I think the more information about annuities that can come from others in the industry — not just annuity companies — the more open advisors who have not offered annuities in the past will be to seeing these products as solutions.

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Building Trust in Uncertain Times: Strong Partners Key for Independent Agents

by John Bultema, President & CEO, Columbus Life and Lafayette Life Insurance Companies

Are you up for a challenge in 2025? And as important, do you have a choice?

Independent insurance agents face a formidable task in guiding clients to trusted carriers, ones which can be counted upon to help safeguard hard-earned legacies.

Financial strategy has grown increasingly complex amid fluctuating financial markets and erratic economic conditions. For nearly the last decade, financial markets and the global economy have marked both unprecedented highs and catastrophic lows. And in the process, economists have found their expectations repeatedly upended in either direction. The sole point where experts seem to regularly converge is that what’s coming next in terms of the economy at large is unknowable.

Our Business Doesn’t Exist in a Bubble

The insurance industry is no exception. The past decade has brought surges of new business to our industry as well as unfortunate casualties in carriers experiencing weakening levels of capital, a few even so far as to requiring rehabilitation by their departments of insurance. Newcomers to our business — those perhaps more focused on shortterm investor profits than long-term policyholder benefits — meanwhile have emerged to begin acquiring a number of carriers.

Against this backdrop, it’s more important than ever for agents to consider the financial strength and performance record of their insurance partner in order to provide clients with a greater sense of security.

Building on Bedrock Since 1888

Western & Southern Financial Group offers independent agents a family of companies carrying some of the industry’s strongest ratings. Together they provide a comprehensive portfolio of key life insurance products for independent agents.

Independent agents benefit from three critical life insurance product lines provided by Columbus Life, Lafayette Life, and Gerber Life, all strengthened and secured by their common heritage with Western & Southern. Drawing on a legacy dating to 1888, Western & Southern today stands as one of the strongest mutually held insurance groups in the world. Our individual brands help provide assurance bolstered by our parent organization’s phenomenal capital-to-asset ratio of 14.9%2, one that far surpasses the aver-

age of the 15 largest publicly traded life insurers doing business in the U.S. Our enterprise now serves some 6.4 million clients, policyholders and account owners and in 2023 (as 2024 numbers are still being finalized) we paid $7.4 billion in total claims, benefits and dividends.

Yet each brand stands uniquely positioned to bring independent agents advantages for their own businesses.

Complementary Suites of Solutions from Superior Issuers

Columbus Life, founded in 1906, specializes in indexed universal life insurance as well as offering term life and fixed indexed annuities. We offer a portfolio of products ranging from IULs for individuals and survivorships, traditional or rapid-issue underwriting. While many carriers focus on overly optimistic projections, “Real Life” is the rule here. Columbus Life prioritizes transparency and realistic outcomes, ensuring agents don’t need to revisit policies burdened by unmet expectations.

Timeless values guide modern design at Lafayette Life. Here whole life insurance stands foremost. We offer some eight individual whole life policies and we prize an unbroken histo-

Bultema

ry of paying dividends since the company’s 1905 inception.3 Lafayette Life’s portfolio also includes term life and fixed indexed annuities. Our variety of base policies and riders equip agents with a versatile toolbox for modern life, one ready to be tailored to individual needs and as necessary adapted to changing requirements. When life calls for new plans, our policies offer non-direct recognition loans for access to cash value. All life insurance products at Lafayette Life (as well as Columbus Life) automatically include our accelerated death benefit rider for eligible clients, providing competitive benefits to be used for any reason in the event of a claim. We are also home to Lafayette Life Retirement Services. It offers an experienced, responsive single shop for qualified retirement plan sales and administration, helping agents grow their business by serving other small business owners.

Finally, consider Gerber Life. Famously known for providing juvenile coverage direct to the consumer, it also offers independent agents guaranteed issue life coverage for older individuals. For more than half a century, Gerber Life has been dedicated to providing everyday families with access to life insurance coverage under one of America’s most recognizable brands. Clients and agents alike appreciate a quick, simple application with no exams or complex questions. Guaranteeing coverage for individuals aged 50 and older, it helps provide financial relief for final expenses, medical bills and outstanding debts. The confidence inspired by Gerber Life’s widely recognized identity is further enhanced by the strength of our parent enterprise, conservatively managed to better assure delivery of its more than $65 billion of life insurance in force.4

Better Position Your Business for Continued Success

Life insurance is complicated. The products and concepts are unfamiliar to most consumers. Agents meanwhile are under enormous pressure to stay current as expert resources while managing their business as well.

Success-minded agents can streamline their business model by partnering with a carrier equipped to provide as much as possible under one roof. Recognized and respected issuers — Columbus Life, Lafayette Life and Gerber Life — each possess unique product portfolio strengths. Yet all are unified under the shared financial wherewithal and operational proficiency of Western & Southern. Moreover, other units specializing in investments, real estate and institutional markets provide enhanced diversification that in turn helps Western & Southern better weather economic downturns and ultimately serves as added ballast for its life insurance obligations. This time-proven business pro-

file should give agents confidence that they’ll never need to apologize for representing our products and their issuers.

As President and CEO of Columbus Life and Lafayette Life, I’m proud we encourage direct access for independent agents to our Home Office teams, including Underwriting, New Business and executive leadership. Together our operations function as a cohesive team with the common goal of an exceptional customer experience. Moreover, we offer shared services such as our Advanced Markets professionals to support complex planning and sales — providing complimentary resources from industry specialists for an agent’s own practice. And because each agent’s business is unique and valuable, our sales teams deliver world-class service in helping agents excel.

If you’re an independent agent yet to work with any of our solutions, then I encourage you to learn more about how we can better support your business. We understand the challenges confronting independent agents. Come work with a company with which you can build a long-term relationship, a company that provides solutions where you won’t have to explain unmet or unexpected outcomes. As time marches forward in this unknowable world, we want to provide you and your clients with as much stability as we can. Doing so helps make you more productive and better able to serve more clients. Allow us to help you soon.

Visit www.WesternSouthernBrands.com to contact Columbus Life, Gerber Life, or Lafayette Life and learn more.

1 LIMRA, U.S. Retail Individual Life Insurance Sales Reports (Annualized Premium) as of 12/31/23.

2 As of 12/31/24.

3 Dividends are not guaranteed and may be changed by the company at any time.

4 As of 12/31/23.

Life insurance products are not bank products, are not a deposit, are not insured by the FDIC, nor any other federal entity, have no bank guarantee, and may lose value.

Payment of the benefits under the contract is the obligation of, and is backed by, the product issuer. Columbus Life Insurance Company and The Lafayette Life Insurance Company are domiciled in Cincinnati, OH and operate in DC and all states except NY. Gerber Life Insurance Company is domiciled in White Plains, NY and operates in DC and all states. Gerber Life Insurance is a trademark used under license from Société des Produits Nestlé S.A. and Gerber Products Company.

TAKE CENTER STAGE UNDER

NOW THAT PRESIDENT DONALD TRUMP AND FELLOW REPUBLICANS CONTROL ALL LEVERS OF GOVERNMENT, THE FOCUS IS ON HIGH NET WORTH CLIENTS

BY JOHN HILTON

Advisors in the high net worth space are doing much more than maintenance with clients in 2025. Or at least they should be.

With President Donald Trump back in power, literally everything is on the table when it comes to tax cuts, new laws, repealing laws and or favorable regulation. The Trump administration efficiency assessment of the federal government was well underway as this issue went to press.

The new administration delivered bombshell results on a near-daily basis and high net worth clients are the clear winners of the overall strategy.

With department heads and key lieutenants still being confirmed into March, much of the Trump administration

provisions temporary to limit the 10-year revenue cost of the TCJA to the amount authorized in the Congressional Budget Resolution ($1.5 trillion).

Also, lawmakers had to comply with Senate budget rules under the process used to pass the tax act and bypass the Senate filibuster, which required no increase in the federal budget deficit after the 10th year.

In short, Congress needs to act to extend the TCJA, and that creates an opening to cut taxes further.

“We must make permanent the 2017 Tax Cuts and Jobs Act and implement new pro-growth policies to reduce the tax burden on American manufacturers, service workers and seniors,” Treasury Secretary Scott Bessent told lawmakers during his confirmation hearing.

blueprint remains under wraps. The first major showdown over the federal budget came with a mid-March deadline and will impact everything to come.

What is known is that Trump and Republicans who control the House of Representatives and the Senate are all in agreement on another round of tax cuts with a likely price tag in the trillions. Trump is eager to extend and build on his signature accomplishment: The Tax Cuts and Jobs Act of 2017.

The TCJA was the most significant tax reform since the Tax Reform Act of 1986, which lowered the top tax rate for ordinary income from 50% to 28% and raised the bottom tax rate from 11% to 15%.

But unlike the 1986 tax bill, the TCJA changes were limited to a decade. Congress chose to make the individual

Extending the 2017 tax law “is the single most important issue of the day,” he added. Letting the law expire would unleash a $4 trillion tax hike that could crush the U.S. economy, Bessent maintained.

The GOP blueprint

At press time, Republicans were working to advance a budget blueprint reflecting Trump’s desire to slash taxes and spending in tandem.

The plan provides for up to $4.5 trillion in tax cuts and a $4 trillion increase in the debt limit so the U.S. can continue financing its bills. The budget plan also directs a variety of House committees to cut spending by at least $1.5 trillion while stating that the goal is to reduce spending by $2 trillion over 10 years, the Associated Press reported.

We must make permanent the 2017 Tax Cuts and Jobs Act and implement new pro-growth policies to reduce the tax burden on American manufacturers, service workers and seniors.

– Treasury Secretary Scott Bessent

Treasury Secretary nominee Scott Bessent testifies before the Senate Committee on Finance on Jan. 16, 2025, on Capitol Hill in Washington, D.C.

The tax cuts are being offset by massive potential cuts to social services, particularly Medicaid. Democrats naturally oppose tax cuts as handouts to “billionaire donors and wealthy corporations,” as House Speaker Hakeem Jeffries put it, but have few options to oppose the plan.

One important thing to watch for in the final package is whether the new round of tax cuts will be temporary or permanent.

Part and parcel with general tax cuts is the fate of the estate tax. The estate tax has long been a target of conservative lawmakers, who call it the “death tax.”

The TCJA more than doubled the maximum that families can give their beneficiaries without incurring federal gift or estate taxes. This applies to gifts made either while alive or as part of an estate.

The gift and estate tax exemption is adjusted annually for inflation and was $13.61 million for a single person in 2024. Unless Congress acts to extend the current language, the estate tax will revert to 2017 levels, or about $7 million.

As partner of Socium Advisors, Michelle Magner handles tax issues and many other financial concerns for high net worth clients. Socium is a national firm with plenty of resources, including a dedicated estate planning lawyer, to aid in financial planning.

“The tax management piece really impacts our clients in several different ways,” Magner said. “How we manage assets, how we’re planning for liquidation events, what types of strategies we can implement throughout a particular tax

year to help or alleviate the burden. But then there’s also the longer-term piece of the estate tax and the types of insurance products that can really help to minimize or mitigate that tax liability in the end.”

Interest rates a big key

The insurance industry was among the biggest beneficiaries of the TCJA. The corporate tax rate reduction from 35% to 21%, a part of the act that was already made permanent, was a major benefit for insurers, as it directly boosted their aftertax profits.

Companies like Allstate, Chubb and UnitedHealth experienced higher profitability since they retain much of their earnings in taxable investments. Higher

earnings allow those insurers to return more to shareholders, but also invest in much-needed technology like artificial intelligence tools.

But interest rates are a second key part of that profitability equation. Insurers, and high net worth investors, make money when interest rates are higher.

On that issue, Trump has been stymied by Federal Reserve Chair Jerome Powell. The central bank doesn’t “need to be in a hurry” to resume its interest rate cutting campaign, Powell has said, noting officials reduced the rate significantly last year and the economy remains sturdy.

After hiking its key interest rate to a 23-year high of 5.25% to 5.5% in 2022 and 2023 to tame a pandemic-induced inflation surge, the Fed cut the rate by a full percentage point by late in 2024, citing slowing consumer price increases.

The inflation rate edged up early in 2025, which makes the interest rate hikes Trump and wealthy investors want more unlikely in the short term.

Go private

Private placement life insurance is an option that can make sense for high net worth clients in a scenario of swirling uncertainty, said Michael Ashley Schulman, partner at and chief investment officer for Running Point Capital Advisors, a multifamily office.

A PPLI policy is structured as a private contract between the insurer and the

Hakeem Jeffries hands the speaker’s gavel to Speaker of the US House of Representatives Mike Johnson during the opening of the 119th Congress.

United States President Donald Trump speaks during a cabinet meeting at the White House in Washington, D.C., on Wednesday, Feb. 26, 2025.

investor. This arrangement allows the investor to “wrap” a new bespoke investment portfolio within the life insurance policy, thereby delaying taxes on income and capital gain accumulation while potentially minimizing estate tax liability at the end, Schulman explained.

PPLI investments can include opportunities not available in traditional life insurance policies, such as private credit, real estate debt, hedge funds, private equity, insurance-directed funds and publicly traded securities.

PPLI is a strong tool for advisors in estate planning for wealthy clients, more so if stepped-up basis is eliminated at the federal level, Schulman said. It offers high net worth individuals “an efficient mechanism for wealth transfer in an evolving tax environment,” he said.

Stepped-up basis is a tax rule that adjusts the value of an inherited asset to its fair market value at the time of the original owner’s death.

“By combining the tax advantages of life insurance with customized investment flexibility, PPLI provides sophisticated investors a powerful tool for long-term tax optimization while maintaining access to investment growth through policy loans, removal of basis, and other permitted features,” Schulman said.

Sen. Ron Wyden, D-Ore., is a relentless critic of PPLI. He introduced a bill in December to reclassify and tax the strategy.

A year ago, Wyden released a report calling PPLI a tax shelter for the ultra-wealthy. The report, which characterizes PPLI as a “buy, borrow, die” tax shelter, is highly critical of the uses and tax advantages afforded to the purchasers of such products that are not available to the less affluent.

With Republicans in full control of the federal government, PPLI appears safe from further regulation for the time being.

Micro-captive plans

Van Carlson is the founder and chief executive officer of SRA 831(b) Admin, an Eagle, Idaho-based firm that helps high net worth clients set up micro-captive insurance arrangements.

The micro-captive concept was introduced in 1986 under Section 831(b) of the Internal Revenue Code. Similar to how the 401(k) tax code allows an employer to set aside tax-deferred dollars for

retirement, the 831(b) tax code allows a business to set aside tax-deferred dollars to cover under- or uninsured risks.

It can help a high net worth business owner eliminate a lot of risk and stress from their business, Carlson said. SRA is the largest manager of 831(b) plans in the country and began in 2008.

With the COVID-19 outbreak not long in the rearview mirror, many wealthy business owners know how quickly unexpected disruptions can arise, Carlson noted. The forced 2020 shutdown left many business owners fruitlessly appealing to their insurers for business interruption coverage.

“If you relied on PPP or ERC, or any government programs to keep your business afloat during those times, what are you doing differently about it today?” he said. “Because I don’t know if we can rely on the government next time, nor should we rely on the government next time.”

The IRS views micro-captive insurance arrangements with significant scrutiny, as some have been used for abusive tax avoidance schemes rather than legitimate risk management. That is just a reason for lawmakers to “clean it up” and make it a stronger and normal business practice, Carlson said.

The micro-captive concept is pretty simple. A business owner establishes a captive insurance company owned by the business or its affiliates. The captive provides insurance coverage for risks that may not be adequately covered by traditional insurance policies.

The operating business pays premiums to the captive, and captive insurers that collect $2.9 million or less in annual premiums (as of 2023) do not pay federal income taxes on premium income—only on investment income.

“You are retaining risk on your books, and you just don’t know it until something happens,” Carlson said. “And I think COVID-19 is a good example of that.”

InsuranceNewsNet

Senior Editor John

Hilton covered business and other beats in more than 20 years of daily journalism. John can be reached at john.hilton@innfeedback.com. Follow him on X @INNJohnH.

If you relied on PPP or ERC, or any government programs to keep your business afloat during those times, what are you doing different about it today? Because I don’t know if we can rely on the government next time, nor should we rely on the government next time.

– Van Carlson, founder and CEO of SRA 831(b) Admin

2 25 PREMIUM FINANCING & HIGH NET WORTH SOLUTIONS

SPECIAL SPONSORED SECTION

Premium finance solutions and wealth management are top of mind for affluent clients and the businesses that serve them. Read up on the latest from trusted partners and finacial leaders in our special sponsored section.

INSIDE

The key to retirements success — solving for the right needs by EquiTrust Life Insurance Company

PAGE 17

The most important word in annuities is TRUST by American Equity Investment Life Insurance Company

PAGE 18

The Advanced Markets Playbook: Strategies to boost your practice and drive results with Andrew Rinn of Sammons Financial Group

PAGE 20

Bridging the gap: Expanding the high net worth market by Kimberly Duke of LIDP

PAGE 22

Differentiating your high net worth service model in a democratized wealth management landscape by Jeff Wick of Cambridge Investment Research Inc.

PAGE 23

The key to retirement success –solving for the right needs

Clients in the accumulation or income phase of retirement? It matters when you’re building a smart strategy for the future.

Picture your clients — the people, not just the names. The goals and aspirations. If you were to ask 10 people what retirement means to them and if they’re ready, you’d get 10 different answers.

The truth is retirement isn’t one-size-fits-all. One client may have decades to prep and plan, while another may be just a few years away, or even on the cusp of retirement. Their goals and time horizons are poles apart, but a wellcrafted strategy is essential to helping them turn their retirement dreams into reality.

Accumulation vs. income phases

As you approach each client, are you considering where they are in their retirement journey? If you’re not identifying them by their accumulation vs. income needs, you may be missing the mark.

How do the phases line up?

Accumulation

During the accumulation phase, individuals focus on saving money for retirement while employed, allowing their funds to grow over time through contributions and market gains.

Income

In the income phase of retirement, individuals focus on managing various income sources to maintain financial stability and pursue their goals after leaving the workforce.

Product suites for retirement phases

Meeting your clients’ unique needs starts with recognizing their stage in the funnel. Fixed index annuities (FIAs) come in all shapes and sizes, providing solutions for any stage of retirement. The key is to work with carriers who offer FIAs specifically designed for particular retirement phases, such as accumulation-focused FIAs and incomefocused FIAs.

Accumulation-focused FIAs help clients build savings now, while they’re in the workforce and envisioning

the future. These products offer ways to accelerate earnings, like premium bonuses and/or accumulation value bonuses, higher credited rates and guaranteed accumulation value benefits.

On the other hand, income-focused FIAs offer features that prepare the client for income distributions, such as income benefit riders (IBRs). IBRs help them secure guaranteed lifetime income, and may offer other advantages such as spousal continuation and the ability to boost income withdrawals in the event of a chronic illness.

Learn more about solving for your clients’ needs based on their retirement phase with a focused product suite. Call us at 866-598-3694 or email Sales.Support@EquiTrust.com today!

The Most Important Word in Annuities is TRUST

Trust is the foundation of any successful relationship. Those in the financial services industry know that when individuals place their financial security in the hands of an insurance company, they seek the assurance that promises will be kept. But trust isn’t built overnight, it’s earned through consistent actions that reinforce reliability. Strengthening trust goes beyond client relationships — it includes partnering with trusted carriers that accelerate your business.

Building Trust in Annuities

Annuities are valuable financial tools that offer opportunities for growth, protection against market risk, and dependable sources of retirement income. With a wide range of annuity options designed for different goals, they often come with various features and riders to navigate. Regardless of the specific product, clients entrust their savings into these solutions, making trust in their provider essential. Several key factors contribute to building and maintaining that trust:

• Financial Stability – Consumers need assurance that the carrier will fulfill obligations, even decades later.

• Transparency – Annuity products can appear complex, making clear and honest communication crucial in fostering confidence.

• Service & Support – The way a company interacts with policyholders can reinforce — or erode — trust over time.

• Regulatory Compliance & Ethics – A strong ethical foundation reassures policyholders that their interests come first.

Benefits of Working with a Trusted Annuity Carrier

Selecting the right annuity provider is about much more than product features — it’s about safeguarding your reputation for long-term success. While financial professionals recognize the importance of credibility, it’s also important to realize how much a provider’s reputation can influence various aspects of their practice. A trusted insurance carrier may offer far-reaching benefits, including:

• Increased Sales Confidence – Financial professionals may feel more confident in their recommendations when they trust the carrier’s reliability.

• Faster Sales Cycle – A strong reputation may ease objections to help shorten the sales cycle, while responsive support can contribute to faster, more confident decisions.

• Higher Client Retention – When clients trust their provider, they may be less likely to surrender policies, which can lead to more stable commissions and stronger relationships.

• Lower Compliance Risk – A reputable carrier tends to prioritize ethical practices and transparency, which can help reduce compliance challenges.

• L ong-Term Growth – Partnering with a trusted brand can enhance your credibility, helping to generate more referrals, repeat business, and sales growth.

American Equity Tops Newsweek’s Most Trustworthy Companies List

Establishing trust in annuities requires more than just promises; it demands ethical practices, financial strength, and customer satisfaction. Recently, Newsweek recognized American Equity Investment Life Insurance Company as the #1 Most Trustworthy Company in Insurance.1

This ranking was based on an independent survey of over 70,000 participants evaluating companies across 23 industries on trust in advertising, fairness to employees, and overall reliability. Industry recognition like this underscores the importance of upholding high standards across the board.

Customer Service — A Key Driver of Trust

Exceptional customer support is vital to building trust. When David Noble founded American Equity in 1995, he felt that many companies had drifted from the core principals of service and relationships. So, he built American Equity on a commitment to service and strong partnerships.

Since then, American Equity has invested heavily in its customer support infrastructure to ensure that financial professionals and contract owners receive timely, knowledgeable assistance.

To strengthen relationships, regional teams of internal and external wholesalers work closely with financial professionals to provide local support. For those requiring a higher level of assistance, a dedicated Concierge Service team delivers specialized business support, ensuring that their financial professional partners have the tailored solutions they need to succeed.

Operational efficiency is just as critical. Processing service requests quickly and issuing contracts within 24-48 hours, when in good order, are top priorities. American Equity’s streamlined processing is reflected in MyApp™, an advanced eApp system designed to eliminate errors and accelerate contract issuance. The system features a built-in pre-suitability tool called EZ Suit™.

Together, these innovations have resulted in a less than 1% NIGO rate, less than 8% suitability review rate, and a 42% faster completion time than paper applications.

Further technology investments provide 24/7 access to product information, policy details and self-service capabilities through secure customer portals. Customer feedback is continuously gathered to refine products and services — ensuring that evolving needs are met.

A Commitment to Integrity & Financial Strength

From its earliest days, American Equity has championed integrity as a fundamental value. Mr. Noble instilled what he called the ‘mother-in-law principle’—meaning if he couldn’t explain a product clearly enough for his mother-in-law to understand, then it wasn’t something he would sell to anyone. This core value remains in place today under the leadership of American Equity’s current CEO, Jeff Lorenzen, who worked closely with the founder and has carried forward the same commitment to transparency.

Over the past three decades, American Equity has built a reputation as a carrier that puts people first and has grown to become a leading provider of fixed index annuities. This reputation is underscored by

American Equity’s ‘A’ (Excellent) Rating from AM Best, reflecting its strong financial position and ongoing commitment to stability.2

“At American Equity, trust isn’t just a goal, it’s a foundational commitment to our partners, our customers and our employees. It’s always been the philosophy at American Equity, that people are our greatest asset, and when we value our team members that translates into strong relationships with our financial partners and a willingness to go above and beyond for our customers.”

— Jeff Lorenzen, CEO

Building a Future of Trust

In an industry where trust is paramount, providers with strong financial practices and high customer service standards stand out. American Equity, with its decades-long reputation and industry recognition, serves as an example of what it means to be a trusted carrier. As the industry evolves, transparency, reliability, and ethical business practices will remain the benchmarks of success

Start building a future of trust with American Equity today by visiting american-equity.com/agent-resources to learn more.

1 Source: newsweek.com/rankings/worlds-most-trustworthy-companies-2024

2 A.M. Best has assigned American Equity an “A” (Excellent) rating, reflecting their current opinion of American Equity’s financial strength and its ability to meet its ongoing contractual obligations relative to the norms of the life/health insurance industry. A.M. Best utilizes 15 rating categories ranging from A++ to F. An “A” rating from A.M. Best is its third highest rating. For the latest rating, access www.ambest.com. Rating effective 11/27/2024.

The Advanced Markets Playbook: Strategies to Boost Your Practice and Drive Results

The life division at Sammons®  Financial Group, comprised of Midland National and North American, has always supported policies in the advanced sales space. In 2022, after a year of record sales, a desire to offer even more to agents and their high-net-worth or business clientele led to the strategic build out of a full Advanced Markets department. When the time came to hire its leader, one name rose to the top.

For more than two decades, Andrew Rinn has been at the forefront of Advanced Markets, shaping strategies that empower financial professionals and drive industry growth. In just a few years, Andrew has built a premier team, drawing from his extensive experience to innovate and elevate how Advanced Market teams operate.

But his journey into the financial services industry was anything but conventional.

Growing up in a large family of 11 children, many of whom pursued careers in financial services, Rinn initially resisted following the same path. However, a nudge from a sibling in Human Resources led him to an Advanced Markets position that would ignite his passion for the industry. Though he didn’t secure the role immediately, his determination led him to earn multiple designations, including CLU, ChFC, and CFP, eventually landing the job. “Persistence and continuous learning have been the hallmarks of my career,” he said.

Rinn’s leadership philosophy is deeply influenced by his diverse experiences. As an athlete, he developed a competitive, achiever mindset that has carried over into his professional life. His early missteps, such as producing overly complex reports, taught him the value of simplicity. He recalls an incident where a 23-page report on Charitable Remainder Trusts was condensed into a one-pager that ultimately closed a major deal. “Simplicity is the ultimate sophistication,” Leonardo da Vinci once said, and Rinn reflects on how this lesson became a cornerstone of his approach.

In his current role, Rinn has been instrumental in transforming the Advanced Markets team into a proactive, industry-leading unit to serve financial professionals at both Midland National® Life Insurance Company and North American Company for Life and Health Insurance ®. His vision extends beyond traditional roles, emphasizing collaboration with internal and external partners. The team’s tagline, “Individual and Business Solutions Made Simple,” reflects this ethos, distilling complex strategies into five core questions that agents can easily engage with.

One of Rinn’s most significant innovations is the shift from reactive technical support to proactive partnerships. “We don’t wait for the phone to ring anymore; we’re actively partnering with financial professionals to help them grow their businesses,” he said. Initiatives like their targeted coaching programs for their internal and external sale teams equips and empowers them to provide more valuable

Andrew Rinn

guidance and resources to actively support financial professionals in growing their practices. Continuous learning is a priority, with an emphasis on professional designations, industry memberships, and thought leadership activities that keep the team at the forefront of industry trends.

What truly sets Midland National and North American apart is their culture of collaboration and a “Yes, we can” mindset. As part of an employee-owner culture, everyone is invested in each company’s success, fostering a shared commitment to excellence. This culture extends to strategic partnerships that help enhance the value proposition for clients.

Clients

don’t

want

to be lec-

tured to; they want to engage in a conversation where they are equal partners. If you can simplify the complex, they’ll be a better advocate for their own financial plan, and for you as a trusted partner.

A prime example is the collaboration with Marshall & Stevens, a leading provider of business valuation services. Recognizing the limitations of a do-it-yourself approach, Rinn championed an external partnership model that adds credibility and efficiency to business transition planning. “We decided to turn that apple cart upside down by creating an external partnership approach rather than having Advanced Markets masquerade as valuation experts,” he said.

Marshall & Stevens offers independent Calculations of Value based on the IRS Fair Market Value standard, streamlining the planning and underwriting process. This partnership not only enhances the agent’s role as a trusted resource but also helps ensure clients receive high-quality, objective valuations.

Looking ahead, Rinn is focused on expanding the Midland National and North American footprint in the high-net-worth and business owner markets. Premium finance and executive benefit planning are key growth areas, supported by advanced metrics that shift from reactive to predictive marketing. By identifying trends and creating targeted strategies, the Advanced Markets team is poised to meet the evolving needs of modern clients.

Rinn’s advice for those looking to build or improve an Advanced Markets practice is straightforward: “Focus on simplicity, execution, and genuine partnerships. Metrics matter, but it’s the relationships that drive success.”

He emphasized that it’s not just about the information you deliver. It’s how you engage your clients and make them feel understood that will empower them to explore advanced strategies. “Clients don’t want to be lectured to; they want to engage in a conversation where they are equal partners. If you can simplify the complex, they’ll be a better advocate for their own financial plan, and for you as a trusted partner.”

This philosophy underscores the importance of a unified approach when working with Advanced Markets. “You’re not just working with Advanced Markets; you’re working with product, underwriting, legal—the point is, we coordinate our efforts to give a first-class experience for our financial professionals,” Rinn said. In today’s landscape, clients have more, not less, need to solve their estate, business, and executive benefit challenges. Often, these needs can only be addressed through advanced planning with life insurance, making the collaboration across teams even more critical.

At its core, Rinn’s approach reflects a belief that Advanced Markets is an indispensable partner for financial professionals seeking to elevate their practices. “Leverage the expertise and resources available through Midland National and North American. You might be pleasantly surprised at how transformative it can be,” he said.

The views and opinions expressed are Andrew Rinn’s views and opinions as an individual and do not reflect the views and opinions of

Bridging the Gap: Expanding the High Net Worth Market

Improve your client’s financial outcomes and strengthen your competitve market position

By Kimberly Duke, CMO and SVP of Growth at LIDP

In the current financial landscape, the desire to build wealth and secure a prosperous future is a universal aspiration, especially among average wage earners who fund their financial futures with fewer resources. While high-net-worth individuals (HNWIs) enjoy the benefits of extensive investments, the working-class demographic is increasingly searching for effective pathways to enhance their financial situations and prepare for a stable retirement. One of the most promising strategies for achieving these goals is through annuities, which can be a pivotal tool in wealth accumulation and financial security.

Kimberly Duke

Understanding Annuities and Their Value

Annuities come in various forms: fixed, variable, indexed annuities, and hybrid, each catering to different risk tolerances and financial objectives. For average wage earners, investing in annuities is a means to safeguard against market volatility and accumulate wealth over time. This is where financial advisors and agents play a crucial role. Their expertise helps individuals understand the nuances of annuity products, guiding them in selecting options that best align with their financial objectives.

The Evolving Landscape of Financial Advising

That said, the financial advisory landscape is constantly evolving, driven by changing consumer expectations and technology advancements. In today’s digital age, clients demand more than just transactional interactions; they seek personalized, insightful guidance that caters to their unique financial situations. To thrive in this environment, advisors must embrace technology and leverage it to enhance their service offerings. An effective technological ecosystem includes educational tools, sophisticated business systems for product comparisons, comprehensive customer relationship management (CRM) systems, and advanced data analytics tools. These elements collectively contribute to creating a seamless and informative experience for clients.

Empowering Clients Through Technology

Interactive tools, informative videos, and online seminars can demystify annuities, clarifying how they work and their potential benefits. Advisors can use these resources

to empower clients, fostering a greater understanding of how annuities fit into their overall financial strategy. Plus, with various annuity products available, advisors need robust comparison tools to help clients evaluate options effectively. Technology solutions that enable clients to visualize different scenarios, returns, and costs associated with various annuities can lead to more informed decision-making. And then once a client invests in a product, advisors need to fuel that relationship. Advanced CRM systems allow for personalized communication, providing insights into client preferences, past interactions, and financial goals. By maintaining detailed profiles of clients, advisors can tailor their recommendations, ensuring that clients receive solutions that best fit their individual needs. It takes an ecosystem of technology for success.

Leveraging Data Analytics for Strategic Insights

Data analytics can also be leveraged to enable advisors to provide more informed recommendations to their clients. Advisors can gain insights that inform their strategies by analyzing market trends, consumer behavior, and product performance. This competitive edge allows advisors to cater to changing client demands, positioning them as trusted experts in the field.

A Strategic, Education-Focused Approach

Successful advisors understand that selling annuities isn’t merely a transaction; it’s about building lasting relationships. When advisors have the proper technology and tools available to provide a strategic, education-focused approach highlighting the potential for wealth accumulation, it will appeal to the average wage earner. Helping clients to realize their dreams of becoming high-net-worth individuals, ultimately improving their clients’ lives, and solidifiying their company’s competitive market position.

About LIDP

For over 44 years, LIDP Consulting Services has focused on creating longterm, strategic partnerships with our clients. We bring technology and business expertise together in a single policy admin system tailored to handle the complexities of the L&A industry. Our combination of advanced business logic and modern, scalable technologies, provides an unmatched policy administration experience. To learn more go to www.lidp.com.

Differentiating Your High Net Worth Service Model in a Democratized Wealth Management Landscape

By Jeff Wick, Vice President, Client Solutions, Cambridge Investment Research, Inc.

Shifting demographics among both financial professionals and investors, and advancements in technology and product platforms are transforming the wealth management landscape. In our vibrant industry, the only constant is that there will always be something driving change. As financial professionals and their firms continually work to adapt in the current environment while also positioning themselves for future success, is the key to thriving in an evolving industry simply getting back to the basic strategies that have served high-net-worth (HNW) clients for decades?

Yes, there are lower barriers to entry to many of the products and services that were previously the sole domain of the wealthy, from a stronger middle-market appetite for alternatives to growing expectations among retail clients for the same holistic support and service previously reserved for multi-family offices. Financial professionals cannot be faulted for seeking out fresh ways to create and deliver exclusive client experiences to attract and retain their most lucrative client segments.

In wealth management, we’ve made “elite” services more accessible to meet the demands of the broader mass affluent client base. However, by addressing the needs of one client segment, we’ve created a void in another, leaving the question of how to deliver the exclusivity HNW clients want, while also fulfilling their fundamental wealth and asset management needs.

To a large degree, products alone will no longer satisfy the demand for elite status this group desires. Successfully serving them will require integrating products with services that are more precisely attuned to what the HNW and ultra-high-net-worth (UHNW) segments want to achieve both in the near-term and for future generations.

More Cowbell

Personalization at scale looks to be a primary benefit of AI-driven productivity enhancements. Consequently, the hyper-personalization HNW clients demand requires more: more resources, more outside-the-box creativity, and more tailored solutions that target the specific needs of individual clients and their families. Much of what used to be a value-add is now the new standard. Attracting and retaining HNW clients is both an art and a science that combines soft solutions with platforms and products to create an unparalleled service experience.

For example, at Cambridge, our Private Client Solutions offering includes outsourced, personal CFO services –a concierge-level solution that’s unique in our space. Through a partnership with Hero CFO, we provide financial professionals’ HNW clients with personal CFO services to oversee their family’s financial management, including customized support such as household bookkeeping, electronic bill payments, and budget preparation. After all, if you are a family that has $50 million, $100 million or more in assets, why wouldn’t you manage your family the same way you would your business? These clients need to know where the money is going, and how their family money is managed.

They also need to help prepare the next generation for when those assets eventually change hands. Effectively working with multiple generations within HNW and UHNW families is central to developing an enduring client relationship. The ability to respect, incorporate, and build upon different perspectives, expectations, needs, and values is crucial to successfully managing these households.

One Size Fits None

There is no one answer to attracting and retaining HNW and UHNW clients across generations. Rather, it requires a customized, fully-integrated combination of products and services that reinforce the next-level exclusivity and tailoring that these clients desire. As personalization becomes more ubiquitous, financial professionals will need to hone in on catering to the wants and needs of HNW individuals to differentiate their services from the masses.

Going back to basics and consistently delivering on fundamentals is the foundation of a value-add relationship. Access to specialized products and services that demonstrate a deep understanding of a client’s goals, as well as an end-to-end service model – one where, as their trusted financial professional, you are the first person they think to call when a life event unfolds – is the type of relationship today’s HNW client expects, and the key to maintaining these relationships for years to come. Member FINRA/SIPC

the Fıeld A Visit With Agents of Change

Kevin Tostado uses his skills developed as an Emmy-winning filmmaker to help clients achieve their financial dreams.

By Susan Rupe

Step into any insurance professional’s office and you’re likely to see a display of the awards they have received over the course of their career. Sales awards, industry honors, certificates from their professional associations — you can find them hanging on the walls or arranged on a shelf.

But not many professionals in the insurance business can boast of winning an Emmy Award. Kevin Tostado is perhaps the only one.

Tostado is a Financial Adviser in San Diego, Calif. offering investment advisory services through Eagle Strategies LLC, a Registered Investment Adviser and a Registered Representative offering securities through NYLIFE Securities LLC. Eagle Strategies and NYLIFE Securities are New York Life Companies. But he also is the owner of Tostie Productions, an Emmy Award-winning, high-definition production company that he founded 21 years ago. Tostie Productions’ mission is to make innovative films and videos that inspire, provoke and entertain their audience.

Tostie Productions produced an Emmy award-winning documentary, “Under the Boardwalk: The MONOPOLY Story,” which was a bestselling title on Amazon and iTunes and was at one point the No. 2 most-streamed title for all of Netflix in the U.S. The television version of “Under the Boardwalk” received four regional Emmy Awards, including Outstanding Achievement in Documentary, Directing, Editing, and Musical Composition/ Arrangement. Tostie Productions also helped produce the feature comedy “Eternity: The Movie,” a film about the rise and fall of a fictitious 1980s rhythm and blues band.

The filmmaking bug bites

Tostado said he always had an aptitude for math and science, and that led him to study electrical engineering at Olin College of Engineering in Needham, Mass. But the

filmmaking bug bit him while he was in college, and he decided to make that his career. It was a natural next step for someone who enjoyed acting in plays during summer camp and studying photography in high school.

“As I was graduating from high school, I realized that film is the intersection of drama and photography,” he said.

While he was a student at Olin, he enjoyed filming various aspects of campus life, editing the film and compiling DVDs to sell at cost.

“I wanted to document what was happening around campus,” he said. “In my junior year, a friend and I decided that the video the school was showing prospective students when they tour the campus was designed for prospective investors or donors to the school. It wasn’t done from a student’s perspective. So we thought we would take all the footage we had been shooting and edit it into a 15-minute piece about student life at our college.”

He said the college admissions department staff liked the finished product and showed it to all incoming students for the next few years.

“My friend and I had such a good experience doing this that we thought we should make a feature film next,” he said. “So the summer before our senior year, we wrote a script together and shot it over the weekends during the fall and winter with college students as the cast and crew. We made the entire feature film for $500. It was a coming-of-age story, loosely inspired by some events that happened to the two of us and one other friend.”

The film was submitted to several film festivals and eventually was shown at a small festival in California, where it won awards for best feature and best cinematography.

Tostado said the experience inspired him to set aside the idea of becoming an electrical engineer and focus on filmmaking instead.

“I figured I had my engineering degree to fall back on if things didn’t work out,” he said.

Taking a chance on Monopoly

Tostado began working for a San Diego TV station that was producing telenovelas, serial dramas that are popular with Hispanic viewers. From there, he started

producing TV commercials and music videos, and eventually he decided he was ready to create another feature film. He chose to focus on the game of Monopoly — specifically, the U.S. and world Monopoly championships that occur every few years.

“No one had explored this topic in depth before,” he said. “I knew there are a lot of Scrabble competitions out there, but

“If you are the type of person who keeps to yourself, you won’t win that many games. You’ll win based on luck, so maybe when you play a four-player game, you might win one in four games. The people who are the best communicators routinely win more than half their games.”

Tostado said he has written a few scripts that haven’t been produced yet.

Tostado poses with the eponymous Mr. Monopoly at the 2009 Monopoly World Championships in Las Vegas.

I didn’t realize there was a competition for Monopoly. I didn’t realize there was a competition where you could win money.”

Before creating the documentary on Monopoly, Tostado said, he thought the popular board game is more a game of chance than a game of strategy. But he soon learned there was more to Monopoly than a lucky roll of the dice.

“Monopoly is a game that involves your interpersonal skills,” he said. “Luck is always a component of the game, and you will have some games where the dice don’t go your way. But even if you land on only a few properties and they’re not what you’re looking for, if you’re a good trader — if you’re able to negotiate with other people around the table, pick someone else and make them the common enemy — you make some trades in your favor and give yourself an advantage that you might not have had otherwise.”

Tostado said the people most likely to win Monopoly at the competition level are the ones with the best communication skills.

“Maybe I’ll come back to them in the future, when my kids have grown up,” the father of three said.

He is no longer actively producing any films as he concentrates on his career with New York Life.

A new puzzle to solve

Tostado and his wife had their youngest child at the beginning of the COVID-19 pandemic, and he realized he needed to shift careers. He wanted something that would provide the flexibility he needed as a parent as well as a more sustainable income. He earned an MBA online and passed the FINRA Series 65 exam because he wanted to learn more about investing. New York Life reached out to him and said he would be a good fit for a career with the company.

“This was not something I initially considered for myself, but it turned out to be a good move for me,” he said.

“I really enjoy the social aspects of this job. I get to meet with a lot of different people, and every person I encounter is

the Fıeld A Visit With Agents of Change

like a new puzzle to solve because everyone’s situation is unique. I enjoy having conversations with people to figure out what we offer that can be the right fit for them and help them get some peace of mind.”

Tostado works with many young parents who are getting settled in their careers and realize they have loved ones to protect.

“If, God forbid, something happens to them and they don’t come home, what can I do to make sure their loved ones won’t be hurting financially?” he said. “Obviously, I can’t help too much with the emotional burden of losing a loved one, but if I can help on the financial side and help them to have that peace of mind, knowing that if something were to happen we have life insurance or income protection solutions so they’re not in a position where they can’t pay the mortgage or other expenses their family faces.”

Tostado also works with small-business owners, and he has found a niche working with the owners of San Diego’s many microbreweries.

“One of the projects that I worked on as an independent film producer was a documentary about the microbreweries of San Diego County, Calif.,” he said. “We have more than 150 breweries in San Diego right now.

“One thing I learned while working with them was that they have employees. They need to offer benefits as well. But because a lot of those businesses are so focused on making sure that the next beer gets finished in time so they can keep the taps flowing and the doors open, they’re not taking the time to think about what the future of their company is. They don’t have the time to make sure that they’re providing enough benefits to their employees to be able to make sure that they won’t leave to go to the company across the street that’s offering better benefits. So helping these microbrewery owners recruit and retain employees for their benefits is something that I enjoy doing.”

Tostado is active in the San Diego affiliate of the National Association of Insurance and Financial Advisors. His service to the organization and to his profession earned him one of NAIFA’s 4 Under 40 Awards in 2024.

Will Tostado ever give up the insurance business to go back to producing films?

“I’m still a member of the Producers Guild of America, but I don’t want this to take away from what I’m doing for my clients,” he said. “When my kids are older, I might do some creative writing for fun. And if someone wants to produce a script that I’ve written — great! But right now, my focus is on my financial practice and serving my clients to the best of my ability.”

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

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This material may contain a general analysis of federal tax issues. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances. These materials are for informational and educational purposes only and are not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

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

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

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

Tostado proudly displays his Emmy for “Under the Boardwalk: The MONOPOLY Story.”

•

•

Life premium sets record in 2024

A strong fourth quarter drove life insurance new premium to another record, LIMRA reports. Total new annualized premium increased 4% in 2024 to $16.2 billion according to LIMRA’s preliminary life insur ance sales survey results. In 2023, total new premium hit a then-record $15.7 billion.

This marks the fourth consecutive year of record-high premium. In 2024, policy count was level with 2023 results. In the fourth quarter, total new premium jumped 14% year over year to $4.6 billion. The number of policies sold rose 2%, compared with fourth quarter 2023 results.

Variable universal life was the star in Q4, with new premium surging 56% to $845 million in the fourth quarter. The number of policies sold jumped 11% in the quarter. For the year, VUL new premium increased 27% year over year to $2.4 billion and policy count increased 6%.

Indexed universal life new premium jumped 10% to $1.1 billion in the fourth quarter. New product designs and broader distribution propelled sales for this quarter. Policy count grew 9% in the fourth quarter. IUL new premium totaled $3.8 billion in 2024, up 4% from prior year. Policy count grew 11% year over year.

L&G TO SELL ITS US INSURANCE BUSINESS

Legal & General announced it will sell its U.S. insurance business to Japan’s Meiji Yasuda Life Insurance Co. The $2.3 billion deal is part of L&G’s broader effort to refine its strategic focus.

The sale includes L&G’s U.S. protection and pension risk transfer operations.

Meiji Yasuda will acquire full ownership of L&G’s U.S. protection business while also securing a 20% economic stake in its U.S. PRT unit. The Japanese insurer also will purchase a 5% equity stake in L&G. The transaction is expected to close by the end of 2025, pending regulatory approvals.

RGA ANNOUNCES REINSURANCE DEAL WITH EQUITABLE

Reinsurance Group of America said it has agreed to reinsure a diversified block of life insurance products from Equitable and expand their strategic partnership.

RGA is reinsuring 75% of Equitable’s in-force life insurance liabilities. The block includes approximately $18 billion of general account reserves and $14 billion of separate account reserves.

Under the agreement, RGA will reinsure $32 billion of a mix of life insurance products, expecting to deploy $1.5 billion of capital.

At our core is helping families alleviate financial anxiety.”

— Todd Jones, chief financial officer, Northwestern Mutual

5 TROUBLING MORTALITY TRENDS

The alarming spike in U.S. post-pandemic mortality rates, which vexed scientists and affected life insurance earnings, appears to be normalizing, according to the latest health statistics. Yet, the public health data hold other surprising numbers that may foretell trouble ahead for both Americans’ health and their insurers.

The Insurance Collaboration to Save Lives, a nonprofit organization that analyzes life insurance claims and encourages insurers to screen, test and triage members to reduce excess mortality and morbidity, has identified what it said were five troubling trends affecting the nation’s health. Those five trends are:

1. Cardiac and circulatory. Rates for many cardiac- and circulatory-linked causes up 8%-36%.

2. Neurological and nervous system. Rates for many key neuro/nervous causes up 16%-39%.

3. Metabolic and digestive. Rates for many key metabolic and digestive causes up 10%-137%.

4. Cancer. Rates for many key cancers up 10%-50%.

5. External causes. Rate of accidents, assaults and overdoses up 11%-30%.

Indexed universal life sales in 2025 are projected to grow between 2% and 6% over last year.

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While your clients are focusing on the day to day, EssentialGuard Term 10-, 20-, and 30-year life insurance can ensure it’s working for them behind the scenes.

Designed with competitive premium rates and riders that allow clients to meet their specific needs, EssentialGuard Term death benefits are level and guaranteed to not change for the life of the policy. Additionally, conversion privileges are available to convert the buyer into a lifelong plan.

For information about a career with Kansas City Life Insurance Company, call Dwane Turnage, LUTCF, Vice President, Marketing, 855-277-2090

How partnering with a CPA firm boosted my life insurance practice

Matching the right advisor to the right accounting firm can be challenging, but worth it.

By Steven J. Spector

After 22 successful years as an agent with Northwestern Mutual, I left for the independent market. When I joined Kolb & Company (now Sikich), they were the largest independently owned accounting firm in southeastern Wisconsin. I’d like to share some thoughts on what made this partnership work so well.

Why is it that there are very few CPA firms in the United States that have an in-house, dedicated life insurance specialist? It seems to me that this would be a huge advantage for the firm because it could provide a valuable service to their clients. The problem is that it can be difficult to match the right agent with the right accounting firm.

I was fortunate to have had more than 10,000 clients when I joined Kolb. I brought a successful practice to their firm, and they recognized that. Kolb also had a substantial clientele that they could bring to the table. A newer agent who does not have a strong base clientele does not bring as much value and will not be a good fit.

The life insurance agent who wants to have a successful partnership with a CPA firm must have a solid sales record over a number of years. Accounting firms are not structured to train agents. They look for excellent partnerships and for results. Initially, there must be a discussion as to whether the accounting firm has the volume of clients to be able to refer to you. The agent must develop an extremely strong bond with the CPAs,

as they will be the referral source going forward. Spending a lot of time together will enhance your relationships, as you will each learn how the other works.

The CPAs were fantastic. They introduced me to their referral sources without hesitation. These referrals included attorneys, bankers, business owners and consultants. A CPA is a client’s trusted advisor, so when they introduced me to their clients, these referrals trusted me as well.

The insurance specialist must be completely independent and unbiased in their product recommendations to clients. Showing any favoritism to carriers is not a good idea.

The CPAs also must be unanimous in agreeing to bring the insurance specialist on board. This buy-in starts with the partners and flows down to the senior managers and other managers. When I was set to join Kolb, the partners and I held a meeting where we laid out the game plan for our new alliance. I told them that if they did not believe we could take our insurance services division to

a national level, I was not going to join them. All the partners agreed that we could, and I believed them. I was made a partner in our financial services area shortly after joining the firm.

One of the most important things I did upon arriving at Kolb & Co. was to begin to educate the CPAs on how life insurance works and how I presented to clients. Educating the CPAs about insurance concepts was important and helped establish my competence in their eyes.

We always suggested performing independent, unbiased reviews of clients’ insurance programs. Why was this so important? First, it set us apart from other agents who were not as thorough or were not actively preparing these reviews. We explained to clients that my role was not to destroy the existing relationships they had with their agents, but to enhance their relationship with the firm. Most of the time, clients told me they had not had much contact with their current agent and that we should proceed. What the insurance reviews did was educate the client about what they

owned. We discussed issues with ownership, beneficiary designations, danger of policy lapse or term expiration. We also discussed whether their current coverage effectively met their current goals and objectives for protection. This service was free.

When Kolb & Co. merged with Sikich in 2013, our footprint expanded unbelievably. We now had accounting offices throughout the Midwest, along with other advisory service offices throughout the country. I needed to travel to these offices to get to know these people and develop our professional as well as personal relationships. I was the only insurance specialist in this very large accounting firm. Being present worked!

Because our CPAs were happy with having a life insurance specialist inhouse, referrals began to flow in faster than ever. This did not happen overnight, but we developed incredible relationships over a short period of time.

It takes the right combination of the agent and the accounting firm to make this arrangement successful. It is not easy, but it’s rewarding for all parties involved: most of all for our clients.

What are three reasons why an agent would not want to align with a CPA firm?

1. If the agent leaves their current agency and the new alliance does not work out, they will then have a new issue to deal with (i.e., finding new employment).

2. The agent will have to give up some percentage of their compensation.

3. A great deal of time must be spent working in the business, and it may require more travel than they are accustomed to. This is why a new, younger agent with a young family might not be a suitable fit.

What are three reasons why an agent would want to align with a CPA firm?

1. The alliance will differentiate the agent from the stand-alone agents.

2. The agent will be viewed differently by referral sources, CPAs, and clients. The agent will be seen as more of a specialist than as an agent.

3. The insurance specialist will be able to strengthen their clientele by acquiring new referrals from the CPAs and clients met through the firm.

My idea of becoming the in-house insurance specialist with an accounting firm was the bright light that shone in my mind. I was able to continue to use my skills as an agent and continue to work with existing clients, while being able to expand my reach globally through the alliance with a national CPA firm. This was a true winwin situation!

Steven J. Spector is a retired partner of Sikich. Contact him at steven.spector@ innfeedback.com.

ANNUITY WIRES

Life and annuity insurers on the hunt for reinsurance

Life and annuity insurers are increasingly turning to reinsurance and the use of sidecars to manage risk and underwrite larger deals, AM Best reported recently.

The Best’s Special Report, “Use of Life/Annuity Sidecars as Asset-Intensive Reinsurance Solution Expected to Increase,” states that because of strong premium growth amid rising interest rates, the individual annuity composite has steadily seen its reinsurance leverage increase by 66% in the most recent five-year period.

Likewise, first-year premium surplus relief is the highest it has been in 10 years as companies seek to manage new premium growth. Overall, total ceded reserves to sidecars more than tripled from 2021 to 2023, with Martello Re (Mass Mutual), Ivy Re II (Global Atlantic/KKR) and Prismic Life Re (Prudential/Warburg Pincus) combining to make up nearly three-quarters of the amount.

“The vast majority of reserves ceded are covering liabilities for indexed and fixed annuities. We expect this trend to grow much more significantly as more deals closed in 2024 and the environment continues to be conducive for annuity growth,” said Jason Hopper, associate director, Industry Research and Analytics, AM Best.

REPORT: BRIGHTHOUSE FINANCIAL LOOKING FOR A BUYER

The Financial Times recently reported that Brighthouse Financial is working with investment bankers at Goldman Sachs and Wells Fargo on a potential sale.

Brighthouse executives did not address the possible sale of the company during a recent conference call to discuss 2024 earnings. Wall Street analysts are concerned because Brighthouse continues to have trouble achieving and maintaining a responsible risk-based capital ratio.

Brighthouse struggled throughout 2024 to bring its RBC ratio up to the industry standard of 400% to 450%. RBC requirements provide a ratio to assess the

level of risk associated with an insurance company’s assets.

It took a $100 million infusion from the holding company for Brighthouse to finish Q4 with a 400% RBC ratio.

MASSACHUSETTS ADVISOR SET FOR APRIL TRIAL ON BAD ANNUITY SALES CLAIMS

We see increasing interest in solutions that offer investment protection and guaranteed lifetime income, allowing for greater certainty for the future.”

Financial Group, for “recommending that their advisory clients invest in insurance products that paid Cutter a substantial up-front commission without adequately disclosing Cutter’s and CFG’s financial incentive to sell the products.”

The case is being closely watched by industry trade associations that adamantly oppose further federal encroachment on state-regulated insurance.

A Massachusetts financial advisor claims the Securities and Exchange Commission is trying to ambush his defense in an annuity sales complaint by adding five surprise witnesses and “entirely new theories of liability” two months before trial.

Jeffrey Cutter asked a federal judge to deny the five witnesses the SEC added for the April 14 trial start. A decision had not been made by the time this issue went to press.

In March 2023, the SEC filed charges against Cutter and his advisory firm, Cutter

MORNINGSTAR CONSIDERS ‘GUARDRAILS APPROACH’ TO RETIREMENT INCOME

New research from Morningstar looks at a new metric — the spending/ending ratio — to help assess various retirement spending strategies for retirees weighing lifetime spending versus leaving a legacy.

Flexible portfolio-spending strategies, delaying Social Security and purchasing annuities can help increase lifetime income while making less money available as a bequest.

Morningstar researchers broke down several spending strategies during a recent webinar. But a flexible strategy called the guardrails approach, when combined with delayed Social Security claiming, was found to yield the highest level of lifetime income.

Researchers said that cash flows from the guardrails strategy appeared volatile by themselves, but adding the increased Social Security monthly benefit added valuable stability to the plan.

— Laura Prieskorn, Jackson Financial CEO

Choosing the scenic route: Why diversification matters

You’ll find opportunities to explore new paths through internal diversification of annuities.

By Lori Seaton

Last summer, I took a road trip on Route 66. I could have chosen the interstate — a faster, more direct route; instead, I opted for the dusty, beaten-up “Old Route 66.” It wasn’t the quickest way to my destination, yet it was by far the most rewarding. Along Route 66, I discovered incredible attractions I would have missed on the highway: quirky roadside diners, historic landmarks and breathtaking views. The journey itself became as valuable as the destination. Annuities remind me of that trip. On the surface, annuities may seem like a straightforward, one-lane highway to reaching a financial goal such as

retirement income or stability. But if you take a closer look, you’ll find opportunities to explore new paths through internal diversification. Allocating premium to model blends within a fixed index annuity is like choosing the scenic route on the financial journey — it opens up options that can improve the experience and help clients arrive at their goals sooner, potentially with more “gas” in the tank.

What are model blends?

Model blends are like preset navigation systems for an annuity. They combine various allocation paths — such as equities, fixed income and alternatives — into one well-planned route. Each blend can be tailored to different preferences or risk levels.

Why diversify within an annuity?

Diversifying within an annuity is like mapping multiple routes for the trip. It helps

clients stay on course, no matter what surprises the market throws their way.

Lower risk: Allocating across different asset classes within the annuity could reduce the impact of any single roadblock. For example, during a stock market downturn, a blend with both equity and diversifier indices might lose less value compared to an all-equity allocation.

More growth opportunities: Model blends can open new paths to growth by including a variety of indices. This ensures clients don’t miss out on opportunities that could speed up their journey to financial goals.

Better fit for the overall plan: The right model blend helps align the annuity with the client’s broader financial map. For instance, a client with an overall financial portfolio focused on safety might choose an aggressive blend inside the annuity for added growth potential, or a client with a stock-heavy portfolio might

prefer a conservative blend within their annuity to provide even greater balance and stability.

Ease of management: Model blends work like a GPS that automatically updates as conditions change. They’re professionally managed and may rebalance automatically, saving you time and keeping the strategy on track.

Common misconceptions about model blends

Just as travelers might hesitate to trust a GPS, some advisors may be unsure about model blends due to misconceptions. Let’s clear up a few myths.

2. How to choose the right blend. Pick a blend that fits the client’s journey. For example: A retiree who values stability might prefer a conservative blend, while a younger client with time to recover from market ups and downs might benefit from a balanced or an aggressive blend.

3. When to communicate the benefits. Help clients see why this strategy works. Use simple visuals, such as a road map or timeline, to show how diversification reduces risk and smooths the ride.

4. A plan to review and adjust as needed. Clients’ needs and the markets change over time. Regular reviews ensure the selected blend remains the best route.

Allocating premium to model blends within a fixed index annuity is like choosing the scenic route on the financial journey — it opens up options that can improve the experience.

Myth 1: Model blends are too rigid.

Truth: Many blends allow for changes along the way and can be adapted as a client’s needs evolve.

Myth 2: Diversifying inside an annuity adds unnecessary complexity.

Truth: Model blends can simplify the process by bundling different allocation options into a single, straightforward solution.

Myth 3: Smaller annuities don’t need internal diversification.

Truth: Even a small allocation can benefit from being spread across multiple options. Every road trip can benefit from knowing an alternate route, no matter how short the journey.

Applying a model blend

Information and awareness are powerful in planning to meet a client’s retirement needs. The best way to use a model blend includes understanding:

1. Your client’s goals. Start by identifying the client’s financial destination. Is the client looking for growth, steady income or protection? How much risk are they comfortable taking?

Many annuities allow for reallocations, keeping you in control of the journey.

Like in any adventure, search for hidden gems

My Route 66 trip showed me there’s more to a journey than getting from Point A to Point B. Likewise, exploring the options within an annuity can reveal unexpected opportunities. Diversifying with model blends can offer clients a smoother, more rewarding financial ride. It can help ensure their annuity is more than just a vehicle — it’s a well-planned route with flexibility and hidden gems along the way.

The next time you’re working with a client’s annuity, think about taking the scenic route. Don’t just focus on the destination; explore the roads within to uncover options that can make all the difference in their financial journey.

Lori Seaton is director of strategic business development at Sammons Financial Group. Contact her at lori.seaton@innfeedback.com.

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HEALTH/BENEFITS

LTCi market maturing as need increases

The long-term care insurance market in 2025 is maturing and robust but still needs a large number of sales to help meet the need that is out there. That was the word from the American Academy of Actuaries.

LTCi accounts for only about 8% of total private spending on long-term care, said Aaron Wright, vice chairperson of the academy’s Long-Term Care Committee. Of the $468 billion spent on long-term care in 2021, public spending accounted for $334 billion while $134 billion came from private spending. Out-of-pocket spending makes up the largest percentage of private spending on care.

When you have health insurance, you should have confidence that it’s going to cover your health care needs.”

from 2001 through 2022, according to the study.

The need for long-term services and support will continue to grow, Wright said, as all the 73 million baby boomers will pass the age of 65 by 2030. About 70% of those over 65 will develop severe care needs.

INSURERS PUSH BACK ON GLP-1 COVERAGE

The final days of the Biden administration saw a proposal that Medicare and Medicaid cover GLP-1 drugs such as Wegovy and Ozempic for weight loss. But insurers are saying, “Not so fast.” Health plans are lobbying the Trump administration to scrap the idea.

The annual cost of GLP-1s can run well into five figures. The Centers for Medicare & Medicaid Services estimated its proposal would cost the federal government nearly $40 billion over 10 years. But the University of Southern California estimates that covering weight-loss drugs would save Medicare more than $175 billion over 10 years

As it stands, Medicare only covers GLP-1s for diabetes and heart disease.

Congressional scorekeepers found that Medicare already covers GLP-1s for half of seniors with obesity. But insurers say the policy to expand coverage is rushed, is too broad and may be illegal.

HEALTH COMPANIES RETURN $2.6T TO SHAREHOLDERS

Payouts to shareholders of large publicly traded health companies more than tripled over the past two decades , new research shows. In 2022, these companies paid $170 billion to shareholders in dividends and stock buybacks, a 315% increase over the $54 billion paid out in 2001, according to a study published in JAMA Internal Medicine.

A total of 92 companies that appeared in the broad S&P 500 index returned $2.6 trillion to shareholders

1 in 3 Americans don’t have the money to pay for the medication they need.

Source: KFF

The study said 19 companies made about 80% of the total payouts over this period. Drug companies dominated the list, with Pfizer, Johnson & Johnson, Merck and Amgen paying out the most lucrative returns, the study said. UnitedHealth Group, the health insurance giant that also owns the pharmacy benefit manager Optum Rx, ranked fifth.

STATES EYEING INSURERS’ USE OF AI IN CLAIMS

More state legislatures are looking at tighter oversight of the health insurance industry, including its use of artificial intelligence to screen claims and issue denials.

California has already prohibited the use of AI for coverage denials , and lawmakers in Georgia, New York  and Pennsylvania are vowing to bring up the issue this year.

The insurance industry has defended its use of AI, saying the tool can improve customer experience, speed the

— California State Sen. Scott Wiener, D-San Francisco

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The power of ‘no’: Turning passive enrollment into active decisions

A surprising strategy to maximize employee benefit enrollment.

By Tom Smith

Adecade ago, benefits enrollment was a highly personalized process. Employees sat down “knee to knee” with someone from human resources, discussing options and making informed choices about coverage. Those face-to-face interactions ensured that every employee either accepted or actively declined benefits, leading to higher participation and engagement. Fast-forward to today, and the landscape has changed dramatically. The pandemic accelerated the shift to digital self-service platforms, leaving many employees to navigate the enrollment process on their own. Technology, while efficient, has introduced new challenges — clunky interfaces, poor communication and limited engagement with voluntary benefits.

As a result, passive enrollment has become the norm, and insurance brokers are facing an uphill battle to ensure clients’ employees make informed decisions about their coverage.

So, how can brokers help clients drive meaningful engagement and maximize benefit participation? Surprisingly, it all comes down to one simple strategy: requiring employees to actively decline coverage.

The power of the regret of ‘no’

Behavioral economics tells us that people are more likely to make a decision when faced with the potential regret of not acting. This concept, known as the power of the regret of ‘“no,” can be a game-changer in benefits enrollment. If employees are not required to make an active choice, many will simply avoid the process altogether. But when forced to say “yes” or “no,” they instinctively weigh the consequences of declining coverage.

For example, consider an employee

reviewing long-term care insurance. If they’re not prompted to make a decision, they may never consider the financial impact of an unexpected illness or injury. But if they are required to accept or decline, they must confront the possibilities: “What if I need this coverage in the future? Will I have enough savings to cover costs?” This moment of reflection — however brief — can push more employees toward opting in.

The problem with passive enrollment

Although passive enrollment may seem efficient, it often leads to lower engagement and missed opportunities for coverage. Many employees are unfamiliar with the benefits being offered or assume that their current coverage is sufficient. Without a structured process that forces them to engage with their options, they may overlook critical benefits that could provide financial security in times of need.

What’s more, with a growing remote workforce, the absence of in-person enrollment meetings has made it even easier for employees to ignore benefits communications. A passive approach removes the urgency to review options, leading to last-minute decisions — or worse, no decision at all.

For brokers, this shift presents a challenge: How do you help clients increase engagement and ensure their employees make informed choices? The solution lies in reintroducing an element of active participation by requiring employees to opt in or out of coverage.

Real-life impact: A simple ‘yes’ or ‘no’

To illustrate this concept, consider a personal example: When my child went off to college, I repeatedly received emails about tuition reimbursement insurance. Initially, I ignored them — I had already paid tuition and didn’t see the value.

Then, I received a final notice: “Your child cannot attend classes until you accept or decline coverage.” Forced to decide, I visited the website with the intention of opting out. But before declining, I noticed the cost of this insurance — it was far lower than I expected. Suddenly, I thought, “I’d be crazy not to take this coverage!” And just like that, I purchased insurance I had previously dismissed.

This experience perfectly illustrates the power of requiring a response. Without that final nudge, I never would have given the coverage a second thought.

A broker’s role in driving engagement

Because you are an insurance broker, your role is to help clients implement strategies that drive participation and improve employee decision making. Passive enrollment may be the industry trend, but by encouraging clients to require active elections, you can significantly boost engagement rates.

Here are a few best practices I suggest for brokers.

1. Encourage active enrollment. Work with clients to shift from passive to active decision making. Require employees to formally accept or decline coverage rather than letting them bypass the process altogether.

2. Leverage behavioral economics. Use the “regret of no” principle to help employees recognize the value of coverage before opting out. When employees visualize the potential consequences of declining benefits, they are more likely to opt in.

3. Enhance communication strategies. Clear, consistent messaging is essential. Educate employees on their options well before the enrollment deadline. Use multiple communication channels — email, webinars, video content and interactive tools — to ensure the message reaches them.

4. Simplify the enrollment experience. Many employees disengage due to complex enrollment platforms. Work with clients to ensure their systems are user-friendly and provide clear information on benefits options.

5. Collaborate with HR teams. HR teams play a crucial role in driving participation. Work closely with them to ensure they have the resources and training to communicate benefits effectively. Offer enrollment support services to help employees navigate their choices.

Make ‘no’ an active decision

The shift toward digital, self-service benefits enrollment isn’t going away. But brokers have the opportunity to shape the way employees engage with their benefits. By helping clients implement strategies that require employees to actively accept or decline coverage, brokers can drive higher engagement, increase participation rates and ultimately ensure that more employees are adequately protected.

Passive enrollment may be convenient, but it comes at a cost — missed opportunities, lower engagement and financial risk for employees. By making a simple change — requiring a decision — brokers can play a key role in improving outcomes for their clients and their employees. After all, when it comes to benefits enrollment, sometimes all it takes is a simple “yes” or “no” to make a life-changing difference.

Tom Smith is the vice president of enrollment services with Trustmark. Contact him at tom.smith@ innfeedback.com.

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The ‘referral cliff’ is coming

An increasing number of consumers are selecting their advisors through digital marketing rather than referrals, a phenomenon that Ficomm CEO and co-founder Meg Carpenter described as “the referral cliff.”

“ Demographic shifts in the population are making referrals less valuable than ever,” said Carpenter. Her remarks were in response to Ficomm’s 2024 consumer research, which highlighted shifts in what most influences how investors choose advisors.

The research found that although 45% of investors selected their advisors through digital marketing, only 29% of firms prioritize digital marketing as a client acquisition strategy. Conversely, 47% of firms rely primarily on referrals, despite only 29% of consumers requiring a referral when hiring an advisor.

The research also found that 60% of clients age 60 and over rely on referrals to hire an advisor, making it the last age group where this is the majority preference.

Why more retirement-age Americans are working

It’s called “a tale of two retirements.” Some Americans are happy to leave the workplace for good, while others continue to stay on the job because they’re passionate about their work. But about two-thirds of the over-65 set who are still working do it because they must. They see few alternatives, given that their Social Security checks can’t sustain them.

The Bureau of Labor Statistics reported the size of the American workforce aged 65 and older has ballooned more than 33% over the past decade and far outpaced the overall market. Two of the factors driving this are increased life spans and the shift away from traditional retirement pensions.

Due to that growth, workers ages 65 and older accounted for 7% of the total workforce in 2024. That share is up from around 5.7% a decade ago.

If you want to go broke, retire at 65

Morningstar Center for Retirement and Policy Studies used its new retirement savings simulation tool to determine how long income might last during a typical retirement . The tool makes this estimate based on individual characteristics (such as age, income and savings behavior), health care costs, and projected longevity. They found that 45% of those who retire at age 65 are likely to run out of cash in retirement.

Movin’

on up

61% of Black Americans believe their personal financial situation will improve in 2025.

Source: LIMRA

The gap between fear and action

Thrivent’s latest Financial Fitness Survey finds many Americans have widespread financial concerns but haven’t taken the necessary steps to address them. This includes boosting their financial skills, knowledge and confidence, especially when it comes to long-term financial planning and paying off debt.

The survey found more than half of Americans (53%) are very or somewhat worried about their ability to retire when they want . Yet only 28% of Americans say they are currently saving for retirement. Similarly, 48% of Americans are concerned about their debt, yet only 36% are planning to prioritize paying off their debt this year.

A lack of financial confidence could be the reason for inaction, and it is worst among the youngest generation. Generation Z (21%) are the least likely to report they are very confident managing their finances compared to millennials (26%), Generation X (29%) and baby boomers (38%).

Single female retirees are more likely than couples and single males to run out of cash if they retire at 65.

The solution to running out of cash? Working longer, Morningstar said. Continuing to earn job-related income until age 70 would mean that only 28% of all retirees would run out of cash before they die. That includes 36% of single females, 26% of couples and 21% of single males.

Retirement challenges differ regionally

Investors are grappling with different retirement priorities, depending on where they live. • Ayo Mseka

While investors across America remain concerned about retirement because of various financial headwinds, the challenges and priorities they are grappling with differ based on the region of the country they live in, according to the Advisor Authority study from the Nationwide Retirement Institute.

As investors consider whether relocating will improve their retirement finances, 32% of all investors do not believe their current location makes sense financially as a place to retire, the survey said. This is led by those in the Northeast (41%) and the West (37%), who often face higher tax burdens. About 1 in 6 investors (16%) across the country said that they will be forced to relocate to a more affordable region due to the cost of living in their area, the survey said.

Additionally, 41% of nonretired investors expect to retire at age 66 or later, with Northeasterners (47%) being slightly more likely to share this view.

“While it’s clear that investors across America are facing many of the same challenges, their attitudes and actions

may look a little different, depending on where they live,” said Eric Stevenson, president of Nationwide Retirement Solutions. “Between inflation and a lack of savings, many preretirees are likely feeling they don’t have enough to make a traditional retirement work. Our survey provides great insights to help advisors, financial professionals and plan sponsors across the country understand these investors and tailor their approach to meet their personalized needs.”

Investors in the Northeast

According to the survey, while many Northeastern investors remain optimistic about their retirement prospects, high living costs are prompting significant financial lifestyle changes before they leave the workforce. Nearly half (46%) of Northeasterners describe their financial outlook for the next 12 months as optimistic.

These investors indicated they had a median retirement savings of about $250,000. However, 20% expect to relocate to a more affordable region in retirement because of the cost of living, surpassing the national average of 16%. In addition, 1 in 4 Northeastern investors (25%) anticipates working in retirement to supplement their income

out of necessity due to cost of living, and 19% of nonretired Northeasterners said that they might withdraw money from their retirement savings prematurely to afford the cost of living if they retired in the next 12 months.

According to Nationwide Retirement Solutions participant data across corporate, nonprofit and government sectors, some plan participants in the Northeast took potentially adverse actions with their 401(k) or 403(b) plans in 2024. Participants in this region had the second-highest level of contribution stops and the lowest number of contribution increases among all regions.

Inflation, smaller nest eggs impact Midwest retirement confidence

For Midwest investors, inflation remains a key concern, with only 41% saying they were optimistic about their 12-month financial outlook — the lowest in all regions. Survey respondents also reported the smallest nest eggs — at about $200,000.

While Midwestern investors may be the most pessimistic, they also are the least likely to make financial lifestyle changes, perhaps due to the generally lower cost of living and taxes in their region, the survey said. Just 32% of Midwesterners said that they plan

to work beyond age 65 — the smallest share of any region. And only 11% expect the cost of living in their area to force them to relocate to a more affordable region for retirement, well below the national average.

Nationwide Retirement Solutions plan participants across corporate, government and nonprofit sectors in this region had the highest level of contribution increases to defined contribution plans in 2024, likely positioning themselves for better financial security over time.

Southern investors expect to work longer

While 43% of Southern investors expressed an optimistic financial outlook for the next 12 months, they shared many of the same concerns as do the rest of the country. Nearly 3 in 10 (27%) nonretired Southerners expect to delay retirement, and 39% said that they would need to continue working in some capacity to supplement their income if they retired in the next 12 months. Further, 62% believe the norm of retiring at 65 doesn’t apply to people like them, while 72% said that living costs will impact their ability to retire. Southern survey respondents indicated they held median retirement savings of $250,000.

Nationwide Retirement Solutions participant data across corporate, government and nonprofit sectors shows participants in the Southern region were most likely among those in all regions to take hardship withdrawals from their 401(k) or 403(b) plans in 2024, a move that could have a long-term impact on their financial future.

Confidence in the West

More than 4 in 10 (44%) investors in the West feel optimistic about their financial outlook in the next 12 months. What is more, investors in this region indicated the highest median level of savings of all regions, at about $300,000, the survey said. However, inflation weighs on Western savers, the survey said, with 7 in 10 (69%) saying that the cost of living will affect their ability to retire, and about 31% saying that their current state or city is not the place they want to be in retirement.

Nationwide Retirement Solutions plan participant data across public, private

and nonprofit sectors shows Western savers took some potentially adverse actions in 2024, with higher levels of contribution stops and decreases in their 401(k) or 403(b) plans when compared to those in other regions.

Preparing for financial challenges

Advisors across the country are bracing for financial adversity, with 78% expressing concern about a U.S. economic recession over the next 12 months, the survey said. Inflation tops the list of client concerns over the next 12 months, cited by 34% of advisors, with the following regional variations: Advisors said inflation concerns among clients were the highest in the Northeast and Midwest (36% each), followed by the South (34%) and West (29%).

Tax planning and retirement savings remain top priorities across regions. Advisors frequently discuss tax planning strategies (Northeast 33%, Midwest 37%, South 37%, West 33%) and accumulating sufficient savings to enter or stay in the region in retirement (Northeast 27%, Midwest 31%, South 32%, West 33%) with their clients.

Advisors are also emphasizing retirement timing and long-term care with clients. They are frequently talking to clients about when they will be financially ready to retire (41% West, 33% Northeast, 37% Midwest, 32% South) and considering long-term care solutions (34% West, 22% Northeast, 21% Midwest, 24% South). Advisors are largely unified in the solutions they use to help clients protect their assets against market risk, widely using annuities, with advisors in the Midwest (85%) and West (78%) most frequently incorporating them into client plans.

Why knowledge of differences matters

It is important for advisors to know the regional differences of their retirement-saver clients as they work with them. Stevenson explained that while Americans are facing many of the same challenges — inflation, volatile markets, a lack of retirement savings — their attitudes and actions may look different depending on where they live, explained Stevenson.

“Advisors will be in a better position to meet clients where they are if they come to the table with a basic understanding

of the challenges clients in their region are likely to be grappling with,” said Stevenson, adding, “Every client is different, but this data may serve as a good starting point for gaining a general understanding of the perceptions, attitudes and behaviors they may need to address in personalized planning conversations.”

For example, Stevenson explained that high living costs in the Northeast and West are a major concern for investors in these regions as they think about how to manage their income in retirement. While the cost of living may be lower, those in the Midwest lag behind investors in other regions in their focus on retirement planning, with 76% saying they spend no time in a typical month planning for retirement. In the South, investors are confident about their retirement prospects but expect to work longer, with 39% saying they would continue working in some capacity to supplement their income out of necessity if they retired in the next 12 months.

Using this knowledge

So, how can advisors use this knowledge with their clients? Stevenson explained that by identifying key challenges that their clients likely will need to address, advisors can start to identify potential strategies or solutions based on these themes now.

“This could help them be more efficient when it comes time to create a personalized plan for their client,” he said.

For example, Stevenson explained, advisors in the Midwest and South may want to start thinking about tax optimization strategies. Those in the West and South should be prepared to discuss accumulating sufficient savings to help clients enter or stay in retirement. Advisors in the West and Midwest may need to come to the table ready to help clients evaluate when they will be financially ready to retire, and those in the West and South could be well served by being prepared to discuss long-term care solutions.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-inchief of NAIFA’s Advisor Today magazine. Contact her at amseka@ INNfeedback.com.

Conquering self-sabotage and shushing negative self-talk

The mental shift that creates a foundation for growth and success.

By Casey Cunningham

Positivity. Optimism. Confidence. These are the hallmarks of successful insurance sales leaders and their teams. But beneath the surface, a hidden challenge often undermines their potential: negative self-talk.

According to the National Science Foundation, 80% of the thousands of thoughts we have each day are negative. Pair this with the high-pressure, performance-driven nature of the insurance industry, and it’s no surprise that many professionals fall victim to self-doubt and impostor syndrome.

Impostor syndrome — the persistent belief that one lacks the talent or capability

for success despite evidence to the contrary — affects up to 82% of professionals at some point in their careers. For insurance professionals, whose role requires confidence, trust-building and proactive engagement with clients, this mindset can be especially destructive. Left unchecked, negative self-perception hinders productivity, limits achievement, stifles growth and weakens team performance.

So, how can insurance leaders and their teams overcome this damaging cycle of self-sabotage? Based on deep experience, these strategies have been proven to rebuild confidence, foster resilience and unlock long-term success. Here’s what works.

Mastering your mental foundation

The first and most crucial step is internalizing three transformative words: “I am responsible.”

Insurance professionals must take ownership of their thoughts, attitudes and performance. This mental shift — from externalizing blame to internalizing responsibility — creates a foundation for growth and success. When salespeople believe in their capabilities and commit to a winner’s mindset, they can rewrite their narrative and chart a new course.

As Henry Cloud, author of Boundaries for Leaders, explains, extraordinary performers excel in two areas: self-belief and prioritization. They maintain positive self-talk (“I am a top producer”) and align their actions with aspirational goals. For insurance professionals, this means replacing negative thoughts with affirmations that build confidence and drive success. And here’s why this is key: The next step could transform how they approach every challenge.

Building mental resilience

Self-awareness is key to breaking the cycle of negativity. Leaders can encourage their teams to:

» Journal their thoughts. Capture the internal dialogue throughout the day. Identify recurring negative themes and actively replace them with positive affirmations.

» Reframe mornings. Start each day with a deliberate focus on opportunities instead of challenges.

» Debrief sales interactions. After client meetings, reflect on successes and areas for improvement. Highlight strengths to reinforce positive behaviors.

» End with gratitude. Write down three things they are grateful for each evening. This practice fosters a constructive mindset, setting the stage for better results.

With consistent effort, insurance professionals can reprogram their thinking and build a foundation of confidence and optimism. But this is just the start — the next step unlocks even greater clarity and purpose.

Charting your success journey

Many insurance professionals who struggle with self-sabotage lack clarity about their purpose. Leaders should guide their teams to identify their “why.” What drives their career goals? Why is achieving them personally meaningful?

Once the purpose is clear, define measurable objectives and a road map to success. For example, insurance agents can:

» Set short-term milestones within a broader annual plan, such as improving client retention by 15% in the next quarter.

» Visualize the impact of their goals, whether it’s achieving financial security for their families or helping clients secure peace of mind.

» Celebrate incremental wins to build momentum.

Leaders can further support their teams by implementing a 12-week-year

By breaking goals into manageable periods and tracking progress, professionals can achieve consistent wins that build confidence and fuel long-term success.

planning system. By breaking goals into manageable periods and tracking progress, professionals can achieve consistent wins that build confidence and fuel longterm success. And here’s why this works so well: It paves the way for adopting the kind of habits that separate good performers from great ones.

Cultivating peak performance habits

Insurance professionals who develop strong habits naturally cultivate confidence and success. Leaders should encourage their teams to focus on the following practices:

» Master time management. Prioritize revenue-generating activities, such as client meetings and prospecting, by blocking focused time on their calendar. Consistency in these activities builds trust and ensures long-term results.

» Strengthen client relationships. Take proactive steps to nurture trust with clients. This includes regularly checking in, seeking feedback and showing genuine care for their needs.

» Meet commitments. Reliability is crucial in the insurance industry. Trust is built by consistently following through on promises. Leverage tools such as customer relationship management systems to stay organized and on schedule.

» Seek continuous improvement. Build a culture of learning. Whether through mentorship, peer accountability groups or professional development courses, insurance professionals should always strive to refine their craft.

Inspiring excellence through leadership

Sales leaders play a pivotal role in shaping their team’s mindset and behavior. By modeling positivity, resilience and a commitment to self-improvement, leaders inspire their teams to follow suit. Create an environment where vulnerability is accepted and challenges are viewed as opportunities for growth. This is essential because it not only transforms individuals but also paves the way for a cohesive and high-performing team.

A path to growth and confidence

Overcoming negative self-talk isn’t an overnight process. It requires patience, intentionality and consistency. By taking ownership of their mindset, replacing negativity with positivity, and adopting habits of high achievers, insurance professionals can overcome self-sabotage and thrive in their careers.

For insurance sales leaders, the impact goes beyond individual success. Empowering your teams to break free from self-sabotage fosters higher morale, improved collaboration and stronger results across the board.

Remember: Confidence isn’t built in a day, but the journey to self-belief starts with one intentional step. Let today be that step.

Casey Cunningham is the CEO and founder of XINNIX. Contact her at casey.cunningham@ innfeedback.com.

the Know In-depth discussions with industry experts

Premium financing:

A two-edged sword?

In the right hands, premium financing is a powerful tool; misused, it’s led to dozens of major lawsuits and financial losses.

By Doug Bailey

Looking back on it, Robert Berman must concede there were signs that the deal his insurance broker and advisor was touting probably wasn’t on the up and up. The broker, Thomas Rapp, allegedly told Berman that he could buy a $10 million indexed universal life insurance policy and pay the $700,000 in annual premiums with proceeds from a loan. The loan would be invested and earn 10% to 12% a year, enough to pay both the interest on the loan and the insurance premiums with maybe even some cash left over. Beautiful.

Rapp repeatedly told Berman that they would borrow money at a low interest rate (2.5%) and use it to earn 10% to 12%, according to court documents. Rapp wrote to Berman “… so if we buy it and get 15%, you get 15% tax free and not give 7% of it to the f---- IRS. …”

When presented with documents detailing the finer points of the transaction, called premium financing, Berman admitted he barely understood a word of it. He claims he asked Rapp to explain it all but never got a complete answer.

Nevertheless, he went ahead with the deal, even after getting cold feet at one point and asking out of the transaction, but he was convinced by Rapp and an associate to continue.

“There are probably only 10 people who know how to do this strategy correctly, and we’re at the top of the list by far,” Rapp allegedly told Berman.

Things went south in a hurry. The total line of credit was exhausted after only the first year of premium payment, leaving no money for future premium payments, according to Berman’s complaint. He claims he suffered a loss of nearly $1.3 million, and he has taken Rapp and his associate to court along with the insurance companies and banks that were involved in the transaction.

Berman’s case may seem unique but actually the courts are becoming clogged with dozens of similar cases accusing brokers and advisors of misrepresentation and even fraud in connection with premium financing plans. While some of the agents and advisors may seem a bit suspect on the surface, the cases are dragging along with them top insurers and

banks, including Lincoln National, Pacific Life, Penn Mutual, Mass Mutual and New York Life, all of which have been named as defendants in the burgeoning cases.

The piling up of lawsuits has some people questioning whether premium financing is ever a legitimate investment or buying opportunity and not just some complex scheme to generate huge commissions for agents, brokers and insurers.

“I have debated different experts on this subject,” said Larry Rybka, chairman and CEO of Valmark Financial Group, an independent broker-dealer and financial services company in Akron, Ohio. “I’ve done three big industry debates at the Forum 400, and I have offered $1,000 to people I’m debating to show me one that’s working — not what you say you’re going to do, but show me one that worked. I’ve still got the $1,000 in my pocket.”

Rybka, who is often asked to be an expert witness in premium financing lawsuits, takes an admittedly extreme position on the topic.

“The only time premium financing works is when the client dies early,” he said. Yet the product remains a strong and presumably profitable one for life insurers.

Premium financing ‘can be a valuable tool’

“Premium financing can be a valuable tool for high net worth individuals who need life insurance but don’t want to tie up capital,” reads a page on Lincoln Financial’s website.

Comerica says that with premium financing one can borrow up to 95% of premium costs of a life insurance policy, take advantage of “financial arbitrage opportunities” and pay back the loan with flexible options.

“Premium finance is very attractive for healthy insured’s,” [sic] advertises National Life Group. But it also includes this disclaimer: “This business strategy is offered and managed by an independent third party who is not affiliated with the companies of National Life Group. No National Life Group company nor anyone acting on its behalf has evaluated the strategy or is authorized to make any representation regarding the suitability, effectiveness, or legality of this strategy, or the suitability of using life insurance or annuities in connection with this strategy.”

The insurer is bound only by the terms of the life insurance contracts issued by the group insurance companies, not the loans, National Life Group says, which is precisely the point at issue in most, if not all, of the lawsuits.

“That is what the litigation ultimately must prove,” Rybka says. “And there are dozens like this.”

Premium financing obviously has advocates and has become popular among business owners and entrepreneurs who want to maintain financial flexibility and not have to sell off assets to get the insurance coverage they need.

However, some compare the strategy to esoteric and risky techniques such as naked short selling or collateralized debt obligations. It does not have to be that way, say others.

‘It’s been made overcomplicated’

“It’s been made overcomplicated,” said John Reed, president of Premium Finance Life Insurance, which, as his company name suggests, specializes in the strategy. “It is really just as simple as a life insurance policy and a third-party loan to fund it. That’s it.”

Reed compares it to a commercial real estate investment.

“If you were a high net worth investor and you were going to buy a commercial strip, you’re going to buy a few buildings, you’re going to hire several people,” he said. “You’re going to hire someone to help you go find the asset you need, and you’re going to hire somebody to go find the money to build it or buy it.”

Indeed, a common scenario in many of the pending lawsuits is that the alleged victim seemed to have relied solely on the agent or advisor selling the strategy and did not seek counsel from attorneys or other financial experts.

“Like any financial tool, it can be misused or misunderstood,” said Paul Carlson, managing partner of Law Firm Velocity, which helps law firms control cash, develop financial road maps and understand financial performance. “In a sense, it is a wealth and liquidity management tool. As a policyholder, you get to scale up your insurance policy value by borrowing a significant portion of the premium. The idea here is that you can secure a hefty policy without having to

cough up all that cash up front. Instead, you take out a loan, and the policy itself often acts as collateral. Also, if the policy return is greater than the loan interest, you profit from the difference.”

Some collateral now required

Already though, he notes, the volume of lawsuits has led to a decline of nonrecourse premium financing. Most premium financing now requires some form of collateral beyond just the policy itself, he says.

So, which is it for premium financing? Smart strategy or scam?

“It’s a mixed bag,” says Nick Schrader, owner of Texas General Insurance. “It allows individuals to borrow funds to cover insurance premiums. But here’s the catch: interest rates can spike, turning a ‘cheap’ loan into a financial drain. If the insurance policy’s returns underperform, you might owe more than the policy’s worth — forcing you to add collateral or default. Some lawsuits stem from advisors overselling benefits while downplaying these risks.”

Schrader compares premium financing to a powerful tool, like a chain saw — beneficial in expert hands, deadly otherwise.

“Success depends on crystal clear terms, conservative estimates and backup plans — such as selling assets in the event that rates surge,” he says. “For most? Too complicated. But for high-end clients with advisors who are experts in niche strategies — not mere generic agents — it’s a legitimate means of managing coverage and liquidity. Just walk carefully, as those low rate guarantees can cover up sinkholes.”

Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors, in El Segundo, Calif., says in the right hands and for the right client, premium financing can be a powerful and valuable tool.

“However, it is not like an avocado that can be spread for almost everyone on nearly anything to improve taste and texture,” he says. “Premium financing requires careful consideration of client circumstances, risk tolerance and long-term financial objectives. It can make sense as an alternative method of funding life insurance premiums from a commercial lender as opposed to paying them out of pocket, especially if you or your client has a better use for that capital. In other

words, it is an effective cutting-edge tool in specific situations where the benefits clearly outweigh the complexities and potential risks involved.”

Strategy requires thorough analyses

However, he adds, this strategy requires thorough analyses of interest rate projections, collateral requirements and policy performance to ensure sustainable longterm value.

“The optimal application is typically for high net worth individuals with substantial insurance needs and sophisticated financial planning requirements,” he says.

How liable an insurance provider is in these deals if things go sour and don’t live up to the promises made by the agent or broker is what’s at stake in a key premium financing case soon to go to trial in New York. Most of the cases allege insurers failed to properly monitor or oversee the transactions.

Ester and Baruch Aronson accuse Brave Strategies LLC, along with Penn Mutual Life Insurance Co., MassMutual Life Insurance Co. and New York Life Insurance Co., of misleading them into purchasing high-value life insurance policies with a combined death benefit exceeding $150 million, financed through premium loans. They claim they were assured that out-ofpocket expenses would be minimal and that policy dividends would cover loan interest payments. However, rising interest rates led to increased collateral demands and higher payments, resulting in damages exceeding $1 million. The case also tests New York’s Regulation 187, which mandates that insurance brokers act in the best interest of their clients.

“I think the most damning fact pattern is one where the carrier issues a policy with a premium of almost $1.5 million to a guy who makes $250,000 pretax,” says Rybka. “Also, the company software shows the loan being repaid from the death benefit. I think a jury would find the company liable for cases like this.”

Doug Bailey is a journalist and freelance writer who lives outside Boston. He can be reached at doug.bailey@ innfeedback.com.

The three components of financial wellness

These components make up the framework for helping your clients achieve their goals.

By Deb Dupont

Financial wellness is the crux of your business. As a financial advi sor, your goal is to help your clients achieve that elusive, often ill-de fined but undoubtedly happy state. What is financial wellness? LIMRA has a definition that accommodates the different goals and needs of consumers and workers — the ideal financial situation is not the same for everyone. The LIMRA Financial Wellness Index defines financial wellness as having three main components:

» An emotional element of being con fident in your situation and having knowledge about how to get where you need to go.

» An objective/current component of being able to meet daily obligations, withstand unexpected expense and hopefully enjoy the extras that can come with financial security.

» A future-looking aspect of being able to plan and act in order to build a financially secure future including but not limited to retirement.

For financial advisors, whether focusing on retail or workplace (or both), this definition offers a framework for helping your clients. And your clients agree. About two-thirds of consumers agree with the statement “Professional financial advice is necessary for good financial wellness,” while only about 16% disagree. According to LIMRA’s Financial Wellness Survey, full-time workers (especially those who are self-employed), older consumers and those with incomes of more than $100,000 are the most likely to feel strongly about the necessity of professional advice.

curity (wellness) for most consumers begins with a paycheck. And the workplace is a natural delivery location for wellness products (payroll-deduction insurance and financial services) and education. According to the research, two-thirds of workers say that “employers should offer services to help address/reduce employees’ financial stress.”

But those most likely to strongly agree represent a different demographic than those who feel strongly that advisors are necessary for wellness. Younger and middle-income workers are somewhat more likely to turn to employers to provide these services, and are also for those workers whom scalable, more technology-enabled solutions may be more appropriate than more time- and labor-intensive personal consulting.

Furthering the case for workplace wellness efforts is the fact that many (nearly 7 in 10) employees consider workplace benefits integral to their financial wellness. While our research shows that fewer than half of consumers consider that they have adequate

grams or support at work.

There is a role for both financial advisors and the workplace in helping clients build and maintain financial wellness. Figure out where you add value, and leverage what may be available in your clients’ workplaces in ways that complement your own offerings.

Support your business owner and business decision-maker clients in their efforts to facilitate employee financial wellness — or bring wellness to the table as a part of your own value proposition to these clients. By encompassing products, education, services and more, financial wellness efforts in the workplace can become an important part of your own services for your business clients.

Deb Dupont is assistant vice president, workplace benefits research, institutional retirement, LIMRA and LOMA. Contact her at deb.dupont@innfeedback.com.

Why expanding access to financial planning is crucial

We must be willing to explore adding additional compensation models to increase financial planning’s accessibility and the peace of mind it provides.

By Paul Brahim

When people work with a fitness trainer, they expect a workout tailored to their abilities and goals. Similarly, when they work with an architect to design a new home, they expect the plans to reflect their vision for the home and their personal financial capabilities for building it.

Similar expectations apply when working with a financial professional. As unique as each person’s financial situation and goals are, they deserve — and should expect — a financial professional to deliver services, strategies and recommendations tailored to their specific circumstances and priorities.

Everyone desires the means to live a financially secure life while achieving their goals. Many variables must factor into determining the best way to reach those goals. Given how much these factors can vary from individual to individual, a personalized approach to financial planning is far more likely to lead to positive outcomes, both now and in the future.

The problem today is that these critical financial planning services are largely reserved for those accumulating sizable assets. This is due to the prevalence of professionals being paid exclusively through assets under management or assets under advisement, which naturally reduces the availability of these services to those without significant assets.

I want to be clear that there is nothing wrong with charging fees or earning commissions based on assets. But if the profession is going to be more welcoming and inclusive, we must be willing to explore additional compensation models to

increase financial planning’s accessibility and the peace of mind it provides.

We all have seen the studies and research that say financial health is as important as physical and mental health. This is why financial planning is so important, yet it seems inaccessible to those who need it.

Financial planning isn’t only for the wealthy. It’s a vital service that should be accessible to every American, regardless of their current asset levels. In short, financial planning should be comprehensive and not just about investments.

What to do about it

Consider offering alternative fee models, such as subscription, fixed fee and hourly, for your financial planning services. These models expand access due to their flexibility and lower cost barriers. Implementing alternative models can also attract a more diverse range of clients, including young business owners and emerging entrepreneurs who are on the cusp of building wealth through business liquidity events.

The Financial Planning Association is compensation-neutral and business model-agnostic because we believe financial planning can be delivered effectively through all models. If those professionals offering financial planning services are CFP professionals, the way they are compensated shouldn’t matter — except to the consumer. I offer these specific models only as potential pathways to increase access so more people can enjoy and benefit from the important work financial planners do.

Subscription models

From digital music and movies to clothing, meals, cosmetics and even automobiles, there’s a subscription service for many of today’s most in-demand products and services. And now, there are subscription services through which consumers can access professional financial planning expertise and guidance.

Subscription-based financial planning services are designed for people who prefer to pay a modest monthly fee to incrementally receive professional financial advice via a simple, fixed-cost package, with the opportunity to add “a la carte” products and services. Although subscriptions are not for everyone, they appeal to people who value flexibility, access, lower costs, and ongoing advice.

Fixed-fee hourly models

Fixed-fee hourly models allow clients to pay only for the specific time they need without committing to larger, ongoing fees that might not align with their current financial situation. This type of arrangement can particularly benefit those who may not require comprehensive, ongoing management but still desire guidance on specific financial matters, such as budgeting or retirement planning.

Clients can focus on specific areas of concern and receive actionable advice without the pressure of an ongoing agreement.

There is no one right model for every financial professional and consumer. At the end of the day, it is up to you to decide if expanding access to your services through alternative models is something you want to embrace and, ultimately, implement.

Financial planning should be considered an essential service, like health care or education, focused on promoting financial well-being rather than only a means of managing assets. By increasing accessibility, we can position financial planning as a powerful tool for achieving peace of mind and improved financial wellness.

Paul Brahim, CFP, CEPA, is the 2025 president of the Financial Planning Association and is a managing director and financial advisor with Wealth Enhancement Group in Pittsburgh, Pa. Contact him at paul. brahim@innfeedback.com.

State advocacy in 2025: Navigating new challenges and opportunities

With the presidential and congressional elections out of the way, it’s time to look at state legislative and regulatory activity that impacts the financial services profession.

By Melissa Bova

Following a presidential election, it as though all of the air is taken out of the room with discussions around the Tax Cuts and Jobs Act expiration, the Department of Government Efficiency and a federal Republican trifecta. But do not discount or ignore all of the current and potential activity we will see at the state level in 2025.

To understand what’s ahead, we must first reflect on the key outcomes of the 2024 state elections. While Republicans held all 23 of their current trifectas (meaning one party controls the General Assembly, the Senate and the governor’s office), Democrats saw two trifecta states (Minnesota and Michigan) return to divided government after holding their previous trifecta status for only two years. Further, some ballot initiatives gave us some insight into what to expect in the future on a couple of fronts — taxes and long-term care.

We began 2025 with virtually every state legislature in session and each of the legislators in those states as far from reelection as possible — which is why the first year after a large election is when we expect to see the most activity. Let’s look at what is keeping the state advocacy team at Finseca up at night.

Budgets

There is one glaringly significant difference (well, actually a few, but we will focus on one today) between how states operate and how the federal government operates.

States must have a balanced budget year to year. They can’t raise the debt ceiling, and they can’t use creative accounting practices. This is why Finseca will keep a very close eye on state budget activity this year. Although the COVID-19 pandemic seems like a long time ago, states had until the end of 2024 to obligate any remaining COVID-19 relief funds. Many states used these funds to balance budgets, reduce consumer taxes or encourage business investment. Now they must find new funding sources to allow any of those items to continue. Which leads to these issues.

Taxes

States can balance budgets in any number of ways, but there are two tax concepts we will pay special attention to.

1. Wealth taxes. In 2024, six different states introduced legislation that would assess income tax on unrealized capital gains and/or net worth. Many of those same proposals from 2024 will be introduced again in 2025. So far, governors remain resistant to these proposals because they would put their states at a competitive disadvantage compared to neighboring states, but if one state takes the first step, others can follow.

2. Sales tax expansion. After seeing proposals introduced or discussed in Kentucky, Nebraska, Louisiana and Minnesota, the continued threat of assessing sales tax on financial or investment advice remains one of the most significant threats to the work this profession does daily. Finseca will continue to advocate against any tax that negatively impacts consumer access to holistic financial planning.

Standards of conduct

We will begin this year by continuing to make steady progress on the

adoption of the National Association of Insurance Commissioners Best Interest for Annuities Standard. We ended 2024 with 48 states adopting the standard, and the final two — New Jersey and the District of Columbia — should be across the finish line shortly. The NAIC standard and its wide adoption continue to demonstrate the success that can be achieved by ensuring the important balance of consumer protection while ensuring consumer access to advice.

This leads us to the only state that has not adopted the NAIC Best Interest for Annuities Standard — New York, which has adopted its own standard, Reg. 187 (Suitability and Best Interest in Life Insurance Transactions). Since the implementation of Reg. 187, data show that new policies and premiums in New York have lagged the rest of the country. Finseca has been relentless in advocating for changes to ensure that New Yorkers have access to financial advice without repetitive regulatory burdens impacting advisors. To that end, in January, the New York Department of Financial Services issued clarifications around two pain points advisors have faced since Reg. 187 took effect.

1. Simplified information for term policies. Basic term policies in New York no longer require extensive data

Finseca

collection (liabilities, assets, net worth, risk tolerance, etc.), aligning with practices in the other 49 states.

2. Streamlined training requirements. Producers are no longer required to complete duplicative Reg. 187 training for each carrier, reducing redundant hours of training.

Our work in New York is not done, though, and we will continue to push for regulatory and legislative changes that achieve the balance needed between consumer access to advice and protections.

Long-term care

Washington, the only state with a publicly funded long-term care program, had WA Cares upheld by more than 55% of the vote in November. With the program continuing for the foreseeable future, expect legislation to pass that would allow individuals who opted out of the program to opt back in, plus efforts to develop private sector solutions for coverage after the state

benefit runs out. While copycat legislation has been introduced in some states, no movement has been seen at this time, and we aren’t expecting activity in 2025. But as Medicaid budgets soar, funding for long-term care will continue to be discussed, and Finseca believes innovative private sector products can and should be part of the solution.

The overall balance between state and federal activity

Even with control of the federal government changing hands, we expect the constant balance we have become used to. Where the federal government doesn’t move, states will. Further, where blue states feel a Trump administration is moving too far to the right, they will work on the legislative and regulatory fronts to balance what they perceive to be imbalances.

Finseca’s state advocacy priorities will remain the same:

EMPOWERING AGENTS, ELEVATING COVERAGE

» Promote a holistic approach to financial security.

» Preserve and expand consumer choice.

» Adopt tax policies that inspire long-term planning.

» Foster a thriving financial security profession.

We will spend 2025 as we have every year, in partnership with our fellow joint trades (American Council of Life Insurers, National Association of Insurance and Financial Advisors, Insured Retirement Institute, and National Association for Fixed Annuities) to activate as necessary to achieve our mission of financial security for a ll.

Melissa Bova is Finseca’s senior vice president of state affairs. Contact her at melissa.bova@innfeedback.com.

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Do your clients know about IRMAA?

Make sure that a surprise doesn’t derail your client’s retirement plan.

By Ike S. Trotter

Ientered the financial services profession in 1975, and with a 50-year career under my belt, you can safely bet that I am covered by Medicare today. I started taking Social Security at age 70. While that may not be the most popular choice for many today, my hope is to live a long and meaningful life into my 90s. So, as a financial professional and a card-carrying participant in both Medicare and Social Security, I have a great deal of experience both personally and with many of my customers with these federal social insurance programs and how they fit into retirement plans.

The biggest shock many Social Security and Medicare beneficiaries face is, without question, a financial regulation called the income related monthly adjustment amount or IRMAA. IRMAA was passed into law in 2003 and enacted in 2007 and affects around 8% of individuals and couples enrolled in Medicare. The purpose of IRMAA, according to Medicare, is to ensure that wealthier beneficiaries pay higher premiums by means of a surcharge.

Additionally, in 2011, the Affordable Care Act expanded IRMAA to include Part D prescription drug coverage.

As financial professionals, we need to prepare our older clients who are likely to have significant income for IRMAA. It’s important that accounting for (or reducing) the IRMAA surcharge be part of their retirement plan.

How IRMAA works

Here’s how IRMAA comes into play: For 2025, Medicare participants pay $185 a month for their Part B Medicare coverage, which covers physicians’ fees and other outpatient medical expenses. If, however, the income on one’s federal tax returns for two years previously (through 2023) meets or exceeds $106,000 for individuals or $212,000 for joint filers, their monthly Medicare premium jumps by $74, to $259.

And it can go up and up and up. For example, if their income in 2023 was over $133,000 for single filers or $266,000 for joint filers, IRMAA’s markup will double their 2025 Medicare premiums to $370 per month. The maximum surcharge in 2025 is $480.90 for single filers making more than $200,000 or joint filers making more than $400,000. These surcharges can be significant jolts to the finances of retirees who aren’t expecting them.

Unfortunately, it doesn’t end with the Medicare Part B premium. As mentioned previously, a similar assessment applies to high-income beneficiaries enrolled in Medicare Part D, which covers prescription drugs. Furthermore, it is important to understand that the government uses a twoyear “look back” at income to determine whether your client should pay a surcharge.

If there is any saving grace here it is that IRMAA is not a lifelong sentence. It is reevaluated annually and based on tax returns from the two prior years. That means that if their income falls below the threshold, a Medicare recipient’s IRMAA can decrease or cease.

It is also vital for clients to understand that surcharges are based on one’s total income from all sources. This includes even one-half of Social Security benefits. Large, one-time financial events can also push existing Medicare recipients into a higher bracket and potentially trigger a surcharge for unsuspecting consumers.

For example, have large withdrawals been made from an individual retirement account or has a large portion of a traditional IRA moved over to a Roth? Has rental property or a house been sold recently with a sizable capital gain? What about profits made from selling land, commercial real estate, timber property or mineral rights? Is a Medicare recipient still working and drawing a sizable income? Any of these situations could subject a client to surprise IRMAA payments. As financial professionals, we need to make sure our clients are aware of the situation and that surprises don’t derail their financial plans.

IRMAA often comes as a complete surprise to older Americans, particularly those who are new to Medicare. They look to financial professionals to help them understand complex Medicare and Social Security rules, such as IRMAA. You don’t want to explain IRMAA to clients after they have taken a substantial hit. A little knowledge on the front end can go a long way.

Ike Trotter, CLU, ChFC, RICP, is a NAIFA professional located in Greenville, Miss. He is a 50-year veteran of the business and a longtime NAIFA Quality Award recipient. Contact him at ike.trotter@innfeedback.com

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