InsuranceNewsNet Magazine - November 2015 by InsuranceNewsNet

D SP O N SO R E N SECTIO

PLUS:

DAN KENNEDY’S No B.S. Guide to Advisor Success <PAGE 12>

Your clients deserve clear direction for their ﬁnancial strategy. We provide the compass.

As an advisor, you depend on trusted collaboration from a partner who has your clients’ best interests in mind and who can help you guide them toward their financial goals. Great-West Financial ® is committed to advisors and brokers who need innovative thinking for their clients. We offer insurance, retirement income, and business solutions designed to fit the demands of today.

$25.6 billion

assets under administration

Standard & Poor’s Ratings Service for ﬁnancial strength1

125

years serving customers

LE ARN MORE 800 -520 -7271 greatwest.com

Financial data as of December 31, 2014. Standard & Poor’s rating (Very strong, second highest of nine categories) is for Great-West Life & Annuity Insurance Company and is subject to change. This rating does not pertain to the investment performance of the underlying fund, other insurance affiliates or subsidiaries, or non-insurance affiliates of subsidiaries of the company. Great-West Life & Annuity Company is an indirect, wholly owned subsidiary of Great-West Lifeco Inc. A Member of the Power Financial Corporation Group of Companies®. “A Member of the Power Financial Corporation Group of Companies” is the registered mark of Power Corporation of Canada. Great-West Financial® refers to products and services provided by Great-West Life & Annuity Insurance Company (GWL&A); Great-West Life & Annuity Insurance Company of New York (GWL&A of NY), White Plains, New York; their subsidiaries and affiliates. GWL&A is not licensed to conduct business in New York. Insurance products and related services are sold in New York by its subsidiary, GWL&A of NY. The trademarks, logos, service marks, and design elements used are owned by GWL&A. ©2015 Great-West Life & Annuity Insurance Company. All rights reserved. (10/15) PT244028 FOR ADVISOR USE ONLY.

Equitable Life & Casualty IT WAS 1931 AND THE COUNTRY WAS IN THE GRIPS of what would be known as The Great Depression. A quarter of the workforce lost their jobs, and a sense of helplessness pervaded across the land. Not the best time, some would say, to start a business . . . or so it seemed.

Dr. Earl Roderick “Doc” Ross, founder, (above) and his sons, David E. Ross (below left) and Raymond R. Ross (below right).

During the Depression, it became increasingly difficult for Utah families to meet the expenses associated with the death of a family member. Many surrendered their life insurance policies – every penny counted in surviving through incredibly hard times. Too many Utah families were left with the burden of burial and final expenses, without the means to pay. Enter Dr. Roderick Earl “Doc” Ross, the founder of Equitable Life & Casualty. As a young man Doc was a discerning entrepreneur. He recognized the need for an affordable way to help families through times of bereavement, committed himself to action and set out to organize a mutual aid association, also known as a benevolent society, composed of 500 to 2,000 people who each agreed to contribute $1 in the event of the death of any of its members. In 1931 Doc’s objective became a reality with organization of The Wasatch and Summit County Benevolent Society.

▲ The historic Eagle’s Lodge Building was Equitable’s home from 1948-1983.

In 1933, Doc organized the Community Mutual Aid Society of West Salt Lake County to serve a larger, more populated area. He convinced local banks to collect the dollar from each of the members. Membership cards were issued. Members would go to the bank and make their $1 contribution to the family of a deceased member. The bank would act as depository, free of charge. On June 6, 1935, Doc incorporated Community Mutual under the name of Equitable Mutual Aid Protective Society, with its Home Office located in the heart of Salt Lake City. Earlier that same year, the Utah legislature passed a bill that placed benevolent organizations under the jurisdiction of the state insurance commissioner. From these humble beginnings, Equitable Life & Casualty was born.

▲ The first Equitable agent gathering in Salt Lake in 1958.

served as Assistant General Manager and Director of Agencies, recruiting, developing, and managing an independent agent sales force until 1977. Dave was the Secretary and Treasurer and helped in managing the Home Office until 1978. Doc, as President, zestfully managed Equitable through his mid-70s. Both Dave’s and Ray’s children became integral to Equitable’s management team. Ray’s son, Raymond Earl Ross, served the company for 40 years, becoming Chairman & Vice President in 1987. Upon his retirement in 1997, Earl was named Chairman Emeritus. Earl’s four sisters also held various positions within the company and served Equitable until their retirement in 1997. Today, Doc’s grandson and Dave’s son, Earl Roderick “Rod” Ross is Equitable’s owner. With over 40 years working experience with the company, Rod is committed to Equitable’s future: “I’m proud to carry my grandfather’s legacy into the future. Equitable remains dedicated to our pioneering vision of helping senior Americans and their families live happier and more financially secure lives.” The company offers Medicare Supplement, final expense life, hospital indemnity, cancer care and short-term care insurance products. Equitable is licensed to conduct business in 45 states and is the oldest active life insurance company domiciled in Utah, serving many thousands of policyowners and agents. The company’s Home Office, located in Salt Lake City, employs 170 people dedicated to providing superior, friendly personalized service to policyowners, business partners and the 12,000 independent professional agents who market Equitable’s insurance products across the United States.

Equitable was a family run business and Doc welcomed his sons Dave and Ray into it. Ray

Over the years, the Equitable look may have changed, but the legacy

– An 80 Year Success Story The Value of Independent Agents

From its very beginning Equitable has been a proud supporter and tireless advocate of the independent agency system as the preferred distribution channel for its business. In the early years, the “agents” that sold memberships to Doc Ross’ mutual aid societies for $1 earned that amount as their commissions, and on a good day could earn up to $10. It became evident quite quickly that agents were the best distribution channel for the sale of Equitable’s products. Ray Ross was responsible for building an agent field force during the company’s formative years and those that have followed in Ray’s footsteps as agency leaders have continued to recruit top-notch sales professionals. Historically, Equitable has provided opportunities and assistance to agents who want to establish and grow an agency devoted primarily to producing Equitable business and to existing agencies who desire to do the same. In turn, these agencies have acted as if they were captive to Equitable, due primarily to the nurturing provided by the company’s Home Office team. A core group of managing general agents constituted EquiPAC – Equitable’s Premier Agency Council. This select group provided invaluable input on product development, underwriting and agent relations. Through advancements in technology, agent onboarding, from an invitation to contract to filing state appointments, is done electronically. What used to take days, sometimes weeks, to contract and appoint an agent, now takes about 30 minutes. A dedicated password protected secure website designed exclusively for agents gives real time information on the status of pending applications, claims, commissions, company directives, and product training, along with articles and links to topics of interest. A proprietary Online Express Application process allows an agent to assist their clients in applying for a policy and receiving an underwriting decision, all in about 15 minutes.

▲ Equitable’s Premier Agency Council (EquiPAC), 2000.

The 2015 Equitable Board of Directors: (standing) Kendall Surfass, Rod Ross, Bill Prouty, (seated) Lynn DeBry, Bill Adams, Marilyn Froelich and Gil Rohde.

Today, Equitable has some 12,000 independent agents in its field force, located all across the country. Independent professional agents have been the lifeblood of Equitable’s business, and critical to the Company’s continued success. From the start, Equitable has never wavered from that focus. For more information about Equitable, its products and services, or how to become an Equitable agent, please contact 844-670-6945 and visit our website at www.EquiLife.com.

▲ Equitable’s Home Office in the Triad Center in downtown Salt Lake City since 1992.

remains the same . . . To do well, by doing good . . . because We Care! ® ®

Equitable & You . . . Committed To Caring

Equitable

Equitable Life & Casualty Insurance Company

3 Triad Center, Salt Lake City Utah 84180-1200

IN THIS ISSUE

View and share the articles from this month’s issue

» read it

online

www.insurancenewsnetmagazine.com

NOVEMBER 2015 » VOLUME 8, NUMBER 11

ANNUITY

58 C arriers Compete with Complexity, Leading to ‘Arms Race’ Concerns By Linda Koco As carriers introduce more products and more features into the marketplace, some wonder where it will end.

62 R esearch Suggests QLACs Are Critical Piece Of Retirement Puzzle By Linda Koco Predictions point to a bigger role for longevity annuities as more people will need to plan for an income stream much later in life.

24 INFRONT

10 ACA Pushes Industry Toward Life/ Annuity Track

66 FEATURE

24 Cracking the Code to Online Success

By Linda Koco The arrival of the Affordable Care Act (ACA) has nudged along a shift in thinking about lines of business.

By Steven A. Morelli How advisors are making the most of search engine optimization to bring clients their way via the Web.

35 The Tech Guide: Special Sponsored Section

In this year’s technology showcase, witness the many ways our industry’s latest tech provides solutions to problems both old and new.

HEALTH

66 W hat to Look for When Selecting a Private Exchange By Chris Duncan A private exchange is not a magic bullet but it could be the right option for some of your employer clients. Here’s how to find the best solution for your client.

LIFE

50 How to Get Millennial-Ready To Bridge The Talent Gap By Gayle O’Connell As an increasing number of insurance professionals continue to age out of the workforce, academic institutions and businesses must work together to develop the future of the industry.

INTERVIEW

12 Dan Kennedy’s No B.S. Guide to Advisor Success An interview with Dan Kennedy Marketing and advertising remain stuck in the 1950s, according to Dan Kennedy. Known as the Professor of Harsh Reality, Kennedy is famous for his blunt but rock-solid advice on what does and does not work in the way of marketing. In an interview with InsuranceNewsNet Publisher Paul Feldman, Kennedy describes how to shake up your marketing efforts and dazzle your prospects. 4

52 How Today’s Accelerated Benefit Riders Can Fund Tomorrow’s Care

InsuranceNewsNet Magazine » November 2015

By Steve Schoonveld Flexible benefits offset the “use it or lose it” risk of traditional long-term care insurance.

FINANCIAL

72 How to Go Under the Surface to Find Wealth in Your Backyard By Bryce Sanders Just because a prospect doesn’t appear to be wealthy doesn’t mean they have no money. Here is how to uncover the hidden wealth where you least expect to find it.

A WHOLE LIFE INDEX-LINKED FEATURE. It might just be genius.

It’s definitely the next generation of life insurance. n

Whole Life Guarantees

Guardian’s new Index Participation Feature (IPF), is about to reinvent whole life – and add a new dimension of cash value growth potential for your clients. Now they can link up to 100% of the cash value of paid-up additions on select policies to the performance of an index – at a competitive cap – while the floor and policy’s inherent guarantees offer additional downside protection from stock market volatility. IPF is a patent-pending whole life rider innovation only from Guardian, a mutual company.

Index-Powered Upside Potential

Producers, please visit:

Greater Flexibility

NextGenWholeLife.com/InsuranceNewsNet

The Guardian Life Insurance Company of America New York, NY 10004-4025

For Producer Use Only – this advertisement is not intended to be used in the sale of life insurance. All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. The Index Participation Feature (IPF) is a rider available with select Guardian participating whole life polices. IPF provides an adjustment to the dividend paid under the policy. This adjustment, subject to the cap, participation rate and floor, may be positive or negative based on index performance. Adverse market performance can create negative dividend adjustments, which may cause lower overall cash values than would otherwise have accrued had IPF not been selected. Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors. Riders may incur an additional cost. Rider benefits may not be available in all states. Rider Form Number: 15 IPR. 2015-9597 (Exp. 08/17)

DISCOVER HOW ONE FINANCIAL PROFESSIONAL WROTE

$5,000,000

ALSO IN THIS ISSUE NOVEMBER 2015 » VOLUME 8, NUMBER 11

IN 50 DAYS!

By Sheila Runkel Leadership, persistence, knowledge and empathy are the hallmarks of a good solder, as well as a good financial planner.

BUSINESS

76 The Experience Trap: How Your Selling Process Can Kill Sales By Jeff Spain When you spend too much time focusing on your sales presentation, you risk losing the sale.

INSIGHTS Get access to field-tested strategies to help you close more sales and increase your practice’s profit. One of our financial professionals, Brian W. out of Austin, TX has adopted this Income Allocation model in his business and in the past 50 days he has written over $5M in production.

To get FREE instant access to the EXACT Income Allocation Model Brian followed, visit:

IncomeAllocationU.com

For financial professional use only – not for use with consumers. Success rate based on actual results. Results may vary and are not guaranteed.

80 T HE AMERICAN COLLEGE: Ex-Soldiers Learn To Be Financial Heroes To Clients

78 M DRT: Give Clients A Seamless Customer Experience By Ryan J. Pinney It may seem as though technology is taking over the sales process, but there is still room for an individual agent.

82 N AIFA: NAIFA Fights for Workable Rule By Judi Carsrud The association is working to make sure that middle-income investors are not hurt by the Department of Labor’s proposed fiduciary rule.

84 LIMRA: Robo-Advisors: Threat or Opportunity? By Scott Kallenbach and Konrad Wisniewski What insurance professionals don’t know (and don’t want to know) about roboadvisors can hurt them.

EVERY ISSUE 8 Editor’s Letter 22 NewsWires

48 LifeWires 56 AnnuityWires

64 HealthWires 70 FinancialWires

INSURANCENEWSNET.COM, INC.

3500 Market Street, Suite 202, Camp Hill, PA 17011 tel: 866-707-6786 fax: 866-381-8630 www.InsuranceNewsNet.com PUBLISHER Paul Feldman EDITOR-IN-CHIEF Steven A. Morelli MANAGING EDITOR Susan Rupe EDITOR-AT-LARGE Linda Koco SENIOR EDITOR John Hilton SENIOR WRITER Cyril Tuohy VP FINANCES AND OPERATIONS David Kefford PRODUCTION EDITOR Natasha Clague VP MARKETING Katie Hyp CREATIVE STRATEGIST Christina I. Keith AD COPYWRITER John Muscarello CREATIVE DIRECTOR Jake Haas

GRAPHIC DESIGNER GRAPHIC DESIGNER ADVERTISING COORDINATOR TECHNOLOGY DIRECTOR WEB DESIGNER REGIONAL ACCOUNT MANAGER (NORTHEAST) REGIONAL ACCOUNT MANAGER (CENTRAL) REGIONAL ACCOUNT MANAGER (SOUTHEAST) REGIONAL ACCOUNT MANAGER (WEST) SALES RELATIONSHIP COORDINATOR

Copyright 2015 InsuranceNewsNet.com. All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail editor@insurancenewsnet.com, send your letter to 3500 Market Street, Suite 202, Camp Hill, PA 17011, fax 866-381-8630 or call 866-707-6786. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 866-707-6786, Ext. 115, or reprints@insurancenewsnet.com. Editorial Inquiries: You may e-mail editor@insurancenewsnet.com or call 866-707-6786, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to www.innmediakit.com or call 866-707-6786, Ext. 115, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 3500 Market Street, Suite 202, Camp Hill, PA 17011. Please allow four weeks for completion of changes.

Bernard Uhden Shawn McMillion Sharon Brtalik Joaquin Tuazon Kevin Crider Tim Mader Craig Clynes Brian Henderson Emily Cramer Ashley McHugh

Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects in, or untimeliness or inauthenticity of, the information published herein.

Turn Retirement Saving into… Retirement Income.

American Equity - The Company to Turn to for Guaranteed Lifetime Income. 

Competitive Payout



Six Lifetime Income Benefit Options



No Fee Option

The one who works for you! 6000 Westown Pkwy, West Des Moines, IA 50266 | life.american-equity.com | 888-647-1371 FOR AGENT USE ONLY. NOT FOR USE IN SOLICITATION OR ADVERTISING TO THE PUBLIC.

15 INN 11.15

WELCOME LETTER FROM THE EDITOR

www.aaarrrrrgh!.com

“I

’m on the Internet. Now where is all the business I’m supposed to be getting?” That question inspired the annual technology feature for this magazine. In our previous tech editions, we focused on the how — for example, how to go paperless and how to go virtual. But what I heard from some advisors is that it is tough out there on the Internet. After spending time and money to develop a website and market it, they have zilch to show for it. The solution goes back to the root of technology. The word itself does not mean the technical stuff, such as computers, but it is knowledge, the “ology” part of the equation. It’s how you build it and then what you do with it. Here is the good news: You know how to do this already. At least the second half of the process. The first half is the content. Agents and advisors who have gone online might have content at this point, which is a good start. But many advisors probably look at the word “content” with all the joy reserved for colonoscopies. You know you have to do it, but how about next month? Maybe next year? Like a colonoscopy, waiting is not the healthy choice for getting online and building 8

content. Advisors who do dawdle might find the community and niche they created in the real world occupied by someone else in the virtual one by the time they get there. Unlike a colonoscopy, content can be fun and even easy. Chris Huntley, one of the advisors featured in the main article, built an impressive bank of 500 articles on his website, which propelled his business. He started simply by taking his notes on tough cases and converting them to articles. Here is something Huntley did besides building a large database — he learned how his own business works. He identified what niche was natural to him by focusing on the work he already was doing for clients. Huntley also absorbed the lessons he drew from each tough case. The best way to put an experience into context is to write about it. It’s the same reason journaling is a popular way to appreciate a person’s own life. This specialized content is gold on the Internet. It always has been, but its stock is soaring these days because of changes in Google’s algorithms. This means the search engine’s guardians are constantly refining results to outmaneuver people who game the system. Over most of this year, Google rolled out the latest version of the algorithm Panda, which knocked many of the big players down

InsuranceNewsNet Magazine » November 2015

a few pegs. It also elevated smaller sites with local content. Some of those who lost out in the latest update were posting content they cut-npasted from somewhere else and relied on fake linking strategies. This is an opportunity for the meek to run out and inherit the World Wide Web. Of course, just parking great content on a site is not going to get traffic. The solution is essentially an extension of the prospecting that successful advisors do. Salespeople already know that having the best product in the world means nothing if no one knows about it. It’s part of networking. Say an advisor attending a community event meets a business owner who has three children he wants to pass his business on to. If the advisor happened to write about a similar situation that was solved with a life insurance strategy, wouldn’t that advisor seem to be a very handy expert if he or she forwarded that article to the owner? Also, if an advisor wrote about how breast cancer survivors can still get affordable life insurance, wouldn’t it be a public service to send a link to the local breast cancer awareness group? That is the idea with getting real links to content. Google has become more adept at recognizing when real groups link to content that is of genuine interest to them. The search engine wants what everybody else wants: real answers to questions. Much of Google’s work on algorithms is to secure top spots for good content. In fact, some articles that Huntley wrote five or more years ago are still ranking No. 1 in some searches. That is despite a few Google updates that shook up the rest of the world relying on search engine traffic. This is all bad news for people who figured they could buy cheap, generic content and then purchase a bushel of links from a link farm. It is great news for people who want to bring real value to others. So, the path to becoming an effective Internet marketer follows routes similar to any lasting success, by orienting toward the points of ingenuity and integrity. After all, if you head toward cheap, vapid and sleazy, that is where you will end up. Steven A. Morelli Editor-In-Chief

We’ve worked hard to become a stronger partner for you. Your business demands attention like never before, so we’ve beefed up to be more aligned with your needs. Our Broker Sales Professionals are now 100% dedicated, trained and accountable for working side-by-side with brokers like you to provide the solutions you expect. And brokers across the nation rely on the support of our nearly 350 on-site benefits consultants. We’ve listened, and we’re committed to being a stronger partner who helps you provide the best value for your clients. Because good partners don’t just look out for each other, they look to each other in order to succeed. Visit Aflac.com/broker to learn more.

Critical Illness

Accident

Hospital

One Day PaySM available for most properly documented, individual claims submitted online through Aflac SmartClaim® by 3 PM ET. Aflac SmartClaim® not available on the following: Short-Term Disability (excluding Accident and Sickness Riders), Life, Vision, Dental, Medicare Supplement, Long-Term Care/Home Health Care, Aflac Plus Rider and Group policies. Processing time is based on business days after all required documentation needed to render a decision is received and no further validation and/or research is required. Individual Company Statistic, 2015. Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. Worldwide Headquarters | 1932 Wynnton Road | Columbus, GA 31999 N150138A

7/15

INFRONT TIMELY ISSUES THAT MATTER TO YOU

ACA Pushes Industry Toward Life/Annuity Track I t seems as if the life and annuity business is moving along one path, and the health insurance business is moving along another. Here is a look at how this is playing out. By Linda Koco

here was a time not long ago when the life and annuity (L&A) industry had another moniker. It was known as “the life and health (L&H) insurance industry.” The words still hold sway in some quarters, but they are no longer in general parlance as they once were. Ten or 15 years ago, almost everyone used the term “L&H” to describe this side of the industry. L&H encompassed life, health, annuities, long-term care, disability, accident and many other types of coverage. But significant changes have occurred since then. It’s as if the L&A business is moving along one set of tracks, and the health insurance business is moving along another set, with crossovers at key points, such as retirement. Here is a look at how this is playing out.

Health Insurance

One of the tributaries of this change stems from the health insurance sector. This sector increasingly is being viewed as an industry unto itself. Health insurance is still part of the insurance industry, and insurance producers still sell health coverage. But those who specialize in individual life insurance and annuities often view health insurance as a specialty. As a result, many life and annuity professionals are just as likely to partner up with health insurance professionals to handle their agencies’ health insurance business as they are to write the business themselves. This shift is hard to miss. Business cards, e-signatures, websites and introductions for life and annuity professionals frequently use life and annuity spe10

cialist descriptors. In another era, many would have said “life and health.” This change has occurred at the group insurance level as well. Early signs began to surface during the 2001 recession when employers began revamping their group insurance programs to achieve cost savings. Some placed group health on its own track and group life on another. In response, brokers downplayed their “group life and health” combined offerings, and started presenting new combos — group life and disability, for example. As the baby-boom generation moved closer to retirement, many did another refresh, with the focus on group life and retirement benefits. Group L&H programs did not vanish, but they took their place on a list of many “benefit offerings,” both group and voluntary, sold in the workplace. Evidence of this change can be seen in the annual financial reports that carriers file with the National Association of Insurance Commissioners (NAIC). Most health carriers now submit reports on forms designed for the health insurance industry, said Terrence Martin, head of life, annuity and health research for Conning. It used to be that they reported on the same forms (called “blue books”) that the life carriers used, Martin said. Some health insurers do still use the blue books for reporting certain business, he added, but the trend is definitely in the other direction.

Role of the ACA

The arrival of the Affordable Care Act (ACA) has nudged along the shift in thinking about lines of business,

InsuranceNewsNet Magazine » November 2015

according to Sheryl Moore, president and CEO of Wink Inc. “Health insurance has become so complicated that agents really have to be experts to sell it,” Moore told InsuranceNewsNet. As a result, agencies that previously dealt with health insurance on a limited basis have gravitated more toward life and annuities, which also require a lot of expertise. Meanwhile, Moore said that she has noticed that “some — but not all — agents” who previously sold a lot of health insurance have begun selling more life and annuities, post-ACA. So the health insurance law is still reconfiguring market alignments.

So you need E&O insurance?

ACA PUSHES INDUSTRY TOWARD LIFE/ANNUITY TRACK INFRONT

Retirement

The other major trend impacting this realignment is retirement. With the fast-approaching retirement of the baby boomers, the industry has pushed ever harder to develop products and services to meet this generation’s retirement needs. For health insurance, Medicare and Medicare supplement dominate this segment of the market, with the health carriers running the supplemental books and health agents often facilitating signups, transfers and so on. No big changes there. Where retirement income is concerned, though, the L&A language and focus really have flowered. Especially after the 2008 recession, the retirement wing of the industry has concentrated on launching products and strategies to help people create income streams for their later years. Annuities and life insurance have figured prominently in this. Life insurance is still sold for death benefit protection, said Mike Vaughan, assistant vice president-individual products and solutions, at Nationwide. But death benefit is no longer the only focus. Over the years, the industry has shaped its life insurance products to meet the diverse needs for supplemental funds during the retirement years. In that sense, these products join annuities as tools. It is versatility that has brought life insurance into greater use for retirement planning, alongside annuities, which, by nature, are retirement products, he indicated.

Selling Life and Annuities

Brendan C. Walsh, president of Catalyst Solutions Group, Birmingham, Mich., pointed out that life and annuity products usually aren’t sold together — that is, not at the same time. There are exceptions, such as when a client buys a single premium immediate annuity and then uses the annuity payouts to fund cash value life insurance, Walsh told InsuranceNewsNet. But if a client needs both life insurance and annuity products, the more typical approach is to present the products separately, because “this avoids confusing the client.” On the other hand, presenting life insurance in the context of retirement planning definitely works, Walsh said, “especially for people in Generation X, because we have no pensions, there are questions

about Social Security, and clients are limited in the amount they can put into their 401(k)s.” Cash value life insurance is a very tax-efficient place for Gen Xers to put some of their retirement money, he said. The money grows tax-deferred and, when retirement arrives, the clients can make withdrawals up to basis and then take policy loans on a tax-favored basis after that. Walsh said that before he makes any recommendation at all, he goes through the client’s assets — the 401(k), individual retirement accounts, brokerage accounts, annuities, etc. — and assesses the person’s situation and needs. He may present life insurance for death benefit as well as future retirement income needs. Life insurance in the context of retirement planning does appeal to Gen X, he emphasized. He recounted how one Gen X client, in his mid-30s, decided to fund a permanent life policy over 10 years, with the intention of using the assets for supplemental retirement income after “30 years of tax-free compounded interest.” That’s the opportunity, Walsh surmised. “It’s the young successful clients. They are the HENRYs — the High Earning but Not Rich Yet clients. They need to save for retirement.”

Accurate Depiction

The Insurance Information Institute (III), in its online insurance handbook, has depicted the industry’s profile quite accurately. The life/health sector “consists mainly of life insurance and annuity products,” the III handbook said. As for the health insurance sector, the handbook said that “Most private health insurance is written by insurers whose main business is health insurance. However, L/H and property/casualty insurers also write this coverage.” Among themselves, most industry professionals can deal with the nuances, whether someone uses L&A or L&H as a point of reference. But when they are speaking with the general public and with clients, clarity about scope and direction would seem to make sense. This is clearly a business in transition. InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at linda.koco@innfeedback.com.

November 2015 » InsuranceNewsNet Magazine

We hear that!

Get Your E&O Coverage Rate Instantly! Broad Coverage at the Lowest Rates Choose your coverage and receive your certificate in minutes. You’ll experience, no underwriting, no lengthy application, instant eligibility, 10 yes/no questions and set rates. Eliminate your E&O headache at an incredible price! •

Rates as Low As $44 a month

•

Flexible monthly payment options available (pay in full and save money)

•

Broad coverage

INN readers will get access to a discounted rate. Get your rate instantly by:

Calling (855) 704-3206 or visit InstantEOCoverage.com. We’ll give your case special consideration if you had a “bump in the road” or need broader coverage.

INTERVIEW NO B.S. GUIDE TO ADVISOR SUCCESS

InsuranceNewsNet Magazine » November 2015

NO B.S. GUIDE TO ADVISOR SUCCESS FEATURE

ou’re still stuck in the 1950s. The whole industry is, according to the man known as the “Professor of Harsh Reality.” But you can thank him for saying so, because when Dan Kennedy tells you you’re wrong, he promptly follows up with rock-solid advice that will give you the market edge he’s given to companies such as Weight Watchers, Miracle Ear and Guthy Renker as well as several insurance companies and top-earning advisors. This “No B.S.” flair has rightfully earned Dan notoriety as one of the world’s highest-paid copywriters and marketing consultants, and it is the foundation of his popular books, which include No B.S. Marketing to the Affluent and No B.S. Trust-Based Marketing. In addition to his 25 book titles, Dan produces what may be the largestcirculation paid-subscription newsletter devoted to marketing. The truth is, when it comes to marketing, direct response, copywriting and entrepreneurial success, it’s virtually impossible not to come across his name or influence. In this interview with Publisher Paul Feldman (who has woven Dan’s principles and training into InsuranceNewsNet since its inception), the Professor himself exposes the shocking mistakes agents and advisors make in their marketing and shows you how to get on a path to monumental success. No B.S. November 2015 » InsuranceNewsNet Magazine

INTERVIEW NO B.S. GUIDE TO ADVISOR SUCCESS FELDMAN: You’ve worked with a lot of advisors over your career. What are some of the challenges you see them face in growing their businesses?

FELDMAN: Why did that banker fail to dazzle you?

a reference to this person. If it was B2B business, go to trade journals and look for information about this person. If they had KENNEDY: For four chief reasons. One, written a book, find it in the library or a he came at it from a product-centric ap- bookstore. KENNEDY: I’ve worked with financial ad- proach: “I’m with XYZ Company and we Now you can sit in Starbucks with visors for 20 to 25 years, with four or five do these things and offer these things and your phone and do a lot of research about big product providers and their organiza- put money in these 46 different things and somebody. And, although I don’t persontions as well as a lot of indeally use social media, there is pendents. The biggest thing a social media presence for that they miss is not unique me maintained by the comIf advisors are putting on a dog to them, although the way panies that are affiliated with and pony show, waving steak at they mishandle it might be. me. I also have a website. If The mistake is focusing you use Google or LinkedIn the door to lure old people into on the product and process or Facebook or Amazon or the room at the country club, 99.9 rather than on the real ways Wikipedia, you are going that a client arrives at deto find some stuff that you percent of those advisors do not cisions about their money. could use conversationally research the people who have Those decisions are prinbefore you ever got on the cipally driven by who they phone or came to a meeting. registered to be in that room. are going to do it with, not But the overwhelming mawhat they are going to do jority of advisors don’t. with it. If advisors are putting on a Health care professionals dog and pony show, waving such as dentists make the steak at the door to lure old same mistake. Marketers people into the room at the make the same mistake becountry club, 99.9 percent cause we live with our “stuff” of those advisors do not reday in and day out. We assign search the people who have a lot more importance to registered to be in that room. products and process than a So there’s this enormous prospective client does. amount of unnecessary igSo advisors are constantly norance built into the selling defaulting to product, prodprocess as there was in the uct differentiation, features, case of the banker on the benefits, prices, yield and phone with me. how this instrument works. Third, there was zero diThe way you can spot an agnostic questioning. So, no advisor in the woods if you probative search for a reason have no other means is that why I should take time and he’s going to show you pie consider doing business with charts. him. This is not how people Fourth is follow-up. I’m reach decisions and, more leaving for England on Sunimportantly, have trust and confidence we do it better and let’s get together so I day for a week of work and so forth. So I in where they put money. The entire can show you pie charts.” deliberately stalled him and inserted myadvertising, marketing, selling and Second, he came from ignorance. One self into his tickler file for a month from communicating approach is actually of the things that has changed in all the now mostly to see what he’ll do. at odds with getting the client to the years that I’ve worked with advisors is that I have great confidence that he will do point of purchase and their real goals. information about your prospective client nothing. I doubt I will get a piece of mail, You have a sales process in conflict has never been as readily, easily, cheaply or a book written by him, or a CD with an rather than in cooperation. accessible as it is now. interview with him on it. If I get anything, I had a call two days ago from a private When I started in selling, if I had an up- I’ll get some horrid ad-agency-produced banker seeking an appointment to dazzle coming meeting with a prospective client brochure about the bank, which, if you me with all of the wonderful things that and I wanted to research that person, I took the name and the logo off, could be a they can do that my current private bank- had to schlep over to the library, get the brochure about any other bank. ing folks might not be doing. The call was microfiche files of the local newspapers And this experience with him is the singularly unproductive. and pore through them, hoping to find common experience with all private 14

InsuranceNewsNet Magazine » November 2015

I Want To Show You How To

TURN YOUR D NNER SEM NAR INTO A CLIENT-GETTING BOOK

And Tell You How I’ve Made Millions Of Dollars For Our Agency (BY GIVING MY BOOKS AWAY)

Hi, my name is Nick Nanton, and 8 years ago I was an up and coming entertainment attorney from Orlando. Knowing that my calling wasn’t in practicing law, Nick Nanton, Esq. I decided to share what I had 3x Emmy Award Winning learned in going from relative Director & Producer obscurity to billing at the same hourly rate as the top entertainment attorneys in New York, LA or Nashville. The problem was, I was my only testimonial. The process worked for me, but how could I show that it would work for others?

My partner, Jack, told me very simply to write a book. So, I did. In addition to writing the book, I knew that by getting in front of my core market, and talking to them in person, I could be very effective in getting our new Agency off the ground. This led me to start speaking at seminars all across the country. Some days I would speak to 5 people in a room. Other days there were 50 or 60. No matter how many people there were, I gave each and every one of them a copy of my book, Celebrity Branding You!®. Eight years later, I still give hundreds, if not thousands, of these books away every single year.

Why In The World Would I Give Away My Book For Free? Because it brings me business.

What was in the book, you might ask? Quite simply, it was a neatly edited version of the same presentation I was giving at these seminars all over the country. I knew my presentation worked, as you probably know the numbers in your own seminars. I knew if people heard my message, they would resonate and want to become a client of our Agency. I bet your presentations work the same way. But what happens to those I can’t meet at the seminar? Or those that are no-shows? Or those that wouldn’t come to a seminar, or those that came to my website and skipped the seminar all together?

I wanted them to see my presentation, but they were not going to be in the audience.

The Best Closer I Ever Hired Was...My Book! My book was the next best thing. It also created leverage. I didn’t have to fly from Orlando to Phoenix to hand someone a book. This leverage meant I could help more people, without having to be on the road every night of the week. Being out of the house 1 or 2 nights a week is tough when you have a tired wife at home who is taking care of 3 kids. The book was the ultimate leverage point in my business, just as I know it can be for yours. The book also positioned me as an instant expert and authority on personal branding and celebrity positioning. You see, once you write a book on the topic of

your choice, people instantly start to view you as the leading expert in that field. It’s really cool

when that happens.

Now, as far as results, after we released Celebrity Branding You!®, our Agency recorded more than $1,000,000 in sales from our products and services and has continued to climb exponentially. From giving away a book.

Through refining our process with 1,800+ authors, we have created a very simple and pain-free way for you to take your high-converting seminar presentation and turn it into a hardcover book we like to call a ThoughtLeader™ Book. A ThoughtLeader™ Book is much more than just ink on pages. It’s what we call a 3D Book, because you also get the audio from your seminar, as well as the video recording, so you’re giving your best seminar presentation every single time. With all

3 dimensions, you will resonate with any prospect or client on their level no matter what their preferred media is.

The process is really easy and simple, and the best part is that you already have the content that you know resonates with your market. Your Seminar!

Let Us Turn Your Seminar Into A Book For You! It’s what we do best, allowing you to do what you do best - helping your clients to plan for their retirement. Here is what I want to do for you today. I want you

The book really was the best closer I could ever hire for my business. It did all the hard work for me. I just had to get it into as many people’s hands as possible.

to talk with one of my Publishing Agents about how you can take your current, money-making seminar and turn it into a book. They will go over the process, the timeline and the investment needed to get you up and running (don’t worry it is much, much more affordable than you may think).

What would happen if you turned your ultimate sales presentation into a credibilityboosting, prospect-attracting and client-getting book?

Before you talk to one of my Publishing Agents, I am also going to give you a free copy of a new special resource we have put together just for you titled, Write Your

A whole lot. And that’s what I want to talk to you about today. Over these last 8 years we have published more than 1,800 authors from 38 different countries, including some of the top financial advisors around the world. The advisors we have worked with know the power a book brings them. You can use your book to attract prospects, to position yourself as the expert before an initial meeting or to send as gifts to prospects who can’t attend a seminar. There’s no wrong way to use your book, and the right way can catapult you to a record year in your business.

Book…Grow Your Financial Empire.

To claim a copy of Write Your Book…Grow Your Financial Empire and to speak with one of my

Publishing Agents on a no-obligation Author Consultation, simply call our offices at (888) 710-5584 or visit a special website we have created just for you at: www.celebritybrandingagency.com/mybook.

I look forward to giving you the tool that has meant more to me and my business than anything else before and anything else that has come since. A book that does the selling for you. Here’s to bringing out the author in you!

To Claim Your Special Resource And Learn How We Can Turn Your Seminar Into A 3D Client Magnet, Call (888) 710-5584 Or Visit www.celebritybrandingagency.com/mybook November 2015 » InsuranceNewsNet Magazine 15

INTERVIEW NO B.S. GUIDE TO ADVISOR SUCCESS bankers, financial advisors, estate-planning attorneys and charity annuity salespeople. Or to be fair, with about 99 percent of everybody. It’s as if nobody has learned anything about advertising, marketing or selling since the 1950s. There is still a gross overreliance on a shoe-leather, door-knocking, cold-calling, manual-labor-driven process and really poor, unsophisticated use of marketing and advertising. It dates to a time when media, as well as knowledge about how to use media, were very, very limited. In my work lifetime, FedEx, fax and the Internet came into being, and I could go on and on and on. And yet, for the most part, all those media were not used by the sales professionals in these fields and are used badly by the companies they are attached to. FELDMAN: How do you think insurance company marketing misses the mark? KENNEDY: For the most part, it serves three purposes. One, it is more aimed at Wall Street approval than it is at

Agents have to be much smarter about positioning, advertising, marketing and selling themselves. effectiveness in the field. Two, it is satisfying the egos of the C-suite of the companies, so it can appear at the tennis tournament or the golf thing they sponsor. And three, it’s mostly plain stupid because it is advertising that ad agencies love because it’s unaccountable, not measurable, and all it has to do is satisfy the people paying for it. But when it gets down to the grassroots level where John the Advisor has to get this appointment, it has done basically nothing. The companies do their folks in the field no favors and yet waste an enormous amount of money that could be redirected.

The agents themselves have to be much smarter about positioning, advertising, marketing and selling themselves. That’s not an easy transition. For somebody who has come up as a sales professional, they are deeply ingrained in “kill today, eat today.” To transition from a sales culture to an integrated marketing and sales culture is not an easy thing to do. FELDMAN: How can John the Advisor go from a sales mentality to an integrated marketing mindset?

PRODUCER SCHOOL FEB. 14-26, 2016, ORANGE, CA

RELEASE

YOUR INNER BEAST! You’ll return from Producer School knowing how to hunt. Producer School isn’t a one-time pep talk; it’s a permanent solution for training new producers. You will build confidence, sales skills, and insurance knowledge that improves your ability to close new accounts and grow your existing ones. Enjoy

PRACTICE

2–WEEKS TRAINING &

with the best coaches in the industry.

Seating is limited so register now!

www.TheNationalAlliance.com or call 800-633-2165

InsuranceNewsNet Magazine » November 2015

NO B.S. GUIDE TO ADVISOR SUCCESS FEATURE from norms and remain compliant in a highly regulated environment.

KENNEDY: There are a couple of ways. One is to consider the demographic and psychographic makeup of your clients. Who do you have and who do you want? Then get outside the community of financial advisors and companies and study how nonfinancial businesses market to that same constituency. For example, if you have 55- to 70-yearold, mass affluent to affluent, married homeowners, you can look at companies like Sleep Number Beds. They have local brick-and-mortar presence with salespeople but also run very smart and aggressive national direct-response, lead-generation advertising. So, who is doing this well with the constituency that I want to reach? The second thing is that I would be getting a general understanding of what I frame as direct marketing for nondirect marketing businesses. The third is to forget the accepted norms, which are usually wrong. Most businesses, including this one, are very Amish. Everybody is in a circle looking at each other and mostly trying to farm incrementally better but still farming with a mule and a walk-behind plow. There’s enormous resistance to anything that they don’t see facing each other inside that circle.

This happens with vendors who specialize in a given industry. I do pro bono work for food banks. There are four or five ad or media agencies that produce most of the direct mail and most of the newsletters for all the food banks in the country. Consequently, now you have an Amish community with four in it standing in a circle looking at each other. Then they sell their farm implements to the Amish communities standing in a circle around them. If this were the way that financial advisors operate — absent rogues, renegades and innovators — every advisor would be going to his appointments with a big pooper scooper to clean up after his horse when he parked outside. And he couldn’t meet with anybody after 5 p.m. because there would be no electricity nor could he fire up the laptop to show me that nifty pie chart. If you want above-average anything, you will not get that by sticking to norms any more than a reformed alcoholic has much of a chance of staying sober if he frequents bars and hangs out with heavy drinkers. FELDMAN: I love that Amish analogy. But that being said, I think some people would ask how they can deviate

KENNEDY: Advisors have this religious belief that they are the only put-upon, hamstrung, regulated profession or industry in the world. And they feel like they are wearing a crown of thorns and being abused by this and being severely restricted by that like no one else. And it’s entirely untrue. There’s virtually no industry — and I work in over 100 — without regulatory interference, scrutiny, rules of law and in many cases product provider bureaucracy. Anybody in e-commerce will tell you their horror shows of Facebook and Google. Anybody in nutrition, nutritional supplements and most health fields is dealing at least with the Food and Drug Administration, the Federal Trade Commission, the attorneys general in every state and in most cases their own professional associations. Chiropractors and dentists are at odds with the national and state chiropractic associations and, ironically, even lawyers must combat the compliance dictums of their own bar associations. Pick a business and I’ll be happy to show you how it is mired in the same sort of stuff. Almost without exception — and I’ve been at this for 41 years now — people lie about the limits of the actual rules that they must live by versus what they have come to believe are the rules. The advisor is living inside a pretty small box manufactured entirely of peer standards, industry norms, his beliefs and in many cases his company’s compliance officers’ beliefs about what can and cannot be done. But that is within a much larger outer box that represents what really can and cannot be done. I’d rather not mention them by name, but I have a favorite compliance story. Some years ago, I did a bunch of marketing work for a securities company for recruiting but not for public consumption. Shortly after delivering all the work, mostly copywriting, the vice president called and said he had bad news. The compliance guys got into it and it’s all marked up with all sorts of stuff you can’t say and we need you to come into a meeting. I went to the meeting and we started through all of the stuff they said I can’t say within the advisor community to recruit advisors.

November 2015 » InsuranceNewsNet Magazine

INTERVIEW NO B.S. GUIDE TO ADVISOR SUCCESS Dan Kennedy, No B.S. Direct Marketing, Entrepreneur Media, 2006

There are three components to marketing — for anything, anywhere, at any time, at any price, to anyone, under any conditions. Every individual loves to insist his business circumstances are somehow different. Not so. Every business on earth, past or present, requires these three things to prosper. They are not in sequential order because they can’t be. One is no more important than the other. One does not necessarily precede the other. But you need all three in place simultaneously. Think of it as a three-legged stool. It can’t stand with any one leg broken or missing. It needs all three.

And I merrily pointed out to them how much of it I had gotten out of their own corporate brochures and their own material that was actually being used with the public. Often you have compliance people who from one day to the next don’t even know what they are doing. They said no yesterday. But they’ll say yes today. It depends on their mood. So the first thing is there’s a lot of nonsense about this. When you press and get facts, you find that you have a lot more room to maneuver than most people think they do. The second thing is neither law nor industry compliance standards preclude doing things differently than everybody else does them. They preclude certain specific ways of doing things. 18

For example, nothing precludes calling the three-hour evening dog and pony show an Evening with the Authors rather than a seminar or a workshop as long as the advisor is actually an author. Nothing precludes having a celebrity from the local football team there to greet everybody and sign footballs. But hardly anybody does it. So the idea that they can’t do anything radically different because they are in a compliancesensitive industry is just ridiculous. I have a saying that most people would rather have a good excuse than a good opportunity. The reason the vast majority is comparatively poor and at the bottom of their industry in terms of income is not luck. It’s attitudinal and behavioral. People prefer their comfortable excuses over

InsuranceNewsNet Magazine » November 2015

It is also a closed triangle. Each of the three components feeds the other two. If you will, “marketing strategy” flows laterally, to and from each component, to and from the other two. There are quite a few ways to screw up the triangle, but there’s only one way to get it right.

uncomfortable and challenging change and invention. FELDMAN: Most advisors (and compliance departments) believe and even insist that they can’t use client testimonials. You say otherwise. How can we as an industry use testimonials in our marketing? KENNEDY: It is absolutely untrue. I have registered investment advisors as clients and we legally use testimonials. There are ways you can’t, but there are ways that, very carefully, you can. The first question is whether you want to figure out a way to do what is effective or if you want to accept the first no you get from a compliance officer, lawyer,

NO B.S. GUIDE TO ADVISOR SUCCESS INTERVIEW

product provider or peer group. Success has a great deal to do generally with how easily you accept being told no. I can show you example after example of deviation from what the industry views as laws but are in fact only norms. For example, I have an RIA client who has an annual picture book of clients presenting photographs of and stories about their lifestyle and happiness achievements of the year. So Bill and Mary, who have always dreamed of buying an RV and touring every state in the union, show pictures and tell stories about that. Clients who have kids graduating from great colleges or similar accomplishments provide pictures and stories about that. But no one ever explicitly says this is possible “because my advisor Bob makes

the Cleveland Clinic Foundation, which sold me a charitable gift annuity, did a big feature story in their newsletter about me. Some people trade away their ability to do certain things for the parent company relationship they prefer. As long as they know they’re making that trade, I have no problem with it. But there is enormous flexibility in all of this that people too easily ignore.

What do you think matters most to clients

searching for ents FELDMAN: Many of the advisors that I’ve met over the years say they only work on referrals. What are your thoughts on that?

KENNEDY: I think they placed an artificial cap on growth. Also, the fact that your best client comes from a referral is somewhat mythical. Sometimes that’s true. It’s

I don’t buy anything from anybody who doesn’t do good follow-up before the sale because that tells me what life is going to be like after the sale.

life insurance? www.sellwhatmatters.com

ce?

rs.com me so much money or takes such good care of my money.” Such words are never uttered. It is merely a celebration of clients’ lifestyles and happiness accomplishments. The message, though, is pretty damn clear. You would have to be Stevie Wonder not to see it. It is a Chicken Soup for the Soul book of stories by clients. It is not as good as an overt testimonial, as in, “I went through five advisors who lost all my money and finally John saved me.” But it is infinitely better than omitting one of the most powerful categories of marketing tools that there is. I have another client who in his newsletter regularly recognizes a client’s charitable giving and the charity they support. But nothing is ever explicitly said that this is possible “because John the Advisor takes such good care of my money.” The message is there, and for his demographic and psychographic, being charitable is a motivation. I started him doing it because

more true that the easiest-to-persuade client may come from a referral. But not necessarily the best one. In my own practice as a consultant and a copywriter, I would rather not have client referrals. That’s because in most cases they haven’t gone through my own feeder system and educational process to be really good, appreciative, respectful, trusting and compliant clients before they get to me. If an advisor wants to focus on or emphasize referrals, that’s fine. But there’s a role for integrated marketing and selling. The reason people get less pure referrals than they could is because they don’t do referral marketing. They don’t really have media and tools and systems and processes for the client to refer into. Instead, they basically put all the onus on the client: “Here I am. You know I’m doing good work for you. Please tell your friends and family about me.” That’s asking your clients to be a sales force not a

November 2015 » InsuranceNewsNet Magazine

PLAG. 10409

(09.15)

For Financial Professional Use Only. Not for Use With Consumers.

Flip to reveal...

INTERVIEW NO B.S. GUIDE TO ADVISOR SUCCESS

The new fiduciary standard is making it just about impossible for a lot of people of very modest means to get advice from a human. So they can just get advice from a robo-advisor online and they will be just “fine.”

referral source. Very few are really capable of doing that. Media and marketing play a big role with devices like a good video sales letter that the referring client can tell people to watch. I have a wealth management client who is focused on soon-to-retire or recently retired business owners of companies worth $20 million or more. In three years, we’ve gone from him doing a book a year to doing a book every three months, each on a different piece of subject matter related to the clientele. They are largely designed for clients to want to give them to a friend of a family member and say, “Man, you’ve got to read this book. This is directly relevant to what you and I have been talking about that’s going on in your life right now.” So we’ve lowered the bar dramatically for the referrer. They don’t have to have the awkward conversation that they are illequipped to have: “Man, there’s a workshop coming up; how about I drag you to it?” FELDMAN: Yes, you can really put your referrals on steroids if you have a whole integrated program and follow-up system. Do you find that the follow-up is often a problem in this business, especially after a seminar? 20

KENNEDY: Oh, of course. Here is what I have asked: “Hey, you guys waved steaks at people, got them into a meeting, did your dog and pony show. You had 100 there and you booked 20 meetings. What do you do with the other 80?” Here are the answers I’ve gotten. Very sheepishly: “We don’t do anything.” Or, “We dump them into our generic email or mail list and the next time we are feeding everybody steak, they will get an invitation.” Or, “Bertha calls them if Bertha has time, but since Bertha doesn’t want to call anybody, Bertha rarely has time.” So 80 percent of everything they spent to put people in that room, they throw down the toilet. I’ve tried to make people uncomfortable with this. I have brought them up in front of the room to tear 80 percent of a $100 bill off and set fire to it because that’s exactly what they are doing. There are lots of reasons people don’t act immediately. For example, evangelical Christians may have taken a sworn oath to do nothing until they sleep on it. Follow-up is a way of demonstrating sincerity. I don’t buy anything from anybody who doesn’t do good follow-up before the sale because that tells me what life is going to be like after the sale.

InsuranceNewsNet Magazine » November 2015

FELDMAN: How does an advisor’s life change when they adopt the methods that you are describing? KENNEDY: It is a much more sophisticated and enjoyable way to do business. Not only will that make life better for the advisor, it will actually make this less stressful for the clients. It will largely preempt the increasing tendency to shop. The Internet is the gift that keeps on giving, but it’s also the gift that keeps on taking away by commoditizing the business. That’s especially true with robo-advising, which the Obama administration is pushing. The new fiduciary standard is making it just about impossible for a lot of people of very modest means to get advice from a human. So they can just get advice from a robo-advisor online and they will be just “fine.” Then there is the Google effect. So the advisor’s dog and pony show told people about “401(k) rollovers,” and then they go home and Google “401(k) rollovers.” As they look at all the information that it brings up, basically they age and die before you ever get a chance to make an appointment. There is a more sophisticated approach: integrating, positioning, advertising, marketing and selling preempts a lot of this growing nonsense. It’s really about becoming the go-to guy. There is a process for this. It is absolutely appropriate for advisors as it is for lawyers, estate planning attorneys, cosmetic dentists. It’s about developing a trust relationship environment, and advisors would be wellserved by learning it and elevating the way they play the game.

Want more Dan Kennedy? As a special gift for InsuranceNewsNet readers, Dan was kind enough to offer one of his best-selling books for free (just pay $4.95 shipping and handling) and some free bonuses worth over $633! To claim your copy (while supplies last), simply visit:

FreeKennedyBook.com

tAffordable offers: coverage that offers:

PROTECTION BALANCE OPTIONS

with lasting guarantees and opportunities by delivering competitive guarantees and for chronic il ness protection and for uncapped cash-value accumulation cash-value accumulation in one solution beneficiary income streams

VALUE FLEXIBILITY FREEDOM REEDOM

ntinue with lower policycoverage expenses and with premium without payments when life the to continue coverage without the of competitive higher cash-value accumulation renewal happens, without significantly rates impacting shock of higher renewal rates potential the guarantee

www.sellwhatmatters.com

OPTIONS PROTECTION BALANCE OPTIONS

hronic with lasting guarantees illness and opportunities by delivering protection competitive guarantees and and for chronic illness protection and ficiary for uncapped cash-value income accumulation cash-value streams accumulation in one solution beneficiary income streams

Life insurance policies issued by Protective Life Insurance Company (PLICO), Birmingham, AL. All payments and all guarantees are subject to the claims paying ability of Protective Life Insurance Company. www.sellwhatmatters.com

s are Life insurance policies subject issued by Protective Lifeto Insurancethe Company (PLICO), claims Birmingham, AL. All payments paying and all guarantees are ability subject to the claims paying ability of Protective Life Insurance Company.

PLAG.10409 (09.15)

For Financial Professional Use Only. Not for Use With Consumers.

November 2015 Âť Use InsuranceNewsNet 21 Use PLAG.10409 Only. (09.15) Not for Use With For Financial Consumers. Professional Only. Not for UseMagazine With Consumers.

NEWSWIRES

Health Insurers Will Lose $2.5B Under ACA The Affordable Care Act (ACA) has spawned some winners and some losers as the law upended health care. And it seems as if health insurers are among the losers — to the tune of about $2.5 billion. That’s how much health insurers will lose under the ACA because patients covered under the law last year were sicker than expected, according to government figures. The U.S. Department of Health and Human Services (HHS) released updated numbers for a program that helps stabilize premiums in the ACA’s insurance markets, which offer taxpayer-subsidized private plans. Under that program, insurers whose medical claims costs were lower than expected pay in money to help insurers whose costs were higher. For 2014, insurers that had sicker-than-expected patients requested nearly $2.9 billion in payments, HHS said. But the government has collected only $362 million from insurers that did well. That means insurers who requested payments will get less than 13 percent of what they sought. Some plans may face financial problems as a result, Obama administration officials acknowledged. They said those are expected to be isolated cases. A leading explanation for the shortfall is that 2014 was the first year of the program, and insurers were uncertain about where to set their premiums. Things may ultimately balance out, but it’s too early to tell.

CONGRESS PASSES PACE ACT

In a move that industry leaders described as a huge win for states and small-employee groups, Congress passed the Protecting Affordable Coverage for Employees (PACE) Act. The legislation allows states to have greater flexibility in determining their own small-group markets instead of relying on a single national standard to define small groups, which was mandated by the ACA. The health care law had defined small businesses as those having up to 50 employees, but that number was to expand to 100 employees on Jan. 1. The PACE Act would keep the small business definition at 50 workers but would let states increase the number if they choose. Under current law, companies considered small businesses must offer certain required benefits. Business groups complained that increasing the number of firms classified as small businesses would increase health care costs for many employers whose benefits today are less generous. DID YOU

KNOW

? 22

HOUSE EXAMINES FIDUCIARY RULE ALTERNATIVE

The House Financial Services Committee passed the Retail Investor Protection Act (RIPA), which is seen as an alternative to the Department of Labor’s proposed fiduciary rule. Rep. Ann Wagner, R-Mo., sponRep. Ann Wagner, R-Mo Photo credit: Associated Press sored the act. This was not the first time RIPA was introduced in the House of Representatives. Wagner introduced the bill in 2013. House Democrats also are getting into the fiduciary act, with 96 of them recently signing a letter asking Labor Secretary Thomas Perez to make significant changes to the rule. The RIPA is expected to pass the full House, as it did in 2013. Its prospects in the Senate, where the bill died two years ago, are murkier.

41% of Americans believe that Social Security benefits will not be available by the time they retire. Source: Pew Research Center

InsuranceNewsNet Magazine » November 2015

QUOTABLE Over time, the expectation is that virtually every employer will be subject to the Cadillac tax. — Larry Levitt, senior vice president of the Kaiser Family Foundation

WILL THE CADILLAC TAX WRECK EMPLOYEE HEALTH INSURANCE?

The “Cadillac Tax” is a 40 percent levy on what employers and workers jointly pay for an employee’s health coverage above a certain threshold — $10,200 for individual coverage and $27,500 for family coverage. The Kaiser Family Foundation, in a recent report, found that nearly 25 percent of employers would be subject to the tax when it starts in 2018. After that, Kaiser said, 30 percent of employers are projected to pay the tax by 2023, and 42 percent of employers by 2028. But only 5 percent of companies that expect eventually to be subject to the tax actually expect to pay it. Those companies say they either already have or plan to make changes to their health coverage programs that will allow them to avoid the tax, according to a survey by the International Foundation of Employee Benefit Plans. Those changes include reducing benefits, shifting costs to employees in the form of higher copayments or coinsurance, and switching to health plans that have higher deductibles. Such moves to have workers pay a bigger share of their health costs out of pocket, as opposed to in the form of premiums, would help get health plans under the Cadillac tax threshold. Almost nine out of 10 of the companies surveyed reported that they already have calculated whether they will trigger the tax at some point. The majority of employers who expect to be subject to the level, 62 percent, said it would affect them in 2018 if they did not make any change to their plans. Others said they expect, in the absence of any changes, to be hit by the Cadillac tax in future years.

[NEWSWIRES]

Life Insurance | BenefitAccess Rider

NUMBER OF RIAS UP BY 3.1% SINCE 2014

What the Same-Sex Marriage Ruling “How I make sure I’m never Could Mean for can Couples

The number of registered investment advisors (RIAs) in the United States rose 3.1 percent in the 12-month period ending May 31 to 32,736 firms. That’s according The Supreme Court’s ruling that legalizes same-sex marriage to a survey published by the consulting in all 50 states has implications far beyond the ability of couand analytics firm Meridian-IQ. ples to obtain marriage licenses. There was a net increase of 997 RIAs With the Supreme Court ruling, spouses in same-sex during the period compared with the couples will be eligible for Social Security benefits, and previous year. In 2013-2014, the number they will be covered under the survivor benefits rule for of RIAs rose 2.4 percent over the prior both defined contribution and defined benefits plans. If both spouses are American year, to 31,739 RIAs. citizens, they are also able to use the unlimited estate tax marital deduction at The survey found the top five states death to pass assets to a surviving spouse without incurring federal estate taxes. They for the number of RIA firms in the year are eligible to pass unused estate tax exemptions, as well as any gift tax exemptions, ended May 31 remained as follows: Calto a surviving spouse. ifornia, with 4,735 RIAs; New York, with Couples will also now be allowed to file federal tax returns using the “married filing 3,465 RIAs; Texas, with jointly” or “married filing separately” options in order to receive state-level spousal 1,872 RIAs; Massachusetts, tax breaks and benefits. with 1,353 RIAs; and Florida, with 1,349 RIAs. In terms of population Advisors Council. it could send a bank account into intendensity — or the number of The report points out that women sive care. RIAs per person — Connecticut, Massa- are the breadwinners in four out of 10 Over the past two years, nearly onechusetts, New York, Colorado and New American families. Nearly all (95 percent) third of privately insured Americans Hampshire lead the nation. Connecticut of women will be their family’s principal received an unexpected medical bill had one RIA for every 3,989 people, and financial decision-maker at some point in where their health plan paid less than New clients Hampshire onebenefit RIA forprotection. every their In addition, breadwinner Your wanthad death Butlives. they’re also thinking about wom- expected, according to the Consumer Re7,158apeople, theillness surveycould also found. en are of responsible 75 percent how chronic impact their quality life—andfor their family’s.of all fi- ports National Research Center. nancial planning responsibilities in their For many, it’s an expense that isn’t so NOW, LIFE INSURANCE CAN HELP WITHhouseholds. BOTH. NEW STUDY REVEALS WHAT easy to handle. A Kaiser Family FoundaWOMEN BREADWINNERS WANT Despite all that responsibility, 62 per- tion report estimated one in three con• Permanent life insurance with the BenefitAccess Rider provides Even though more women are the family cent of the women surveyed said they are sumers has difficulty paying their meddeath benefit protection and financial flexibility. breadwinners than ever before, they lack not as knowledgeable about their finances ical bills, and earlier this year, Bankrate. confidence in who theirqualify wealthcan management would like death to be, benefit. and 19 percent com found that only 38 percent of con• Clients accelerate upastothey 100% of the skills. That lack of confidence is com- said they are not knowledgeable at all. sumers had enough liquid assets to cov• Benefits used women howevergive they choose, from are paying pounded by thecan lowbegrades And they not family happy with their fi- er an unanticipated expense such as an caregivers or skilled providers to hiring help advisors for transportation, their financial advisors. nancial either, giving their advi- emergency room visit. cooking, cleaning, maintenance Those were among the home findings of the sororanerrands. average of 5 on a satisfaction scale Medical debts are quick to reach colstudy “What Do Breadwinner Women of 1 to 10. lection status. One in five consumers has To explore life insurance with BenefitAccess, call 844-606-7873 Want?” conducted by the Family Wealth Breadwinner women seek a wide range an unpaid medical debt on their credit reor visit prudential.com/benefitaccess. of services from their financial advisors — port, according to a Consumer Financial such as coordinating with other advisors, Protection Bureau and creating strategies for charitable giv- study. The average ing and higher education — but frequently amount owed: $579. do not receive them, the study notes.

a burden on my kids?”

This is where you come in.

QUOTABLE

I’m like, ‘Are we sure?’ Of SURPRISE MEDICAL BILLS ADD TO course everyone was reading Life insurance is issued by The Prudential Insurance Company of America, Pruco Life Insurance Company (except in NY and/or NJ) and Pruco Life Insurance CONSUMER PAIN Company of Newquickly Jersey (in NY and/or NJ). All are Prudential Financial companies located in Newark, NJ. Guarantees are based on the claims-paying ability of the through and following Being sick or injured is bad enough, but issuing company. it at that point. when is addedthetolife theinsurance situation, The BenefitAccess Rider is an optional rider for chronic or terminal“bill Illnessshock” that accelerates death benefit. It is not Long-Term Care (LTC) insurance.

KNOW

NEARLY

Benefits received under the rider will reduce and may deplete the death benefit. Electing the BenefitAccess Rider results in an additional charge and underwriting requirements. Some benefit may be subject to a fee. Other terms and conditions apply. Clients should consult their tax and legal advisors. — Sylviapayments Burwell, Secretary of DID YOU andalso Human For New York contracts.Health Please noteServices, the rider is not subject to the minimum requirements of New York Law, does not qualify for the New York State ofdeath NFL players between andfor 2003 learningand of the Long-Term Partnershipon Program isSupreme not a Medicare supplement policy. In addition, receiving accelerated benefitsdrafted may affect clients’ 1996 eligibility DECLARED BANKRUPTCY within 12 years Court’sand decision King v. may be taxable. public assistance programs such inbenefits BurwellInc. and its related entities. of retirement. Source: National Bureau of Economic Research © 2015 Prudential Financial, FOR THE EDUCATION OF PRODUCERS/BROKERS ONLY. NOT FOR USE WITH THE PUBLIC. 0275755-00002-00

16%

November 2015 » InsuranceNewsNet Magazine

InsuranceNewsNet Magazine Âť November 2015

CRACKING THE CODE TO ONLINE SUCCESS FEATURE

November 2015 » InsuranceNewsNet Magazine

FEATURE CRACKING THE CODE TO ONLINE SUCCESS

Check out our Tech Guide Special Section » PAGE 35

hris Huntley lived in programs, mailers and networking so much that he left an insurance compaparadise, but he was groups. And I did OK with some of those, ny in the late 1990s to set up websites for not leading a dream but I couldn’t really get a good return on insurance agents. life. investment or make a good living,” HuntThe venture was a melding of previous Although he was ley said. “So at this point when I read ‘30 attempts at a career. He started training in the oasis of perfect leads a month,’ I thought, ‘I would kill as a computer programmer, but that did weather and beaches somebody for 30 leads a month.’” not work out. He moved to an insurance that is San Diego, the climate was not For $500, Huntley received an e-book software company as tech support before as good for his life insurance business. and a blank website with a quote form. he went to an insurance carrier to train as For three years he had gotten his feet wet in the business by selling part-time while holding down another job as a telemarketer. He dived in full time in 2007, just as the Great Recession’s tsunami was building on the horizon. He was paddling hard just to stay afloat when he saw his salvation, the Land of the Long Tail — also known as Internet marketing. The “long tail” is search engine optimization (SEO) lingo that reveals far more than its definition. More on that later, but suffice it to say that “long tail” captures the essence of how to be a successful life insurance seller on the Internet. How successful? How about going from dreaming of getting 30 leads in a month to actually getting 1,200 a day? How about becoming so wealthy with leads that you have to devise a system to funnel them to a bevy of Chris Huntley was anxious about being able to make it as a life insurance agent in other agents? How about never San Diego until he learned and experimented with Internet marketing. Now he is so having to “work” again unless flooded with online leads that he no longer has to sell insurance. you want to? That is Huntley’s story. His original website, insuranceblogbychris. He was off. He didn’t know exactly where an actuary. It was there that he proposed com, and a couple of other sites are he was going and only vaguely how to get a plan to provide websites to insurance lead-generating factories that ship leads there, but he knew this might be his last agents. When the company didn’t go for to a sister insurance agency he started. best chance to make life insurance selling it, that’s when he went out on his own to He doesn’t do any selling himself, but he work. do it. is looking to help other agents follow his He sold websites, online quoting syspath with eLifeTools.com. OUT IN THE FRONTIER tems and SEO services to agents in the Not much about his background The person who sold Huntley the site and United States and Canada when he dewould have indicated that he was a natu- book was a Canadian on a mission. Glenn cided to jump into insurance sales himral for Internet marketing. His bachelor’s Cooke had sent an email to 1,000 people self in his home Canadian market. He degree from San Diego State University promoting his book How My Website owns the agency Life Insurance Canada, is in Spanish linguistics. He did a little Generates 30 Insurance Leads per Month where he employs three brokers and an teaching. He was giving life insurance a and a WordPress website. administrative staffer. try at the behest of a friend, but nothing About five people had taken him up The paperless business conducts all its was catching fire — until an irresistible on the offer and only Huntley followed interactions with clients online and on offer popped up in his email. through with implementing the site. the phone, so it doesn’t need a physical “I’d done door-to-door, referral Cooke had believed in what he was doing office. 26

InsuranceNewsNet Magazine » November 2015

Cooke is still considered a resource for agents looking to generate business online. His message is still the same, although some of the methods might have changed. Obviously, the first step is to get a website. Although Cooke used to sell a website starter kit, he said it is even easier today to set up a website on WordPress. But if people are uneasy about finding their way about the interface, hire somebody, he said. “You find somebody who does insurance websites, pay them a few bucks and make sure it’s on WordPress,” Cooke said, adding that the provider should understand that the main goal of the site is lead conversion. “That’s the problem solved,” he said. “This is not on the order of magnitude of renting an office, or buying a house or something like that. This is a website. Websites are transient. It’s real easy to pick up and move, or at least it’s not catastrophic to do so.” Although establishing a place on the Internet is easier these days, getting people to visit your website is still not a snap of the fingers. WHERE IS EVERYBODY? Getting people to visit your site is where marketing comes in. SEO is the art and science of making your site attractive to search engines. For example, if you were in Canada and typed “life insurance” into Google, Cooke’s site would pop up at the top of the list. That means Google valued his content, so its algorithm gave Cooke’s site a high page rank. Then the site gets even more traffic and even more people link to it, perpetuating its high standing. But how do you get that high up in the rankings? That’s the question that spawned a huge SEO industry. Over the years, many methods to gin up a website’s ranking have come and gone. But those with staying power usually attribute it to having content that connects. Quite simply, Google is looking for good information to deliver in its searches. So it is not enough just to have content; the content also must be original. Because insurance agents aren’t professional writers, shouldn’t they just hire somebody to write content for them? That might have worked once, but not November 2015 » InsuranceNewsNet Magazine

FEATURE CRACKING THE CODE TO ONLINE SUCCESS

Check out our Tech Guide Special Section » PAGE 35

Glenn Cooke tried a few career paths until everything finally came together when he became an Internet marketing consultant for insurance agents. He has since settled in Ontario, Canada, and started his own agency where he and his team sell life insurance online and on the phone but never actually meet a client. anymore. Finding an expert on your subject who also can write well can be an expensive proposition. The people available for hire at an affordable rate are more likely experts at writing, but they must quickly gather facts about your field. And where do they go for those facts? Google, of course. “They spend five minutes learning about 10-year term life insurance on the Internet by reading the top 10 articles that come up when you Google the words ‘10-year term life insurance’,” Cooke said. “They chew that up and then regurgitate it and Google can tell that’s what happened.” Content must be original as in “really original,” but even that isn’t sufficient. Cooke said he has to remind himself of that in his own writing. “When I’m writing content for SEO purposes, I don’t just write unique material. That is not good enough,” he said. “It needs to be original subject matter. You need to talk about a subject that nobody else has talked about on the Internet yet. There’s plenty of that out there.” So that means agents can add “writer” to their many talents. But how? 28

Anybody who has stared at a blank screen and willed words to appear probably will break out in a sweat thinking about writing enough words to populate an entire website. CONTENT FROM THE NICHES Huntley was able to build his magic lead-generating machine from his own content. But he also was not sure how to start. He had the guide that Cooke had provided and a website with plenty of empty space awaiting his words. “All I had to do was write articles and somehow get Google to rank me,” Huntley said in an understatement. He turned to the first rule of writing — write what you know. Whenever he ran into something interesting in his practice, he wrote about it and posted it. “When I wrote about somebody who had a heart valve replacement or a diabetic whom I had helped, specific things like that, more people with those conditions started calling me and requesting quotes,” Huntley said. “I happened to write an article about a diabetic I helped who had high blood pressure. And when other people searched ‘Can I get life in-

InsuranceNewsNet Magazine » November 2015

surance? I’m a diabetic and I take blood pressure medication,’ they found me.” In fact, even five years after he wrote that heart valve item, it is still the topranked article for a Google search of “heart valve replacement and life insurance.” At first, it came naturally out of his practice, parlaying research he already was doing for clients. “If you work on a case and you make calls to 10 insurance company underwriters and you find the one or two that are lenient on a particular issue, you’ve already done the hard work and now you’ve got insider’s information that you can share with the public,” Huntley said. “You might not share which company it is, but you can share that you can help with this issue. Anybody else who hasn’t had a case like that or didn’t find a solution, they’re not writing about that.” After that initial success, he looked at the process from more of a marketing perspective. “I realized I could intentionally go after different keywords,” he said. “I know how the insurance underwriting guidelines work. I would be a better agent for peo-

ple to go to rather than their local agent, because I know where to go with these cases.” Huntley became an expert on how to place people with high-risk medical conditions or other pre-existing conditions, and he wrote about them. That is how he eventually ended up with more than 500 articles on his site. Even if the article is not about a niche, he would put as many conditions as possible into a more general article to snag those searches. When people hit on Huntley’s site, they usually are ready to talk insurance because all their searching has led to him. “What people don’t realize is 70 percent of people who go to Google are searching for a search term that has never been searched before,” he said, adding that most people start with a very general search and a corresponding result. “They’re probably not really ready to buy because they’re at the beginning of their search,” Huntley explained. “They’re going to find out that if they smoke or they are overweight for their age, it makes a difference. After a couple of searches they might look for something like ‘What does it cost for a 20-year term, half-a-million dollar policy for a 56-yearold smoker?’ That particular term has never been searched for in the history of mankind and that’s where I live.” That address is in the Land of the Long Tail. WHY LONG TAILS MATTER The long tail in an SEO search graph is the far end of a slope, like a swoop of a bird gliding in for a landing from a very high place. The high, left end of the graph is where a majority of searches go because they are very general. The right, low end of the line is where very few searches go because they are very specific. Cooke described the swoop in terms of life insurance. “Draw a graph, an x-axis and a y-axis, like an L,” Cooke began. “On the x-axis along the bottom, you’re going to write the words ‘life insurance.’ How many times do people do a search for life insurance? That point would be way up the x-axis. Then the next data point would be ‘term life insurance.’ That would be lower to the right of ‘life insurance.’ Then the terms would follow that lower and lower,

How to Generate an Endless Flow of Referrals from CPAs and Attorneys

Referrals are the lifeblood to a strong business. Having quality names at your disposal will help you create a strong vibrant business vs. a business that is running on thin air.

Referrals are the lifeblood to a strong business. Having quality names at your disposal will Attend help youThis create a strong vibrant FREE Training businessWebinar! vs. a business that is running on thin air. One of the top advisors and a bestselling author reveals the exact system his clients are using to get referrals from CPAs and Attorneys. His method is already working around the country: • One client has 17 divorce attorneys sending him business • Another client has 10 CPAs and nursing homes referring folks to him Attend his live training webinar exclusively for INN readers. Discover exactly how he does it and start getting referrals from CPAs and Attorneys!

Attend This FREE Training Webinar!

www.ultimatemarketingmagician.com/inn

FEATURE CRACKING THE CODE TO ONLINE SUCCESS until you get to the far right where it’s ‘life insurance agent in Harrisburg.’ ” Good luck trying to rank high on the search term “life insurance” itself on the left end. That’s the province of insurance companies and news sites, such as InsuranceNewsNet. The money is on the right side of the graph. “We want to rank on searches for ‘life insurance brokers,’ ‘life insurance for Type II diabetics,’ ‘life insurance for insulin-dependent diabetics,’ ‘life insurance for diabetics taking metformin,’ ‘life insurance for overweight diabetics in Harrisburg,’” Cooke said. “How many people search for those? Not many. But you know how many people are competing on ‘term life insurance for Type II diabetics’? Not many. You can rank on that. It’s much easier to rank on many very granular, long-term search terms.” Not only is there little competition in the long tail, there is also quite a bit of traffic. “Something like half of the search terms out there are on the long tail,” Cooke said. “And this is where people are in the buying cycle. These are better leads than people who are searching for just life insurance.” WITH A LITTLE LINK FROM YOUR FRIENDS But even if advisors type their fingers bloody writing about all these niches, it is not certain that Google will find them. The algorithm would like to see some social proof. That means getting other websites to link to the material. But the linking should make sense. For example, it would be logical if a website for a Boise, Idaho, cigar shop linked to an article about life insurance for cigar smokers written by a Boise agent. The same would go for an agent who has a general practice to link to an article from another agent about a particular issue. That would be more of an organic link. But many of the tricks of buying links are not working anymore. Google has wised up over the years. 30

Ryan Pinney has seen the tricks come and go in his long career in Internet marketing, which started only a couple of years after Google itself began. “In 2001, my father got this wild, crazy idea to offer life insurance over the Internet to anyone who wanted to buy it, no matter where they were in the country,” Pinney said. “So in January of 2002, we launched a website called WholesaleInsurance. That website was one of the first online marketing websites for consumers

to be able to interact with an online quoting tool, see pricing from multiple companies and potentially buy insurance, or at least request that someone help them buy insurance. I don’t think they knew how successful that was going to be.” They added an agent to their Roseville, Calif., office to handle the requests for applications, but the entire office was overwhelmed when 1,000 requests came in during the first month. “These were people who had gone online, quoted themselves, looked at our product and said, ‘I want to buy this. Send me an application.’ And so, as you

InsuranceNewsNet Magazine » November 2015

CRACKING THE CODE TO ONLINE SUCCESS FEATURE can imagine, one person is really hardpressed to fill 1,000 orders,” Pinney said. The office hired more people, and they were off into Internet marketing with a bang. “That experience launched what has been our practice for the past 13 or 14 years, which is figuring out more effective ways to offer insurance, follow up, use tools or create tools. Everything from e-signature and e-applications to automated follow-up systems to

marketing and remarketing and follow-up processes with consumers. All this stuff that didn’t exist before, we had to figure out along the way and build ourselves.” Another skill to learn was SEO. In the early days of Google and less competition online, it was easier to pop up to the top of Page Ranks. “I would say into the mid-2000s, our real key was that our sites ranked very, very well on Google,” Pinney said. “So when someone would type in one of several hundred search terms, our websites would come out toward the top, if not

No. 1. In 2011-2012, that got a lot more difficult, because Google started changing their algorithms at a much more frequent pace.” Major sites were penalized for a variety of reasons. Some had to do with various tricks such as buying links, because they tended to follow predictable patterns that Google could spot. But local sources with legitimate content were favored in rankings in a triumph for local SEO. “The big Internet marketers — ourselves, SelectQuote, AccuQuote — many of us have not done a good job on local optimization, because it takes a little more time to do it for the top 200 cities or locations. An individual agent could easily do it on a local level, but they’re not. So it’s this vacuum right now where the handful of guys who we see doing it are having really good success.” “I’M NOT IN THAT MARKETSPACE” Isn’t most of the business off the Internet small term policies where volume is the name of the game? “It’s probably one of the most asked questions out there,” Pinney said. “I think a lot of people assume that it’s small term business, and ‘I’m not in that marketspace. and I don’t want to do it.’” But Pinney said he has seen cases getting bigger as consumers have become accustomed to doing business online. “When we first started out, that was probably true,” Pinney said. “But the first case we did that was over $100,000 of annual premium was online. Never met the client. We offered to fly across the country to deliver the policy and meet the guy in person. He said, ‘I’m sure you guys are all nice people. I would rather not.’ That was in 2004.” But now that is typical, he said, “Today, we see large cases like that every single month. In 2004, it was like, ‘Wow, I can’t believe this just happened.’ Now, it’s relatively commonplace.” Most of the big cases originating online come from estate-planning clients.

November 2015 » InsuranceNewsNet Magazine

If success is your objective, make MDRT your goal. The benefits of MDRT membership are now even better. Members now have online access to careershaping insights in the Resource Zone on the new mdrt.org.

To learn how to become a member of MDRT, visit joinmdrt.org.

FEATURE CRACKING THE CODE TO ONLINE SUCCESS

Check out our Tech Guide Special Section » PAGE 35

Not only do they arrive with big needs, they come ready to buy. “The online piece of it is really referral without a destination,” Pinney said, noting that the clients find them through sites optimized for estate-planning and complex needs. “Some estate-planning attorney or tax accountant somewhere has advised their clients that they need to get insurance. ‘Hey, you need $5 million of survivor insurance to put into this fancy trust I’m going to make for you.’ When the client asks, ‘Where do I get that?,’ the lawyer says, ‘I’d go to Google,’ because they don’t have a relationship with a local advisor.” Those clients typically need coverage with premiums in the six figures or more. Pinney’s answer to advisors who say they don’t need to be active online is that they have pretty much checked out of the business. “Today, the default answer for everything these days has become ‘Google,’” he said. “If you don’t know the answer, whether it’s an argument or a conversation or a date, it doesn’t matter. Everyone’s answer is to pull out the phone and Google it.” So, if you’re not there, you’re not the answer.

Jeff Root in Austin, Texas, shares his Internet marketing insights on a podcast, where he interviews other experts such as Glenn Cooke.

InsuranceNewsNet Magazine » November 2015

I’M ONLINE, NOW WHERE ARE THOSE LEADS? Once advisors get active online and build content, they can run into two problems: Visitors don’t convert to actual leads, and many of those leads aren’t very good. The solution for the first problem is site design and the second is the advisors themselves. When Cooke discussed setting up the website, he mentioned that the key goal is lead conversion. But how does the site itself encourage that? Jeff Root, an independent agent in Austin, built an online business on content and is now helping other agents do the same. He has a following that regularly listen to his podcasts on his site, selltermlife.com, that include other agents who are successful online, such as Cooke. He has found through collected wisdom and testing that emotion captures attention, but a tightly focused funnel captures the lead. “Life insurance is an emotional sell,” Root said. “What we’ve found that gets them in the right mindset is an image that evokes emotion.”

CRACKING THE CODE TO ONLINE SUCCESS FEATURE For example, Googling “COPD” and “life insurance” will show Root’s site, rootfin. com, as one of the top results. Open it and a poignant image greets the visitor. Scrolling down to the article, the reader will see a photo of a man coughing. But next to that is the key that makes it all work. It’s the call to action, which is an instant quote form. The form remains at the right even as the reader scrolls through the article. “Most sites, if you scroll down the page, the call to action leaves,” Root said of other insurance agent sites. “When there’s no more call to action, they’ll get their information and leave.” The page has very few other actions available. The visitor either will fill out the form or just move on. This structure is consistent with that of many of the agents and advisors who have found success online. Others may have built in additional options for more information for visitors to learn more and perhaps to inspire a purchase. Maybe it’s other articles on the site or a report exploring the subject. The idea in that case is to get

visitors involved in the site and use it more as a resource to revisit. But our experts say it doesn’t work that way. Consumers go out looking for an answer, and once they have hunted down a solution, they want to act. “Agents want to say, ‘Download this free guide. Schedule an appointment with me here. Do this or that,’ ” Root said in describing the typical approach. “But, really, for anybody who’s researching life insurance online, if you can put just one call to action, ‘Get an instant quote right here,’ that is the biggest call to action that you can get.” But don’t stop there. Test the results. That’s what Root did to perfect what seems

like a stone-simple landing page. “The biggest color on that screen is ‘Display Quotes’,” Root said of the COPD page. “That is the brightest image on the page. It even lights up when you hover over it. We’ve spent a ton of money testing, and we’ve found this to convert the highest number of visitors.” Another important aspect is that the link brings the visitor to a landing page rather than a home page. “If you’re sending that traffic to your home page, you’re not going to get good results at all,” Root said, explaining that the many options on a home page distract visitors.

HELP THE NATIONAL LEADER IN THE FEDERAL SPACE MANAGE THE

$400 BILLION ROLLOVER OPPORTUNITY

FOR ADVISORS Who Want to Write Millions of Additional Annuity Premium in 2016 We will help you become THE EXPERT in the Federal Space and have people seeking you out for their retirement needs. When we work together we can: • Show you how Bedrock Financial Services can give you a 1st page Google ranking to increase your visibility AND close more sales • Ensure you have a constant flow of leads – we are THE SOURCE for the Federal and Postal Market • Increase your visibility and credibility with our two news channel affiliates • Put your marketing on autopilot with our proven marketing systems, and get your message in front of thousands of local buyers ... WE HAVE LEADS! Take the 1st Step to Dominating the Federal Space – Watch Our Video and Secure Your Territory:

www.PublicSectorProfits.com

November 2015 » InsuranceNewsNet Magazine

FEATURE CRACKING THE CODE TO ONLINE SUCCESS Root contends that a landing page crafted around the principles he described will convert one out of three visitors into a lead. Even if advisors are not yet generating significant Web traffic, a high-converting website can be an enriching partner to traditional prospecting. Once an effective landing page is set up, it is ready to harvest the fruit of local marketing. Ads on smaller local news sites can pay off if the relatively small number of visitors convert at a high rate. And those leads tend to be strong because they are

10-3-1 formula, but that doesn’t mean it is easy. “There are 10 names and phone numbers and five to six of them will be bad,” he said, explaining that “They’ll be Mickey Mouse, or somebody’s fax number, or wrong number or something. Five of them are good, and you’re going to pound on those five.” And he does mean pound. Cooke said he often hears advisors say they have tried the prospect and they aren’t getting back to them, therefore it’s a lousy lead. He said he will often take the same

Ryan Pinney was a pioneer in Internet marketing, helping his father sell insurance online in 2001. The business started with a bang and the Roseville, Calif., agency has been growing alongside the boom in online commerce ever since. generally people looking for an advisor they can visit around the corner. LOUSY LEADS? But what about the Internet leads? Advisors often complain they can’t ever reach them, and when they do, the consumer is not ready to consume. Each of the experts speaking for this article said they have heard these complaints and have the same answer: You have to work it. Cooke of Life Insurance Canada said the leads are not like a local referral. They require a different approach. First is a sense of perspective about the leads themselves. The Internet leads can outdo the old 34

lead and make a sale, but it’s not magic. It’s persistence. “A lot of advisors will call them once or twice and say, ‘The heck with it.’ We don’t,” Cooke said. “We have a system; we call them and call them and call them — eight to 10 times — until we get through. People are busy.” Some advisors might feel like that much calling could be considered harassment, but Cooke said it is not like the days of cold-calling where an agent is trying to catch a stranger’s attention during dinnertime. These are people who went on the Internet shopping for insurance and gave their contact information. They know an agent will be

InsuranceNewsNet Magazine » November 2015

Ryan Pinney discusses how to improve customer service in an MDRT column. » PAGE 72

calling them. But they are busy with work, kids and all the other distractions in today’s society. Another difference is that traditional sales closes don’t work as well over the phone with these prospects. They are more apt to simply hang up in those cases. Cooke said he asks questions to determine need and makes recommendations. He also assumes that the first call will not close the sale. “So I say, ‘OK, you need to go think about it, go discuss it with your spouse. I know you’re not buying today. You need to sleep on it. That’s why you’re on the Internet instead of speaking to an agent in person. So, can I follow up with you next week?’ Most of them say ‘sure,’ but if they say ‘no,’ I drop them.” Then it’s back to persistence. “I chase them, chase them, chase them, chase them again for a follow-up call,” he said. “Then I just say, ‘Have you decided how you want to proceed?’ It’s a soft close.” What are they doing between the first and second calls? They are talking to other agents, sometimes an agent they already have. Cooke said he assumes he is always competing but that he wins out by being the information source who didn’t pressure them once he got the prospect on the phone. Another problem he sees is that some advisors have a call reluctance. They will put the lead aside to call the next day when they are ready. Cooke said they may as well throw that lead away. “Tomorrow is too late,” he said. “I already sold them.” Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. He was also vice president of communications for an insurance agents’ association. Steve can be reached at smorelli@insurancenewsnet.com

DO YOU HAVE WHAT IT TAKES FOR ADVANCED SALES? FEATURE

Special Sponsored Section

While we still don’t have flying cars or holographic communication devices, advancements in technology continue to arrive at light speed. From entertainment devices to medical treatments to national defense, our sprint into the future often mimics science fiction, and our own industry has its own part in the story. In this year’s technology showcase, witness the many ways our industry’s latest tech provides solutions to problems both old and new, while also satisfying the consumer’s hunger for more, faster, safer, tech-driven and tech-forward.

CONTENTS The Tech You Need to Keep a Producer Producing................................................................... 36-37 Providing Life Support....................................................38 Tech-Based Marketing that Increases Closing by 53% – and Why Agents Aren’t Using It...................39 We’re Done Talking About Death................................. 40 Leave the Dark Age of Insurance Behind..................... 41 eMoney: Leading Through Innovation for 15 Years and Counting.....................................................45 Sagicor: Learn How Accelewriting Can Cover Your Clients in a Matter of Minutes........................46-47 November 2015 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section

The Tech You Need to Keep a Producer Producing Tim Owen knows firsthand that a producer needs to be able to stay out in the field selling. Before he became Vice President, Product Management at Vertafore, Owen was a life insurance producer and a registered rep. Since then, he’s had deep involvement from all sides and in all aspects of what he’s dubbed “producer lifecycle management.” In this Q&A, Owen discusses how Vertafore’s Sircon solutions can help carriers and distributors keep their producers producing.

Q: What is producer lifecycle management? A: Producer lifecycle management is actu-

Tim Owen - Vice President, Product Management at Vertafore

pending on that contract, the carrier will then have to get the producer appointed. The carrier is required by regulation to notify the producer that they have been appointed to represent them, but quite often, the intermediary organizations don’t get that notification. They are not in the loop if the carrier doesn’t have a strong procedure or technology to help streamline the process. They may not get information to the BGA or the retail agency. Then you have the BGA waiting on information from the producer who may forget to send it to them. There are a lot of opportunities for communication failures.

ally a term we developed with the help of a Q: How does the Sircon focus group. We saw all the various pieces in software prevent these JUST IN: the process of getting authorized to sell and issues? Survey Results! we recognized that there is more to it. There is truly a life cycle to a producer’s selling career A: Sircon software, combined with Good producers are rare and valufrom a credentialing and relationship manour services, helps manage the enable. Are you taking care of yours? agement perspective. So we worked with that tire process of producer lifecycle Vertafore just wrapped up their focus group to figure out what term to call management. It takes care of the comprehensive Agent Experience it and we came up with “producer lifecycle pieces in the process that were not Survey and are sharing the results with InsuranceNewsNet Magazine management.” previously fully automated or we readers. Learn more about Sircon The goal is to get producers authorized to handle them on behalf of an agenand download survey results for sell insurance, keep them authorized to sell cy or carrier through our services. free at www.SirconPLM.com. and establish the relationships between core We have a national solution that stakeholders in the process. In addition to supports all 50 states, plus the oththe three core stakeholders, which are the agency, the individual er jurisdictions, for insurance, and we now do securities registraproducer and the carrier, there are other stakeholders, including tion management for those who are selling a variable annuity or a trainers and education providers as well as the state regulators who variable life product. regulate insurance producers. It’s a big challenge to tie together all We have solutions for the agencies and the BGAs and the IMOs, these pieces throughout a producer’s career. and we have solutions for the carriers to interact with the producers in order to get them contracted and authorized to sell and to Q: What are the main frustrations that carriers keep them authorized to sell. By servicing all of the stakeholders, we provide an end-to-end set of solutions that aren’t available anyare experiencing regarding producer lifecycle where else. It’s a multiparty workflow with all the states’ and jurismanagement? dictions’ appointment and regulatory rules built in so you don’t have to be an expert. We walk you through the process step by step A: I’ll just give you a simple example. Let’s say a producer is signin an easy interview style so you don’t have to worry about the variing up to sell for a new life or annuity carrier through a broker genations from one state or one carrier or one agency to the next. We eral agent. They get contracted with the BGA and the BGA consweat the details so you don’t have to. tracts that individual with the carrier. If it’s in a state where there is an appointment required or if that producer already has business 36

InsuranceNewsNet Magazine » November 2015

Technology Issue • Special Sponsored Section

Q: How easily do the Sircon Solutions software and services integrate with other software and automation processes?

How Vertafore Improves the “Agent Experience”

A: That’s actually one of the key sets of capabilities that we bring to

Vertafore is the insurance industry’s leading provider of connected technology and information solutions, serving over 20,000 carrier, agency and MGA customers as well as 22 states’ departments of insurance.

bear. The first thing that is important to understand is all the things that we do with the regulators require integration, so we have deep integration with all the various regulatory bodies. States actually use our technology to run their departments of insurance. We also work with the key intermediaries in the insurance and the securities industry including the National Insurance Producer Registry and the Financial Institution Regulatory Authority on the security side of the house. We integrate with DTCC and third parties such as background investigation firms and annuity order entry firms. And we integrate deeply with carrier back office products, including compensation systems, policy administration systems and new business systems. All towards our goal of end-to-end automation wherever possible.

Q: What burdens does Sircon remove from producers? A: We remove the burden of keeping track of all the information and handling all the interactions with the various stakeholders that producers are required to interact with, and we help reduce the risk of them being out of compliance or losing their license.

Q: What does this mean for carriers? A: Producers, as you know, are in this business to help clients and

earn a living. For these things that are not top-of-mind, they expect a simple and efficient process. They don’t want to rekey information. They don’t want to be asked the same question over and over again. Producers don’t want to have to know everything that’s unique for each carrier to figure out how to get contracted. They expect carriers to provide an experience that is simple, easy and efficient so they can stay out selling and not have to worry about these details. For life and annuity carriers who sell products through various independent distribution organizations, the first experience a producer has with you is likely the process of getting onboarded and appointed or authorized to sell your products. If that first experience is poor or frustrating with time delays or asking questions that these producers have already been asked time and again, or seeking information that, frankly, you should already have access to, that experience will indicate to the producer or the advisor that they are going to be working with an organization that is not leading-edge. They’ll then automatically assume that they’ll have similarly cumbersome experiences when it comes your application processes, new business, commissioning processes and other important downstream processes. So, their first experience needs to be a strong one. Producers have choices. They are selling other carrier products, and if you want them to sell yours, you need to make every experience that they have with you top notch. If it’s not, they will find another solution.

Their numerous products and services designed to promote connectivity include several that substantially improve the agent experience:

SIRCON SOLUTIONS » Carriers and agencies establish and maintain selling credentials. » Authorization to sell is verified, keeping business moving forward by eliminating regulatory roadblocks to selling. » Automated onboarding improves the agent experience. » Compliance risks for the entire industry are reduced.

REFERENCECONNECT » Have a single source of web published content. » Publish content directly to the agent portal. » Be positioned as the carrier of choice with content that agencies want.

IMAGERIGHT » The Enterprise Content Management solution is specifically for the insurance industry. » Intelligent workflows allow for added flexibility. » Avoid bottlenecks and boost productivity with real-time insights. » Access anywhere, anytime with a mobilefriendly interface. » Have complete file view and easy implementation.

Learn more today and download the newly-released Agent Experience Survey results at www.SirconPLM.com.

November 2015 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section FEATURE DO YOU HAVE WHAT IT TAKES FOR ADVANCED SALES?

Providing Life Support

How One Organization’s Technology Infrastructure Can Help Keep the Life Industry Moving … Safely

he entire life insurance industry relies on data. From client medical records to commission payments, data is critical to every part and player in the lifecycle of a policy – and the data is constantly on the move. The movement of critical, time-sensitive and confidential information requires the right technology to traffic and protect data. Without a trusted, centralized provider of this technology, the industry is hampered by slow, disparate, error-prone processes that expose all involved to a host of risks. One company, The Depository Trust & Clearing Corporation (DTCC) has proven it can handle the massive amount of data moving across the industry each day, safely, by making technology and security a priority. “DTCC has a robust, connected infrastructure that the financial industry relies upon to securely transmit data, speed processes and drive down costs,” observed Kevin Lewis, Vice President of DTCC’s Insurance & Retirement Services (I&RS). “Our SIFMU (Systemically Important Financial Market Utility) designation came as little surprise given the sheer breadth and criticality of the services we provide to the financial services industry.” DTCC is the financial industry infrastructure that, through its subsidiaries, established and facilitates standardization and automation of data and fund processes for annuities, mutual funds, fixed income, equities, derivatives and other asset classes worldwide. The company’s data processing capacity is astounding, with about $1.6 quadrillion in securities transactions processed in 2014 alone. DTCC’s I&RS has served the insurance marketplace since 1997, processing more than 13 billion insurance transactions in 2014. I&RS provides a trusted, central infrastructure for insurance carriers and distributors, acting as a single conduit for the exchange and maintenance of information. Data travels safely through DTCC’s Securely Managed and Reliable Technology (SMART) network, the technology backbone that supports the settlement infrastructure of the U.S. capital markets, connecting a global complex of networks, processing centers and control facilities. I&RS also offers processing capabilities over secure, distributed web connections that are especially well-suited for smaller-sized firms.

Tools for Life

The life industry can leverage I&RS’ technology-based services for a variety of data communication needs, including: • Transmitting policy and financial transaction data needed for a holistic view of client accounts • Settling life premium payments and systematic transfers • Facilitating essential agent licensing data between carriers and distributors • Data reporting to aid regulatory compliance • Consolidating and expediting commission payments DTCC’s standardized approach allows for streamlined processes using fewer resources, reducing cost and risk for the industry. For example, without I&RS’ Commissions service, many agents struggle with inconsistencies in when and how they get paid. Carriers generate payments in a variety of formats, sometimes using manuallygenerated spreadsheets for tracking and involving multiple departments and people. Funds are sent to agents via distributors by wire or 38

InsuranceNewsNet Magazine » November 2015

mailed paper checks – which can be mishandled – in varying payment cycles. The process can take weeks from the sale and is prone to errors, which are difficult to correct. Add to this the burdens of shipping cost and time. With I&RS’ Commissions, agents receive payments within one day of a sale, in consistent, consolidated electronic formats. Additionally, carriers can resolve errors and complete charge backs more efficiently. The standardized approach eliminates custom feeds, paper statements and snail mail, making the process easier for all parties. This one example demonstrates the drawbacks to a proprietary, manual approach. Industry participants can gain numerous advantages throughout the policy lifecycle with greater adoption of I&RS’ technology-based services: 1. Faster processing times. When a single standard is in place – like the one DTCC’s I&RS team developed based on existing ACORD® standards – a hardship is lifted from distributors and financial advisors, who no longer having to master multiple systems to process policies. Automation also saves time by eliminating mailed paper checks and complicated spreadsheets, processing commissions daily, eliminating human error and providing immediate data on licensure and financial reporting. 2. Cost savings. With multiple processes and ways of sending information comes the need and expense of staffing. There is also document shipping or even the loss of business when policies fail to be issued before a death or a client decides to seek coverage elsewhere. 3. Greater product availability to consumers. Automation and standardization allow firms to reallocate resources, previously spent on staffing, to invest in product development or producer training to enable expanded product offerings. They also remove a barrier that prevents distributors from offering a greater variety of products – when once they shied away because of difficulties in following a separate process for each transaction partner. With I&RS services, adding carriers no longer brings so much extra work. 4. Reduced risk. In last month’s article, “How Well Is the Life Insurance Industry Managing Data?” risks that were exposed included delayed processes, lost time and resources, missed market opportunities, damaged business relationships, consumer identify theft and fines. I&RS straight-through processes help to mitigate risks and concerns. The industry is starved for these solutions. As a user-owned and -governed firm, DTCC is inherently dedicated to the protection, growth and prosperity of the insurance marketplace. With such a powerful utility in place, all that remains to reap the benefits is collaboration among life insurance carriers and distributors with DTCC.

Drive Standardization Join DTCC and help reduce risk in the life insurance marketplace. Learn more today at www.dtcc.com/ standardizelife or email insurance@dtcc.com.

Technology Issue • Special Sponsored Section

PREDICTIVE PROSPECTING FEATURE

Tech-Based Marketing that Increases Closing by 53% – and Why Agents Aren’t Using It With so much marketing now being conducted in the digital space, and with such a broad variety of outlets to use (from personal email to integrated social media campaigns), it’s no wonder that business executives across industries are buzzing about marketing automation. What makes it especially enticing is that once it gets going, very little human involvement is needed — if any at all, and it can make a lot of money for companies of all sizes. According to an article on Forbes.com1, using marketing automation typically increases qualified leads by about 450 percent. Add the fact that conversion typically increases by 53 percent, and the lucrative power of marketing automation becomes staggering. So why aren’t more life insurance agents using it? There are three main reasons they’re missing the boat. For one, many mistakenly think they are already using marketing automation, not realizing that it is much more than mere email drip campaigns. Secondly, the cost and logistics of the CRM integration can be hugely intimidating if not downright prohibitive. Finally, they simply may not have access to the right system, with giants such as Hubspot and Marketo not always being appropriate for small businesses and oneagent shops, and also with industry-specific options being in short supply. The thing is, all three of these obstacles no longer stand up. Wellknown industry tech innovator, Bill Levinson of Levinson and Associates, has invented a comprehensive platform called the Levinson Agency Automator, which is specifically for life insurance agents and is simple for agents to obtain and utilize. If you’re still wondering what marketing automation even is, it is everything that the Levinson Agency Automator does. Jeffrey L., an agent in Florida, describes it best: The Agency Automator allows my team less time focusing on the time-consuming, yet necessary tasks that eat up our day. Any time a prospect enters our sales cycle, whether through social media, online forms, or traditional advertising, we can assign them to a pre-built marketing campaign that nurtures them from shopper to buyer. They enter an automated chain of emails based on the actions they take, whether with the emails or on our websites, so each prospect gets a personalized journey. Most of these marketing campaigns are prebuilt. Also, with a drag and drop campaign builder and email design tool, we can easily create our own campaigns that match our sales cycles. We spend a maximum of 20 minutes each day managing all this. We also spend less time calling bad internet leads and more time dialing hot ones.

Levinson had gained notoriety as a tech innovator with his Sell While You Sleep product line, consisting of more than ten products that agents can literally sell while they sleep. They simply add a link to their website, social media or email, and consumers can run a quote, purchase and print a variety of life and health products with zero agent involvement.

1-800-375-2279

The “actions” on which the Agency Automator campaign direction and redirection are based include whether or not someone runs a quote, if that person purchases (in which case an upsell campaign begins), or if he or she abandons the cart. If a policy isn’t purchased, the Agency Automator launches a campaign based on where the prospect exited the process. Learn more about the full Sell While You Sleep product line at www.InsuranceTechUpgrade.com.

The entire system includes these “trigger website emails,” as well as trigger follow-up emails, plus Facebook and LinkedIn campaigns, automated monthly newsletters and much more. Everything is mobile-friendly, on both the agent end and the consumer end. And while this whole system was devised to drive traffic to the Sell While You Sleep product line [see more on this below], it can be used to market any product in an agent’s full line. According to Forbes1, more than half of companies that are surpassing their competition are using marketing automation. With such a market-leading edge, the proven surge in sales, plus the obstacles being removed at last, you’re probably just wondering where and how to get started.

For a limited time, Levinson has a 14-day trial of Agency Automator available. Start yours today at

www.InsuranceTechUpgrade.com. New “Sell While You Sleep” Product to Be Announced Soon Official word had just been issued that the guru of tech-based insurance products, Bill Levinson, will be issuing his latest zero-agent-involvement life product this winter. Last year, his Lightning Issue TermTM took the industry by storm. It was the first-ever instant-approval, zero-agent-involvement term product, easily sold directly from an agent’s website, social media or email through a custom link. Consumers can run a quote, get approved and print their own policy in a matter of minutes. This is the unprecedented accessibility of term life that changed the industry. Now, Levinson plans to release a Level Guaranteed Term product on the same Sell While You Sleep platform. A product like this has never before been offered through an online, instant-approval platform, so the buzz is understandably high. Preliminary intel points to January 2016 as being the release date and you can make sure you’re among the first to offer it — simply reserve advance access at www.InsuranceTechUpgrade.com today. 1

Forbes article available here: http://bit.ly/1McLaeu November 2015 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section

We’re Done Talking About Death

How John Hancock Is Using Technology to “Change the Script” of Life Insurance Sales

ife insurance is a tricky topic to address with clients. You’re talking about someone’s mortality, which most of us like to avoid thinking about. But what if discussing life insurance didn’t have to be so challenging anymore? What if you could change the conversation by making it about living? Now, John Hancock is making this a reality with the introduction of the John Hancock Vitality solution. It’s a new kind of life insurance that rewards people for healthy living. PUTTING THE FOCUS ON LIVING HEALTHY The John Hancock Vitality solution helps people secure their financial future while pursuing a longer, healthier life. The program leverages modern technology like wearable devices to incentivize people to take a more active role in their health. In fact, the healthier their lifestyle, the more opportunity they have to save on their premiums and earn valuable rewards and discounts. Clients who purchase a life insurance policy with Vitality complete a simple online health review and receive personalized tips and recommendations for lifestyle improvements. These policyholders Consumers are then receive a free Fitbit device to enthusiastically embracing track their progress. The more a polthis program, thrilled to get icyholder engages with the program, a free Fitbit® tracker, and benefiting with better health the more “points” they earn. Points accumulated each year determine and desirable incentives. their Vitality Status. The higher their Vitality Status, the more they can save on premiums and the greater their rewards and discounts — on things such as fitness gear, cruises and hotel stays, a popular selection of gift cards and more.

“It’s refreshing. It’s dynamic. It’s innovative. And it’s fun to talk about.” For Financial Professional Use Only. Not for use with the public. John Hancock Vitality Program rewards and discounts are only available to the person insured under the eligible life insurance policy. Rewards may vary based on the type of insurance policy purchased for the insured (Vitality Program Member), the ownership and inforce status of the insurance policy, and the state where the insurance policy was issued. Premium Savings will apply based on the Status attained by the life insured. Insurance products are issued by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02117 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. Vitality is the provider of the John Hancock Vitality Program in connection with life insurance policies issued by John Hancock. Insurance policies and/or associated riders and features may not be available in all states. MLINY100915063

InsuranceNewsNet Magazine » November 2015

A MORE POSITIVE AND ENGAGING CONVERSATION Consumers are enthusiastically embracing this program. For producers who are selling life insurance with the program, that means an entirely different selling atmosphere. First, the conversation has changed — from what happens after death, to what’s happening while someone is still alive. It also totally repositions the producer — from a salesperson simply selling a traditional life insurance policy, to a partner who cares about their client’s financial needs as well as their health and happiness. As one producer put it, “It’s refreshing. It’s dynamic. It’s innovative. And it’s fun to talk about.” And John Hancock’s Vitality Program is an incredible business-building opportunity. The program appeals to a wide range of demographics. It’s a great way to reach Millennials, with whom wearable devices are extremely popular. Even Boomers, who are incredibly health-conscious, have little difficulty recognizing the perks of the program. Best of all, the program isn’t just for fitness buffs. The wellness goals are easily achievable by a broad demographic, with points earned for simple activities such as completing an educational online module, visiting the dentist, abstaining from tobacco or getting a mammogram. A GREAT SOURCE OF REFERRALS Another reason the Vitality Program can help producers grow their businesses is that it’s ripe with referral opportunities. For example, the wide range of ages that it appeals to makes family referrals more likely. Plus, clients are actually wearing a conversation piece. As people talk about their Fitbit trackers (or any of the various other wearables that integrate with the program), it’s only logical they’ll mention the tie to their John Hancock life insurance policy with Vitality. While producers can enjoy the relationship-building, business-growth and altruistic benefits of offering life insurance policies with Vitality (which currently include universal life, index universal life and term life), they don’t have to take on any additional burden of implementing the program with their clients. The application process is typical, and once the policy is delivered to the client, John Hancock and Vitality manage policyholder engagement in the program. In our current age of technology, the life insurance industry is quickly advancing. Now, with the John Hancock Vitality Program, technology is finally enabling an improvement in consumers’ experience with and feelings about life insurance. By steering conversations from the topic of death to one of living a longer, healthier life, it has truly changed the script. If you’re a producer who wants to have a new, exciting conversation with your prospects, if you want to build stronger client relationships by truly caring for your clients’ welfare, and if you want to grow your business with a tech-forward program that consumers are buzzing about, visit JHRedefiningLife.com today.

Technology Issue • Special Sponsored Section

Leave the Dark Age of Insurance Behind Using Technology to Simplify the Selling of Insurance

re you in the dark about the state of your business? Many of the most successful producers tend to be the least organized. It’s a serious hassle to know how much production you have done, track cases when selling through multiple carriers, know when and how much you are getting paid, let alone know what exactly is going on with your case. Luckily, there is technology that can simplify the selling of insurance. BackNine, a complimentary insurance management system, offers agents and agency managers unprecedented visibility of commissions, downline activity, payments, caserelated information, applications and quotes. All in real time and accessible from any computer, tablet or smartphone, with simple setup and at no cost. The management system is the brainchild of BackNine Insurance and Financial Services, Inc., a family-run general agency specializing in life, long-term care, disability and annuities. Mark Tattersall, BackNine’s principal with over 40 years of success and experience in the industry, ran his agency with a traditional approach of building relationships. It’s difficult keeping track of all those relationships, knowing who the beneficiary is, when the policy conversion expires, inforce policy values, etc. His sons, Brett Tattersall and Reid Tattersall, CFP®, CLU®, ChFC®, CAP®, witnessed the successes of their father but recognized these industry inefficiencies. By looking at what was preventing him from selling to his full potential, they identified an opportunity to use technology to automate organization and planning, thus BackNine was born. As an independent agent, you are responsible for nearly every aspect of managing your business. You may have all the skills to sell but don’t have the necessary resources. BackNine becomes your staff: your secretary by providing notifications (case reminders, conversion dates, contracting appointments, etc.), and your internal staff to provide quotes, illustrations and applications. It links you with your case manager, who sees your

CASE STUDY: BROKER DEALER case through underwriting » Disorganized and provides transparency » Lack of oversight throughout the entire pro» Production disconnect » Confusion of internal vs. external business cess, and it connects you » Inability to monitor cases with a personal brokerage CASE STUDY: AGENT director who is your part» Lack of staff ner in the industry, keeping » Stuck “micromanaging” cases you informed about the latest » Difficulty preparing strategies. for appointments » Short on strategies One of the biggest issues broker dealers face when selling life insurance is overseeing their downline. BackNine gives the user the ability to see what everyone in their downline is selling, who is selling internally versus externally, while tracking and having the ability to set commissions for each representative. More information allows the organization to better under“I would have earned stand the challenges facing their company, enough to be retired if producers and clients I had access to a system to provide maximum like this earlier.” value. — Martin Fishman, Founder of The transition to Fishman & Associates BackNine is simple. The team at BackNine syncs and updates all data so there is no extra effort needed on the part of the agent or agency owner to keep their business organized. In addition, BackNine offers education, custom marketing materials and the ability to easily transition to successors. There is an incredible amount of confidence that comes with being sure of your business — knowing exactly where you are, what’s going on with your cases and where your money stands. Why not make life easier on yourself by delegating tasks and freeing up more of your time with this complimentary resource? We invite you to leave the dark ages of insurance and join the Technological Renaissance with BackNine.

www.Back9NeverMiss.com

Reid Tattersall

Mark Tattersall

Brett Tattersall

TECHNOLOGY MARKETPLACE

CANNEX is the leading provider of retirement income information including:

Building Client Relationships Is the Key to Your Success

• Comparative Rates & Illustrations: - Income Annuities (SPIA, DIA) - Income Riders (VA, FIA, Fixed) - Fixed Rates

Advisors Assistant, the Ultimate in Client Management Software, makes it easier than ever to stay in touch and build stronger and more meaningful relationships with your clients. It also helps increase sales and streamline office efficiency. Put Advisors Assistant to work NOW and watch your business grow and prosper!

• Product Allocation Support: - Model Portfolio Development - Consulting Services

www.AdvisorsAssistant.com 800-799-4267

For more information contact CANNEX at 800-387-1269 or cannex@cannex.com

Need a single resource to keep you on top of annuity and life insurance products, including: • rate changes, • product changes, • state approvals, • product comparisons, and more?

LookToWink.com gives you all of this in a single page!

Excellent customer service, unparalleled competitive intelligence!

www.LookToWink.com (855) ASK-WINK

Tracking Insurance Risks and Investments eNoah helps find a goldmine in your data pile! Accurate and compelling dashboards that integrate live feeds, dormant and processed data. Combined with eNoah’s intuitive dash-boarding services makes your challenges look simpler. eNoah’s business intelligence services enable you to identify scenarios that reduce loss, identify hidden opportunities to excel in business and to make faster decisions. All this with an arm of a BPO to get your processes managed too! Get in touch with us to get better focus on your business.

www.enoahisolution.com/industries/insurance/

Leading Through Innovation for

15 YEARS AND COUNTING At eMoney Advisor, we believe technology should support financial advisors, not replace them. So weâ&#x20AC;&#x2122;ve made it our mission to be the best at what we do, so that our advisors can be the best at what they do. To learn more about how eMoney can support your business, visit emoneyadvisor.com or join us at our 2016 eMoney Advisor Summit, September 21-23.

By the time you finish reading this, your client could be insured.

Sagicor Life Insurance Company is rated “A-” Excellent by AM Best Rating Company ability to meet its ongoing obligations. *Issuance of the policy may depend upon the a 4750

FOR PRODUCER USE ONLY. NOT FOR U

Sure, we know what you’re thinking. Yeah, right. But here’s the thing. It takes the average person around one to two minutes to read 300 words. That’s about how long our approval process takes. So by the time you finish reading this, your client could be insured. For life. Ready? Read on. Think back. Remember that time you said, “if only the life insurance approval process didn’t take weeks, or even hours?” Well, we do. You may have thought that no one heard you, but we did. Not literally of course. It’s not like we were eavesdropping on your water cooler conversations or anything, but word on the street is that getting life insurance takes too dang long. On a good day, it can take hours. A bad day will ✔ FAST eApplication set you back weeks. But at Sagicor – cue drum

✔

Fast eApplication* Our eApplication eliminates the third-party telephone interview, allowing you to meet with your client in person or by phone. It also eliminates the need for attending physician statements, bodily fluid tests or para-medical exams. The eApplication with electronic signature ensures the application is in good order before you submit it. Fast Underwriting Review & Decision Imagine a process that takes minutes, instead of hours or days. Thanks to our robust automated rules engine, you’re getting our best underwriter, on their best day, every day, 7 days a week. And you’re getting the underwriting decision back within minutes. Fast Policy Delivery Using Accelewriting® allows us to give you the underwriting decision within minutes; issuing your client’s policy faster and paying your commission sooner.

roll – we developed a new state-of-the-art automated underwriting system called Accelewriting®. It dramatically speeds up our application process, underwriting review and decision, and policy issue. Like, faster than two Whew. Almost there. Just. A. Few. More. Words. shakes of a lamb’s tail fast. No more drawn-out That should do it. Ding! FAST underwriting review and decision application. No more waiting weeks for approval. Fancy that. Impossible?! Check this out.

✔ FAST policy delivery

1 to 2 minutes of reading time. That’s all it takes. Your customer could be insured right now. When it’s this fast, why waste your time – or your client’s – anywhere else?

LEARN HOW ACCELEWRITING® CAN COVER YOUR CLIENTS IN A MATTER OF MINUTES AT SagicorLifeUSA.com/accelewriting, OR CALL 888-SAGICOR EXT. 4680.

(4th best out of 16 possible ratings). This rating is based on Sagicor’s ﬁnancial strength and answer to the health questions set forth in the application.

USE WITH THE GENERAL PUBLIC.

S1000515

LIFEWIRES

For Life Insurance, Online Doesn’t Mean Cheaper Everything is cheaper when you buy it off the Internet, right? Wrong, according to LIMRA. Just because life insurance is available online doesn’t mean that it’s less expensive than buying coverage the traditional way. LIMRA’s Insurance Barometer Study revealed that only 7 percent of consumers surveyed thought that insurance purchased online would be more expensive than coverage bought in person. But buying coverage online actually could cost consumers more money, according to LIMRA. What consumers don’t understand, LIMRA said, is this: Buying life insurance typically involves a rigorous underwriting process, so insurers can see what kind of risk they’re taking on by issuing a policy. But online, life insurance companies often use something called “simplified underwriting.” To save time, it usually means no medical exam is required. Instead, a limited number of health questions are asked, and then those responses are verified. This means the steps are fewer and policies are issued much more quickly. But for healthy, young individuals, this could mean paying more for coverage than they would if the life insurance were fully underwritten.

GENWORTH TO SELL SOME TERM LIFE TO PROTECTIVE

In what it said was another step toward increasing its financial flexibility and strength, Genworth announced it would sell certain blocks of term life insurance to Protective Life. Genworth will continue to administer and service the policies, which represent approximately $108.7 billion of term life insurance in force backed by approximately $2.3 billion of statutory reserves as of June 30. The company said that this move is a way for it to generate capital from low-return blocks of business. Genworth expects to generate between $100 million and $150 million in the deal, which is expected to close in the first quarter of 2016.

VOYA TO SELL 155,000 POLICIES

Voya also is shedding some of its life policies. The company will sell 155,000 term life insurance policies to Reinsurance Group of America. The policies represent about $90 billion of in-force life insurance. DID YOU

KNOW

Voya is framing the deal as a redirection rather than an exit from the life business. As Voya chairman and CEO Rodney O. Martin Jr. put it in a statement, the transaction will help improve returns in the company’s ongoing business “while also enabling us to free up more than $230 million in excess capital.” Under the agreement, Voya will continue to administer and service the 155,000 transferred term life policies. When the transaction closes, most likely in the fourth quarter, Voya’s insurance subsidiaries will still have more than 950,000 policies representing approximately $270 billion of life insurance in force, the company said.

CONSUMERS RECOGNIZE INSURANCE AS WEALTH PROTECTOR

Most consumers recognize that life insurance will replace the family breadwinner’s income after their death. Now more consumers recognize that life insurance also protects the family’s wealth. Nearly three-quarters (74 percent) of Americans believe that life insurance coverage is an important step toward protecting wealth, according to a

More than 90 million American workers have life insurance offered or made available to them through an employer. Source: LIMRA

InsuranceNewsNet Magazine » November 2015

QUOTABLE Clearly Americans see the importance of life insurance, yet it’s often viewed as a longer-term safety net, and therefore not always considered on the list of day-to-day financial priorities. — Mark Konen, president, Insurance and Retirement Solutions, Lincoln Financial Group

Lincoln Financial study. The report also indicates life insurance owners are significantly more likely than non-owners (75 percent versus 64 percent) to feel “in control,” a mindset that combines how comfortable respondents feel about their overall life, personal or family life, health and financial future. The Lincoln Financial study also found that nearly one-third of Americans believe they should be putting more money into life insurance. This sentiment is notably evident among younger generations: 41 percent of millennials and 37 percent of Generation X think they should be putting more money toward life insurance.

NEW PRODUCTS HIT THE MARKET

A feast of new products have hit the market recently. Here is a sampling. Securian has launched VUL Defender, a new variable universal life insurance product designed to provide a competitive lifetime guaranteed death benefit. VUL Defender is for clients seeking guaranteed death benefit protection at a more affordable price. MassMutual has introduced guaranteed acceptance life insurance to help consumers pay for final expenses such as funeral costs, remaining medical bills or other consumer debt. Guaranteed acceptance life insurance is a non-participating whole life insurance policy that will not be eligible for dividends.

Some Things are Better Together Call your marketer to partner with a strong company that helps you achieve more. Full portfolio of insurance and annuity products Medicare Supplement • Life • Long-Term Care • Disability • Cancer, Heart Attack, Stroke • Critical Illness Quick Appointment and Commissions Dedicated Team of Underwriters and Sales Support

Insurance products and services are offered by Mutual of Omaha Insurance Company or one of its affiliates. Products not available in all states. Each company is solely responsible for its own contractual and financial obligations. AFN47216

For producer useMagazine only. November 2015 » InsuranceNewsNet

LIFE

How to Get Millennial-Ready to Bridge The Talent Gap s more life insurance agents A reach retirement age, the industry must be creative in reaching out to younger job candidates. By Gayle O’Connell

or years, American executives and business owners have been told that when the baby boomers retire, we can expect to see a significant shortage of people with the skills, experience and readiness it takes to replace them. This looming “talent gap” is expected to hit the life insurance industry particularly hard. LIMRA research shows that 60 percent of independent life insurance agents are 55 or older, with the average retirement age for agents at 64 and for field managers at 62. The National Association of Insurance and Financial Advisors, in its research report “Advisor 2020: The Forces and Opportunities Shaping the Financial Services Advisor of the Future,” said the demand for insurance and financial advisors will outpace the average growth of the U.S. workforce by 2020. However, it adds, the pool of candidates for these jobs will begin to shrink as the numbers of college graduates and early career changers decline. Nationwide, more than 75 million baby boomers have plans to retire within the next few years. With only 50 million people ready to fill those vacancies, how will businesses — and the life insurance industry specifically — close the gap?

Insurance Talent Gap

The number of workers in the insurance industry aged 55 and older currently is 30 percent greater than that of other industries, making that industry segment far more susceptible to the negative impact of the impending talent gap. Recently, the Griffith Education Foundation sponsored the Insurance Education & Career Summit in Atlanta. At this summit, industry leaders and faculty 50

members worked together to identify the primary obstacles to attracting a larger pool of talent and developing the future leaders of the industry. The three main obstacles they identified were industry reputation, resources and recruitment. Other groups, such as McKinsey & Co., as well as trade organizations and other industry leaders, have reached similar conclusions. Identifying these issues is indeed the first step in addressing how to bridge the talent gap, but what can the insurance industry do to overcome them? The life insurance industry can begin by enhancing its reputation through strong relationships with the millennial population. Millennials prefer to work for and do business with companies that have a positive presence in their communities, are trustworthy, and are original or groundbreaking. But a 2008 survey revealed that 65 percent of millennials believed that the insurance industry had a poor public image and 53 percent felt the industry was not innovative. On the list of highly coveted careers in the United States, the insurance industry’s competitive standing is abysmal. To have a shot at persuading millennials to consider a career in the insurance industry, companies must show an unwavering commitment to their customers, promote transparent internal communication and offer opportunities for employees to support causes that are meaningful to them. For example, at Arbella, we have an employee advisory council, employee blog and regular employee surveys to ensure that our employees feel heard and are able to contribute to our success. We also provide numerous opportunities throughout the year for employees to give back to the community in meaningful ways.

Millennials’ “Preparedness Gap”

Millennials are adept at identif ying authentic, caring and trustworthy companies. But millennials’ skills and

InsuranceNewsNet Magazine » November 2015

education have left them ill-prepared to begin working in their chosen fields. A 2013 Bentley University study has shown that recent college graduates are facing a “preparedness gap.” Essentially, students find themselves wholly unprepared for the workforce when the time comes for them to enter it. The study, known as the PreparedU Project, surveyed nine stakeholder groups (from business decision-makers and corporate recruiters to college students and recent graduates) on students’ preparedness for the workforce. The study concluded that the “lack of preparedness among millennials could have direct consequences on company productivity and the economy,” and that all parties should begin to work together to help close this gap. For the insurance industry, this means we must collaborate with local colleges and universities to ensure that their curricula, career services and other programs better prepare graduates for business careers. In turn, schools should place greater importance on hands-on learning and career advising. Schools also must offer real-world career expertise and advice to students as early as their freshman year. Students also must take an interest in preparing themselves for work by taking business courses even if they are not interested in a business career. At my office, newly hired employees are given extensive mentoring, coaching and feedback through onboarding and training programs that support them in their transition. New employees embark on a year-long process designed to help them thrive. Attention is paid to the whole individual and his or her needs outside of work, instead of only the person’s role at the company. The result is a more dedicated, loyal employee. At the opposite end of the spectrum, many baby boomers who face retirement find their transition uncomfortable to talk about and challenging to plan for. Working closely with these employees and

HOW TO GET MILLENNIAL-READY TO BRIDGE THE TALENT GAP LIFE talking openly with them about when and how they want to retire better prepares them for their future. This also creates opportunities for millennials and for the company as a whole. Many who are planning to retire prefer to work part time or as consultants. In our practice, we pair these successful, experienced employees with our millennial and Generation X employees to help train and mentor the younger workers. This strategy helps us retain our knowledge base while supporting our retirees-in-transition and providing our up-and-coming employees with the training and mentoring they need.

Agents’ Role

When thinking about closing the talent gap, it is also important for insurance carriers to look beyond their own organizations to the independent insurance agents who sell the carriers’ products. These local, small businesses employ thousands of people nationwide and are typically very involved in their local communities.

Let’s

However, they often lack the budget and expertise to promote their business and, as a result, are a well-kept secret to those seeking career positions. To support these agencies in growing their businesses, we have introduced a comprehensive sales development program designed to hire and train new sales talent for their local independent agents. Through a combination of structured classroom, online and on-the-job learning, these sales representatives build a deep understanding of the insurance industry, insurance products and professional selling skills. Providing these types of resources strengthens the carrier/agent partnership, fosters small business growth and provides long-term employment opportunities. Young professionals entering the workforce today are talented, motivated and technologically advanced. But they need much more from us as educators and business leaders than what we have been accustomed to. As an increasing number of insurance professionals continue to age out of the workforce, academic institutions

together.

and businesses must work together to develop the future of the industry. It’s up to all of us to usher this new generation across the threshold from students to well-prepared, skilled, lifelong learners. And unless we put these ideas into practice, this ever-expanding talent gap will continue to outrun us in the coming years. But all is not grim for the insurance industry. In light of pending baby boomer retirements, insurance offers fast-paced career growth for talented individuals. The industry boasts numerous companies that are dynamic organizations, recognized as among the best places to work, that care deeply about their employees and their communities, and provide great benefits, a friendly culture and true work/ life balance. Gayle O’Connell is senior vice president of human resources and marketing communications, Arbella Insurance Group, Quincy, Mass. Gayle may be contacted at gayle. oconnell@innfeedback.com.

You’ve got the life insurance strategies to help business owners succeed. And we’re here to help you implement them. Learn why millions of clients and thousands of financial professionals trust us as their partner of choice.1 Call our Life Sales Support Team today: 1-888-413-7860, option 1

m As of December 31, 2014. Securian Financial Group, Inc. is the parent corporation of Minnesota Life Insurance Company and Securian Life Insurance Company. Certain financial highlights are presented at the parent level only. 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. Both companies are headquartered in Saint 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. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods.

Securian Financial Group, Inc. www.securian.com 400 Robert Street North, St. Paul, MN 55101-2098 • 1-800-820-4205 ©2015 Securian Financial Group, Inc. All rights reserved. F82624-21 9-2015 DOFU 9-2015 24237

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

November 2015 » InsuranceNewsNet Magazine

LIFE

How Today’s Accelerated Benefit Riders Can Fund Tomorrow’s Care wo types of accelerated benT efit riders can help your client plan for long-term and shortterm needs. By Steve Schoonveld

o one wants to imagine the possibility of needing long-term care (LTC). In fact, one-third of Americans ages 40 or older say they are deeply concerned they won’t plan enough for the care they might need when they get older, according to an Associated Press-NORC study. Yet, two-thirds of those in that age group report having done little or no planning to pay for such assistance. But if left unaddressed, longterm health costs can have a serious impact on each stage of the retirement road map — from accumulation to taking income to leaving a legacy. Today, a fulltime home health aide can cost around $3,000 a month, according to an American Council of Life Insurers report. That same report found the median annual cost for a nursing home stay is $87,600. In the future, receiving care from family or friends may cease to be an option for many retirees, potentially increasing reliance on professional services and shifting more of the financial burden onto retirees and their families. The ratio of potential caregivers to those in the high-risk ages of 80 and older who may need care is projected to decrease by the year 2030 to four to one, from a recent ratio of seven to one, according to the AARP Public Policy Institute. Conversely, the number of people in nursing facilities, alternative residential care places or home care services is expected to grow to 27 million by 2050, from 15 million in 2000, according to the National Center for Health Statistics. 52

A Maturing Insurance Market

As the number of individuals requiring paid services increases in the future, a more comprehensive set of solutions is available today beyond traditional longterm care insurance, which has seen sales decline and fewer carriers offering that type of coverage. Life combination products have gained particular traction in addressing the financial risks of long-term care expenses.

term care, and the other provides a death benefit in the event that a chronic illness condition or the need for long-term care does not arise. Generally speaking, there are two types of ABRs available today with life insurance — LTC ABRs and ABRs that accelerate the death benefit in the event of a chronically ill condition. While often discussed in the same breath, these products are quite different.

Long-Term Care ABRs

These products offer flexible benefits and trade-offs that make it easier to facilitate needs-based planning. Life combination products combine some forms of life insurance with add-ons called accelerated benefit riders (ABRs), that provide access to tax-efficient funds in qualifying situations by “accelerating,” or drawing down, the policy’s death benefit. This dual-purpose design offsets the “use it or lose it” risk of traditional longterm care insurance: One benefit helps address the financial risks a client faces when chronically ill or in need of long-

InsuranceNewsNet Magazine » November 2015

To trigger the benefits of an LTC ABR, a client must be certified as suffering severe cognitive impairment or be unable to perform, without substantial assistance from another individual, at least two activities of daily living (ADLs) for a period of at least 90 days. ADLs are bathing, continence, dressing, eating, toileting and transferring. Once clients have been certified, they can use LTC ABRs to help address the costs of both recoverable ailments — such as a mild stroke, spinal cord injuries or orthopedic traumas — and nonrecoverable ailments, such as disabling strokes or Alzheimer’s disease or similar losses of mental capacity. When faced with these circumstances, policyholders with LTC ABRs are able to accelerate 100 percent of their life insurance policy’s death benefit to help fund long-term care expenses. Many products also are coupled with an extension of benefits rider. This rider allows long-term care benefit payments to continue after the entire death benefit has been paid, providing additional funds of potentially two to three times the death benefit. An additional option may increase the maximum monthly benefits with a provision for annual inflation. These additions provide for longer-term,

WHO

ARE THE CUSTOMERS OF TOMORROW? Consumers today expect the buying experience to be simple, fast and laser-focused on their needs. This isn’t the process of buying life insurance today, and may be one of the reasons why nearly 100 million Americans have no life insurance. Legal & General America is committed to changing that statistic. We’re investing in opportunities to grow the life insurance industry and we want to help you reach and engage the uninsured. Our end-to-end digital processes save you time and money, so you can spend it doing what you do best; finding and serving the customers of tomorrow.

WHAT FACE DO YOUR CUSTOMERS SEE? LET’S START A CONVERSATION. VISIT US AT NAILBA BOOTH #315.

Legal & General America life insurance products are underwritten and issued by Banner Life Insurance Company, Urbana, MD and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states and in DC. William Penn does business exclusively in New York; Banner does not solicit business in NY. Statistics from LIMRA Insurance Barometer Study 2015. 15-363

EVERY DAY MATTERS.® BANNER. WILLIAM PENN. November 2015 » InsuranceNewsNet Magazine

LIFE HOW TODAY’S ACCELERATED BENEFIT RIDERS CAN FUND TOMORROW’S CARE

Clients need help understanding what’s at risk without a long-term care plan — their hard-earned wealth. more intensive needs such as in the following hypothetical scenario: An upper-middle-income husband and father retiring at age 65 with a $1 million nest egg plans to supplement his retirement income by drawing down his assets at $35,000 annually. At this rate, he and his wife will have enough assets to live well beyond 99 years old, factoring in assumptions of 5 percent annual growth on the asset and a 3 percent rate of inflation. However, the situation changes when he faces an uninsured longterm care need. A care need of three years beginning at age 81, costing $7,000 per month, will deplete his nest egg by age 91, placing the couple’s retirement and legacy planning goals in jeopardy. If he needs five years of long-term care support (which the U.S. Department of Health and Human Services predicts that 20 percent of today’s 65-yearolds will need), his assets will be depleted by the time he reaches age 85. Depending on the LTC ABR, the benefits may be paid in either reimbursement or indemnity form. With reimbursement-style claim payments, policyholders are reimbursed for qualified longterm care services including home health care, nursing homes, assisted living facilities, adult day care or respite care after receipts have been submitted. With indemnity benefits, the policyholder typically receives a set amount of money each month (subject to the IRS per diem limits) that can be used for any expense, without restriction and without submitting receipts. It should be noted that indemnity benefits can be an annual payment or a one-time lump sum. Some LTC ABRs in combination with the underlying product chassis 54

add another advantage in that they are not subject to rate increases, providing guaranteed costs. However, as individuals consider these solutions, they should realize that payout of the LTC benefits reduces their death benefit, potentially to zero, and that could impact their financial planning goals.

Chronic Illness Riders

Like LTC ABRs, chronic illness (CI) ABRs are intended to provide supplemental income to fund tax-qualified expenses when a client cannot perform two of the six ADLs or suffers a severe cognitive impairment. However, the qualifying conditions for CI ABRs must be permanent, requiring services for the rest of the claimant’s life. This means recoverable conditions, such as a mild stroke, would not be covered under the CI ABRs, potentially leaving the client vulnerable to out-of-pocket expenses. Based on data from the American Association of Long Term Care Insurance, claimants recover from conditions that require home health care needs approximately half of the time and recover from conditions requiring in-facility care a third of the time. In light of this, it may be appropriate to discuss a secondary product purchase that offers benefits for such situations. Funds available through the CI ABRs max out at the value of the policy death benefit. Additional riders, including inflation protection or extension of benefits, are not available. In most cases with CI ABRs, the funds are paid through an indemnity-style benefit and often are limited to the maximum tax-qualified daily amount. Daily or monthly benefits may increase within these riders but are limited by the annual increase in the tax limit or per diem limit. The benefits from these policy riders also are designed to be excluded from taxable income, although clients should still speak with a tax advisor.

InsuranceNewsNet Magazine » November 2015

Based on the more stringent guidelines around CI ABRs and the maximum funds available for long-term illness, it’s a safe assumption that those purchasing the CI riders have a primary need for life insurance protection, but also are concerned about the impact of long-term health expenses on their financial well-being. A CI ABR that can fully accelerate the death benefit of the policy generally ranges between 7 and 10 percent of the life premium in cost.

Additional Purchase Considerations

Before purchasing, additional factors to consider include: » Elimination periods. Some policies require the insured to pay out of pocket for a specified number of days before the policy begins paying out benefits. An elimination period can be anywhere from 90 days to 365 days. » Multi-pay structure. Clients who do not have the liquidity for a single-premium payment may choose a multi-pay option instead. Many of the LTC ABR products on the market offer multi-pay options, and CI ABRs offer a wide variety of payment schedules. » Care coordination services. Several carriers offer resources to help simplify the process of arranging long-term care services — including claims support, needs assessments, tools to find local service providers and more.

Starting the Conversation

It’s vital to include long-term care in retirement planning discussions with clients. Clients need help understanding what’s at risk without a long-term care plan — their hard-earned wealth. More categories of products are available from more providers today than ever before. By offering clear guidance on these many options, advisors can facilitate the needs-based planning for long-term care expenses that is so critical to clients’ well-being. Steve Schoonveld is head of linked benefit products, Lincoln Financial Group. Steve may be contacted at steve.schoonveld@ innfeedback.com.

LIFE

ANNUITIES

MEDICARE SUPPLEMENT

Oxford Life’s Medicare Supplement

It’s for YOU! NEW Mobile Office Phone App Instantly Get Status on Pending Business

One of the LOWEST Plan F Rates in the industry Get the side-by-side comparison that proves it! See how Oxford Life rates compare to United Healthcare, Mutual of Omaha, and Aetna.

LIFE

Sample Monthly Plan F Rates FEMALE AGE 65 NON-TOBACCO1

Illinois

Nebraska

N. Carolina

Oregon

$115.30

$102.68

$121.70

$119.74

Tennessee

Texas

Utah

$117.62

$114.69

$109.70

$115.28

State

FREE Comparison Report ➤

1 Lowest area factor rate 2 Based on actual experience with commissions paid same day as policy issue. 3 According to CSG’s Premium Rate Scorecard TM as of 8/4/2015.

AZ CA CO GA IA ID IL IN KS MD MI MO MT NC ND NE NV OH* OK OR PA* SC SD TN TX UT WY

A M

BEST A- Excellent

*Effective as of 5-7-2014. For the latest rating, access www.ambest.com A.M. Best assigns ratings from A++ to F, A++ being superior ratings. MS809P

Phone Sales Same Day Commission Payout 2 TIES

MEDIC

ARE SU PPL

e 65, Non-T obacco, Pla

Oxford Life

$153.40 $137.00 $124.28 $158.90 $105.97 $145.19 $115.30 $125.00 $127.14 $154.10 $128.50 $148.50 $120.99 $121.70 $120.73 $102.68 $143.80 $135.90 $108.30 $119.74 $131.60 $127.20 $117.62 $114.69 $109.70 $115.28 $112.80

Aetna Companies $141.03 $136.61 $139.94 $126.87 $101.79 $150.19 $117.37 $115.12 $125.45 $161.27 $126.95 $255.06 $117.79 $112.04 $130.70 $106.79 $144.61 N/A $100.46 $139.11 N/A $125.95 $133.11 $134.95 $124.95 $124.95 $118.79

n F*, Lowest



Area Factor

Mutual of Om Companiesaha $138.89 $149.79 $125.95 $137.91 $103.67 $179.35 $124.85 $131.13 $202.23 $183.15 $121.72 $176.51 $134.79 $134.92 $131.12 $123.59 $149.31 $148.32 $117.45 $136.94 $152.68 $137.68 $138.87 $148.39 $137.61 $151.36 $121.51

EMENT

Rates

United Hea lthcare $145.35 $128.72 $125.40 $166.25 $132.05 $162.50 $146.22 $148.50 $148.32 $155.67 $141.15 $173.75 $126.80 $142.20 $138.17 $145.70 $135.20 $144.65 $129.95 $132.92 $135.02 $125.57 $134.85 $142.72 $147.97 $127.85 $130.12

1 According to CSG’s Premium Rate Scoreca TM *OH and PA compare rd as of 8/4/201 5. Insurance Compan Plan C. Oxford Life does not offer Plan y, and United F in these World. Aetna compan ies include Aetna, states. Aetna companies do not have American Continen CER USE ONLY tal, and Continen Plan C in these states. Mutual — Not intende tal Life. Rates d for solicitation in the compari of Omaha companies include to the public. son are believed Mutual of Omaha, Not connected to be current United of with or endorse as of 6/2/201 5 but are subject Omaha, Omaha d by the United to change. States Govern

MS588P3 — FOR PRODU

Financial Strength Rating

ANNUI

Female, Ag

S. Dakota

Call Now for the

Oxford Life by CSG Ac Cited tu as one of arial the LOWER Plan F Ra tes in the U.S. 1

ment or the Federal

Medicare Program

Call Today for more information

888-203-6221 www.oxfordlife.com

— FOR PRODUCER USE ONLY — Not intended for soliciting or advertising to the public. Oxford Life’s AssuranceTM is issued by Oxford Life Insurance Company®. November 2015 »Not InsuranceNewsNet Refer to Oxford Life Insurance Company®, policy form ICC10-OL400 and state specific variations where applicable. available in all states. Magazine

ANNUITYWIRES

Court Rules That Annuities Don’t Count in Medicaid Are your clients concerned that owning short-term annuities could render them ineligible for Medicaid? A federal appeals court ruling could have them breathing a bit easier. Short-term annuities cannot be considered assets in calculating Medicaid eligibility, a federal appeals court in Philadelphia has ruled. Also known as “DRA-compliant” immediate annuities, the contracts meet safe harbor provisions established by Congress, the court determined. The ruling by the U.S. Court of Appeals for the 3rd Circuit was closely watched by elder care experts, and the case has important implications for calculating new penalty periods of Medicaid ineligibility, legal analysts said. Short-term annuities with durations of less than two years serve as a financial bridge until contributions from Medicaid, a health services program for the poor administered by the states, contribute to nursing home care expenses, which can run as high as $80,000 a year in some states.

WILL FA AND MYGA SALES START RISING?

Traditional fixed annuities (FAs) and multiyear guaranteed annuities (MYGAs) might seem like yesteryear’s afterthought, shivering as their sales are in the shadow of the soaring fixed index annuity (FIA) sales. But it might be a mistake for annuity professionals to give these products the cold shoulder. Annuity experts will recall that both types of products saw brisk sales when credited interest rates were higher. The eye-catching rates plus the simple design of those products were attractive to many consumers, annuity analyst Sheryl Moore said. But the prolonged lowinterest-rate environment of the past couple of years put the brakes on some of those sales. Consumers probably still liked the simple designs and the presence of guarantees, but they didn’t like the low rates. Comparatively speaking, the FIA’s downside guarantee and upside potential have had a lot more appeal in a low-rate environment than the FAs and MYGAs. This doesn’t mean FAs and MYGAs no longer have a purpose or a future in the industry, however. When interest rates rise, so might the sales of these two fixed annuity lines — “eventually,” Moore said. DID YOU

KNOW

THE LOWDOWN ON NEW PRODUCTS

Here are the details on some of the latest products to fall into the marketplace. Penn Mutual has launched two new annuity products: Premier Foundation Indexed Annuities and Guaranteed Foundation Fixed Annuity. Premier Foundation Indexed Annuities are designed to offer consumers market-based growth potential tied to the performance of leading market indices (up to a cap) — without the downside risk of direct market investment. With a choice of three products — offering five-year, eight-year or 10-year surrender charge periods — Premier Foundation Indexed Annuities also offer a unique combination of options and flexibility through two diverse indexed account options and a fixed account option; the ability to allocate funds to multiple accounts and change allocations annually; optional living benefit riders for those with growth or inflation concerns; and access to contract value through free withdrawals, required minimum distributions (RMDs) or partial annuitization. Guaranteed Foundation Fixed Annuity is designed for consumers seeking growth to help build a source of lifetime retirement income, fill retirement income gaps or safeguard a portion of retirement savings to

Age 68 is the median age at which U.S. workers will be able to retire with sound financial security. Source: Aon Hewitt

InsuranceNewsNet Magazine » November 2015

QUOTABLE Annuity holders are typically older, and it’s interesting too that it (annuity ownership) goes up with age. — Catherine Collinson, president of the Transamerica Center for Retirement Studies

allow for more aggressive investing of other assets. The product offers guaranteed, tax-deferred growth; access to contact value through free withdrawals, RMDs or partial annuitization; and competitive interest rates and a choice of guarantee periods. Voya is offering a new index crediting strategy within the company’s Voya Secure Index series and Retirement Index Select fixed index annuity product lines. The Voya Pointto-Point Volatility Control Strategy features Deutsche Bank’s proprietary CROCI (Cash Return on Capital Invested) US 5 percent Volatility Control Index, which provides an investment option that aims to reduce volatility by allocating between select U.S. stocks and cash. Customers benefit from low spread rates with growth potential, while also receiving a level of protection from downturns in the market.

‘LAST IN’ TO BE OUT FOR ANNUITY PENALTIES IN OREGON

The Oregon Insurance Division is developing rules to eliminate “Last In, First Out” calculations when assessing early withdrawal charges under the authority of a new law enacted this spring. The law, House Bill 2467, passed the state legislature last May, and the governor signed it into law. Now the state insurance division is starting the rule-making. The specifics include “whether the penalty, fee or charge the insurer imposes is appropriate for and suited to achieving the insurer’s purpose,” “whether the insurer could take actions other than imposing a penalty, fee or charge in order to achieve the purpose,” and “limitations on the amount of the insurer’s penalty, fee or charge.”

November 2015 Âť InsuranceNewsNet Magazine

ANNUITY

Carriers Compete With Complexity, Leading to ‘Arms Race’ Concerns A s carriers continue to expand fixed index annuity product lines and features, some are concerned about the increasing complexity surrounding the product. By Linda Koco

potential arms race may be ahead for fixed index annuity (FIA) business, similar to that in the variable annuity market a decade ago, according to analysts at A.M. Best. The FIA business is a large and growing segment within the U.S. annuity market, the A.M. Best researchers said in a new survey of top FIA writers. This is leading to what the researchers called “increasing levels of product complexity as companies continue to innovate in response to rising competition.” The analysts definitely have a point. 58

Carriers have debuted new FIA products or new features on existing FIA products every month of this year. They include design changes and sometimes entirely new offerings. Some recent examples from the InsuranceNewsNet files appear here, followed by a few observations on the market.

Recent Examples

These debuts are not all game-changers. But taken together, they do show that FIA expansion is well underway, fostering a climate where innovation can flourish. » Add a volatility-control index crediting strategy. Voya Financial took that step by adding the Voya Point-to-Point Volatility Control Strategy to its Voya Secure Index series and Retirement Index Select FIA lines. The strategy is based on the proprietary CROCI (Cash

InsuranceNewsNet Magazine » November 2015

Return on Capital Invested) US 5% Volatility Control Index from Deutsche Bank. It is designed to reduce volatility by allocating between select U.S. stocks and cash, Voya said. » Unveil a from-scratch design. Delaware Life Retirement Stages 7 is an all-new FIA from Delaware Life. It also offers a Deutsche Bank-sponsored index option. In fact, it has two Deutsche Bank-sponsored indexes as well as an S&P 500 index option and a fixed account. The FIA also offers an optional return of premium rider and an optional withdrawal benefit that provides an increasing (“stacked”) benefit base and guaranteed lifetime income payments. » Limit access to distribution. That’s what Delaware Life is doing with the new FIA mentioned previously and also with

WHAT HAPPENS WHEN $270,250 DISAPPEARS?

Attorneys may not realize their current disability insurance plans only replace a small percentage of their income. There’s a simple way to help attorneys mitigate their disability risk. Maximize their “income while disabled” to 65% or more on a non-taxable basis (regardless of income level!) – while you protect and position your core products & services. Download the exclusive new free report, “Disability Insurance Contracts as a Door-Opener to Attorney Clients,” and discover: ࢝ Unsettling statistics that prove why disability coverage is more important than ever ࢝ How to address attorneys’ 3 most common objections to disability coverage ࢝ The generous commissions that can have an immediate impact on your practice without having to change the way you do business. Stop missing out on this lucrative annuity! ࢝ Critical renewability contract provisions and how offering them can be a game-changer! ࢝ Underutilized Disability Insurance talking points which help position additional products! PLUS: Get a product case study targeted specifically for attorneys.

Build lucrative relationships with this underserved niche and make sure the financial plan you created for them doesn’t get sabotaged by a loss of income. November 2015 » Get our new FREE report at: www.DIforAttorneysReport.com

InsuranceNewsNet Magazine

ANNUITY CARRIERS COMPETE WITH COMPLEXITY, LEADING TO ‘ARMS RACE’ CONCERNS

another FIA it rolled out in May. The policies are available exclusively through “a select group of distribution partners,” according to the company. That’s not a policy feature, but it’s a differentiator for advisors who have access to them. » Offer lots of crediting strategies. Two new FIAs from American National Life provide up to six potential interest crediting strategies. Why so many? “To better fix a client’s interest and needs,” the company said in debuting its ASIA PLUS 7 and ASIA PLUS 10 FIAs. » Unveil an FIA series. Penn Mutual recently brought out the Premier Foundation Indexed Annuities series. Designed for consumers with differing time horizons, these FIAs are available with a five-, eight- or 10-year surrender charge period. Each also offers two indexed options and one fixed-account option; the ability to allocate to multiple accounts and change allocations annually; optional living benefit riders; and access to contract value through free withdrawals, required minimum distributions on tax-qualified plans, or partial annuitization, the company said. » Enhance with a lifetime income option. Jackson National did that by adding the optional LifePay feature to its Jackson AscenderPlus Select FIA. The feature guarantees income for life starting at age 45, with the payout ranging from 3 percent to 7.5 percent annually, depending on age at start of income. There are annual step-ups for the life of the contract, and policyholders can add or cancel the feature, too, according to the insurer. 60

» Expand the use of the indexing concept. This last is an index strategy that Allianz Life, the nation’s biggest FIA seller, has added to its Allianz Index Advantage Variable Annuity (not an FIA). Called the Index Guard Strategy, it has annual caps but also a floor on negative index performance. Policy owners can allocate all or part of the contract value to the other index strategies at the index anniversary. It offers a level of protection from large index losses while maintaining the potential for performance, the carrier said.

The Complexity Question

Whether and to what extent product expansion adds to complexity has been a subject of discussion ever since FIAs debuted 20 years ago. From the get-go, FIAs were “different.” They frequently were described as a hybrid between traditional fixed and variable annuities, due to their upside potential and downside guarantee profile. The early entrants said this difference was not synonymous with complexity; rather, it was new. Over the years, originality in design became a hallmark of FIAs. Developers added an ever-widening array of features — to create new options for customers, to capture the attention of advisors, to underscore differentiation and avoid commoditization, to adjust to evolving regulatory and legal requirements, and to adapt to changing market conditions, among other reasons. That widening array is what has caused industry veterans to draw parallels between competition in today’s FIA market and in the variable annuity market. In the mid-1990s, the modern versions of variable

InsuranceNewsNet Magazine » November 2015

annuities — called multimanager variable annuities — began to sprout. It was a big deal at the time for annuities to have retail mutual fund company subaccounts inside a variable annuity. When the stock market rallied, sales popped and the concept took hold. Thus began a years-long rush to bring out more and more of everything inside variable annuities: more market entries, subaccount options, investment managers, fixed accounts, investing strategies, death benefit options, maturity dates, liquidity provisions, living benefit guarantees and numerous other features. Developers likened the products to Swiss army knives, and market watchers likened the competitive environment to an “arms race,” as the Best analysts have rightly noted. Complexity came into the picture because of “more.” As more products added more features, there were more voices being raised about prospectuses reaching 100-plus pages, policies with too many moving parts and hard-to-understand provisions. Providers began focusing on ways to simplify language and features, and many beefed-up training and education programs for advisors. Now it seems the FIA market is following a similar trajectory, with product expansion and increasing sales going hand in hand and with concerns about product complexity foaming in the wake. FIA sales were up 14 percent to $38.7 billion in 2013 and another 24 percent to $48 billion in 2014, according to a report on FIA distribution from the Insured Retirement Institute (IRI). There are signs that the FIA industry is addressing this. For instance, the IRI researchers noted that “some distributors have created specific training programs and suitability review processes to ensure that advisors understand what they are selling, and consumers understand what they are buying.” The Best analysts, in their FIA report, observed that “as product complexity increases, the risk profile of an FIA is likely to increase.” This is a sobering comment but surely a consideration that will be top of mind as the market continues to develop. InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at linda.koco@innfeedback.com.

At Foresters, life insurance is just a beginning When members purchase ForestersTM life insurance, they’re not just helping to ensure their financial future, they may also have access to unique member benefits such as community grants and volunteer opportunities. Foresters is an organization with a singular purpose – to enhance family well-being – and members are a part of this. In 2014 alone... Awarded

$4.8 million

was granted through Foresters Community Grants to help members organize volunteer activities and fun family events

$1.8 million

Invested over

$30 million

in funding for more than 1,100 Foresters Competitive Scholarships

in delivering member benefits and community activities

36,140

Foresters volunteers supported local charities through 771 community activities

Sell to Millennials. Learn How.

term.foresters.com Figures in Canadian dollars, as of December 31, 2014. Foresters member benefits are non-contractual, subject to eligibility requirements and limitations and may be changed or cancelled without notice. Third parties administer Legal Link, Everyday Money and Foresters Competitive Scholarships. Foresters Financial and Foresters are trade names and trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Road, Toronto, Canada M3C 1T9) and its subsidiaries. 412893 US (11/15) FOR PRODUCER USE ONLY

November 2015 » InsuranceNewsNet Magazine

ANNUITY

Research Suggests QLACs Are Critical Piece of Retirement Puzzle A new report recommends offering a selection of investments tailored for funding withdrawals during the early retirement years, and a longevity annuity that starts its payout stream at age 80 or later.

Predictions point to a larger role for longevity annuities in the U.S. as well as worldwide.

By Linda Koco

ongevity annuities could be entering a period where they will see broader use in the U.S. than has already been made possible by the qualifying longevity annuity contract (QLAC). Department of Treasury rules created QLACs in July 2014 as a retirement income strategy inside of defined contribution retirement plans and individual retirement accounts (IRAs). Researchers at the global asset management firm Schroders acknowledged the change in a new report on postretirement solutions. But Lesley-Ann Morgan, head of Schroders’ Global Strategic Solutions, predicts that a larger role for longevity annuities lies ahead — in the U.S. as well as worldwide. Longevity annuities can be used to meet postretirement needs of the mid-market, Morgan said in an interview with InsuranceNewsNet. This is in addition to the needs of those who have corporate retirement plans. This can happen if the products are made part of a “packaged” postretirement solution, Morgan said. The “package” would bring together outcomes-based investing in the early retirement years (for a safe withdrawal strategy) with a longevity annuity kicking in when the client reaches age 80 or so. This could be structured for use in both the retail and corporate markets, she said. Many details on how this could work appear in the Schroders report “Global Lessons in Developing Post-Retirement Solutions.” The report addresses retirement income trends in the U.S. as well as several other countries. 62

The Idea

The idea may be of interest to retirement advisors because such a product would provide advisors with a simplified retirement solution to offer mid-market clients, even if they do not have a corporate retirement plan. That could support advisory expansion into this often underserved market. Such packages don’t yet exist, Morgan said. “But asset managers and insurers in the U.K. are already being asked to come together to create such products for the retail market as well as in the corporate plan market.” A “blueprint” released this summer by the National Employment Savings Trust (NEST), London, calls for a variation of the approach, she noted. She sees the approach spreading to the U.S. and many other countries. The report presents three different approaches, but they all boil down to offering a selection of investments tailored for funding withdrawals during the early retirement years, and a longevity annuity that starts its payout stream at age 80 or later. This may lead to a scratch-yourhead moment for American annuity

InsuranceNewsNet Magazine » November 2015

professionals, since many variable annuities with withdrawal or income riders accomplish much of the same purpose. That is, they have investment accounts and riders for guaranteed income streams. Morgan said she recognizes this structure. However, she said, variable annuities “can be quite complicated since there are so many options.” The mid-market needs “something more simple,” she said. In addition, the report said such products are “likely to be less attractive to insurers in the future” because of the capital requirements associated with the guarantees. Morgan also acknowledged that many advisors do provide counsel to people about reliable retirement investment strategies along with product suggestions. But this advice often focuses on asset allocation, she said. “We’re talking here about outcome-oriented investing, so it will produce a reliable income. This has to do with the skill of the money manager.” Even when advisors and money managers do provide solutions using outcomes-based investing and guaranteed income solutions, there are problems for the mid-market, she said. Namely, people in the mid-market often cannot afford such advisory services.

RESEARCH SUGGESTS QLACS ARE CRITICAL PIECE OF RETIREMENT PUZZLE ANNUITY By comparison, the packaged product that Schroders envisions would be designed for sale to the “average man in the street” who is seeking a simple postretirement solution for income.

It Needs to be Simple

The two parts of the package would be sold together. This needs to be “very straightforward and simple,” Morgan stressed. What is simple and what is not so simple isn’t always clear, the Schroders researchers conceded. “In investment terms, ‘simple’ sometimes gets mistaken for ‘easy’, leading to index-tracking strategies being adopted,” they wrote. “As we have seen in pre-retirement investment strategy, a blindly-implemented passive strategy has significant risks for the real-world outcomes that savers and retirees need.” If simple means “simply communicated,” the risk is that the underlying solution could be complex, and that could open up a potential “mis-selling scandal” later on, the researchers continued. And if investors have used default

retirement plan options during the working years — to simplify their investing, for example — they may not be prepared to choose appropriate investments at retirement, the researchers pointed out. That could undermine efforts to create a retirement income that investors will not outlive. “Perhaps,” the researchers said, “simple should mean a set of principles that help guide retirees to a suitable post-retirement strategy.” The packaged retirement income solution — which Schroders also terms “hybrid” — presumably would follow such principles. In the U.S., postretirement is already complicated, Morgan said. For instance, many people underestimate how long they might live, so they have no certainty about how much income they will need (or receive). In addition, with interest rates being as low as they have been, annuities that guarantee income for life can look like “not a very good deal.” The hybrid approach would help, Morgan said. It would entail partnerships between providers that create an income solution package. This package would

feature: 1) drawdown from an investment account in the early retirement years, running 15 or more years; and 2) a simple longevity annuity for income in the last years, starting when investors reach their 80s, Morgan said. The investment accounts would be “very diversified, with allowance for inflation, but not too low or too punchy,” she said. The hybrid strategy could work in corporate plans when a fiduciary is involved, and also in situations with no fiduciary involvement, the report also said. InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at linda.koco@innfeedback.com.

Like this article or any other? As seen in the

July 2012 issue

Life

Annuities

of InsuranceNewsNet

Magazine

Health July 2012

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

Exclusive digital report for LIMRA Member Companies and their Producers. This report may be redistributed freely and may not be edited or modified without permission from InsuranceNewsNet.

ity Annuity AnnuIndexed ed Fixed x e TriVysta d In d e ix Fixed Indexed Annuity F TriVysta Vys t a TM TM

s to accumulate

nt allows your clients to accumulate your clie The new TriVysta™ is a single premium, that allows annuity thatindexed yfixed it nu an ed ex d in There new TriVysta™ is a single premium, fixed indexed annuity that allows your come to accumulate inclients ed efit of ium, fix g ben p m inand benefit from tax deferral, diversify within one contract provide a living benefit of income liv a e d vi ro p d ysta™ is a singlefunds, an ntract within one contract and provide a living benefit of income funds, benefitfy from tax one codiversify hindeferral, wit forraas long live. iverassithey d l, er ef d x ta t from for as long as they live. • New Indices Available - The Power of Three™ O& FREE VIDEIT • New Indices Available - The Power of Three™ s they live. K • GrowtherPotential 7 Index Crediting Strategies e™ SALES of Threthrough Pow Potential • eGrowth through 7 Index Crediting Strategies ces Available - Th • Optional Guaranteed Lifetime Withdrawal Rider rategies Crediting St dex Guaranteed • h Optional Lifetime Withdrawal Rider In 7 ug ro th l ia • 10% Income Bonus on Benefit Base Potent er wal Ri •feti10% Income Bonus ondBenefit Base Withdra meGuaranteed Li d • 4% Benefit Base Growth for 20 Years Plus Index Credits ee nt ra ua G • 4% Guaranteed Benefit Base Growth for 20 Years Plus Index Credits Base and view fit more To ne learn the TriVysta™ Fixed Indexed Video, call (800) 767-7749 or visit redits Annuity ome Bonus on Be ex CIndexed dand To viewmore theth new TriVysta video download theVideo, producer us InFixed To learn and view thearTriVysta™ Annuity call (800) 767-7749 or visit Pl s Ye 20 r fo www.TriVystaFIA.com. 49 or visit row G 77 se 7Ba 76 ) fit 00 ne (8 ll Be d ca sales kit visit www.TriVystaKit.com or, call 844.331.2775 rantee www.TriVystaFIA.com. exed Annuity Video Protection ta™ Fixed Ind

e TriVys ore and view thProtection staFIA.com.

Growth Growth

Income Income

Guggenheim Life and Annuity Company, whose office is in Indianapolis, Indiana, issues the TriVysta Fixed Indexed Annuity. Annuity contracts contain limitations. Please the contract for more details these limitations. TriVysta Fixed Indexed Annuity and/or certain product features may Guggenheim Life consult and Annuity Company, whose officeregarding is in Indianapolis, Indiana,The issues the TriVysta Fixed Indexed Annuity. Annuity contracts contain not be available in consult all states. Life is details not licensed in New York. This contract is issuedFixed on form number GLA-INDEX-01 or a variation of such. DBA limitations. Please theGuggenheim contract for more regarding these limitations. The TriVysta Indexed Annuity and/or certain product features may ain Guggenheim Lifeinand Annuity Insurance Company California not be available all states. Guggenheim Life is notinlicensed in New York. This contract is issued on form numberity GLA-INDEX-01 or antvariation of such. DBA racts co ntSOLICITING co nu FOR AGENT USE ONLY. NOT FOR PURPOSES. 051503A An . ity nu ed An Guggenheim Life and Annuity Insurance Company in California y tures ma fea tSOLICITING AGENT USE ONLY. FOR SOLICITING PURPOSES. 101502A Vysta Fixed Index uc odFOR FORFOR AGENT USE ONLY. PURPOSES. 051503A prNOT inNOT rta ce d/or iana, issues the Tri

Growth

Income

an Ind n of such. DBA ed Indexed Annuity is in Indianapolis, ns. The TriVysta Fix DEX-01 or a variatio any, whose office IN tio mp Aita Co GL lim er e ity es nu mb th An nu d ife an tails regarding issued on form OSES. 051503A ntract for more de rk. This contract is ase consult the co R SOLICITING PURP licensed in New Yo FO t T no is NO e LY. Lif ON im E he en November 2015 » InsuranceNewsNet Magazine FOR AGENT US e in all states. Gugg in California urance Company ife and Annuity Ins

HEALTHWIRES

Caregivers Face Career Crunch Family members who provide long-term care to ailing loved ones pay a heavy price in terms of their careers, according to a Genworth survey. Eleven percent of caregivers surveyed said they actually lost their jobs as a result of their caregiving responsibilities, and another 10 percent reported having to change careers to accommodate caregiving. That’s in addition to the other financial, physical and emotional impacts of caregiving examined in the study. Among caregivers surveyed, 51 percent said that caregiving responsibilities negatively impacted their ability to perform their jobs. More than three-quarters said they missed some work during the past year because of caregiving — a jump from the 19 percent of caregivers who said the same thing in a 2010 Genworth survey. Caregivers said they missed an average of seven hours of work per week because of their responsibilities, with 19 percent saying they missed 10 or more hours of work weekly. Absences, reduced hours and chronic tardiness also translated into a significant reduction in caregivers’ paychecks. About one-third of caregivers provided 30 hours or more of care a week. And on average, caregivers reported having lost one-third of their income as a result of caregiving.

WORKERS SHOULDERING MORE HEALTH-CARE COSTS

Workers are picking up a bigger share of the tab for their employer-based health insurance, and benefits experts see few signs of this trend slowing. Most companies now offer health coverage that requires employees to pay an annual deductible before insurance kicks in, and the size of that deductible has soared in the past decade, according to the Kaiser Family Foundation. The average general deductible for workers with single coverage totaled $1,077 this year, compared with only $303 in 2006. That deductible has climbed nearly seven times faster than wages, on average, over the past five years. The study also found that 46 percent of workers with single coverage have a deductible of $1,000 or more. That’s up from only 10 percent in 2006. Kaiser’s study didn’t measure family coverage deductibles, which can be more complex, but researchers say those have grown as well.

DID YOU

KNOW

15M ENROLLED IN CORPORATE WELLNESS PROGRAMS

Another way in which employers are trying to trim their health-care costs is by nudging their workers into healthy habits. The number of consumers who are enrolled in corporate wellness programs is estimated at 15 million, according to Parks Associates. These wellness programs range from weight-loss counseling to alcohol management courses. Additionally, nearly 30 percent of those who have a connected fitness device such as Fitbit received the product with a corporate discount. Owners of a fitness or wellness device acquired through a corporate wellness program use the device much more frequently than owners who don’t have the benefit of a corporate discount, Parks researchers said.

HALF OF AMERICANS HAVE DIABETES OR PREDIABETES

About half of all Americans have either diabetes or prediabetes, according to a report published in the Journal of The American Medical Association. But there’s a silver lining to that seemingly scary statistic. Although the percentage of those with

Critical illness premium totaled $380 million in 2014, up 15 percent from 2013. Source: Gen Re

InsuranceNewsNet Magazine » November 2015

QUOTABLE It’s funny, we used to think of $1,000 as a very high deductible, and now it’s almost commonplace. — Drew Altman, Kaiser Family Foundation CEO

diabetes is high, the prevalence of the disease in the U.S. finally has started to plateau after two decades of increases. The authors of the study said the percentage of people with diagnosed diabetes remained steady from 2008 to 2012. “Although obesity and Type 2 diabetes remain major clinical and public health problems in the United States, the current data provide a glimmer of hope,” wrote William Herman and Amy Rothberg of the University of Michigan in an article accompanying the paper. The research team also found that the proportion of people who had diabetes without knowing it decreased from 40.3 percent in 1994 to 31 percent in 2012.

WORKPLACE STRESS IS AS BAD AS SECONDHAND SMOKE

Gone are the days when office workers could puff on cigarettes at their desks. But there’s an element to the workplace that is just as harmful to employees as secondhand smoke — and that is stress. Stress levels caused both by employees’ work and by their personal lives can have just as poor an effect on health as secondhand smoke, not exercising or eating poorly, according to researchers from Harvard University and Stanford University. Researchers found that job insecurity increased the odds of poor health among employees by about 50 percent, and long work hours increased worker mortality by nearly 20 percent. High job demands also increased the chances of illness by 35 percent.

DENTAL & VISION

THAT SELLS ITSELF

It’s never been easier to sell dental & vision insurance online! We are now providing our agents with a free website to sell dental & vision online. Just set it up and then let the system do the work!

• 11 carriers available • • • • • • • •

Over

0 0 0 , 0 5ew enrollments

n ! r a e y s i h t so far

Plans available in 49 States NO APPOINTMENT FEES – online contracting Great commissions & rates Direct to consumer enrollment (no face-to-face required) Vision & Dental Plans with no waiting periods Smartphone enrollments Broker Portal with customized marketing material Free website with a built-in Quote Engine

1-877-759-5728

Check out our 90-second video at DFEinfo.com

HEALTH

What to Look for When Selecting a Private Exchange Not all private exchanges are created equal. Here is what you and your employer clients should know in order to get the most out of a private exchange as a strategic option for delivering employee benefits. By Chris Duncan

rivate exchanges have emerged rapidly in the last few years as a viable option for many employers as they look for ways to maintain compliance with the Affordable Care Act (ACA), while enabling employees to take more ownership of their health care and benefit choices and management. An effective private exchange is a creative, flexible solution to help employers achieve these workforce strategies while reducing their costs and administrative burden. But not all private exchanges are created equal, and private exchanges may not always be the best option for all companies. 66

Some employers have a narrow view of private exchanges, thinking of them as merely benefits administration and enrollment on steroids. And while it is true that private exchanges include an enrollment experience and benefits administration support, they represent a fundamental shift from a paternalistic, “employer knows best” approach to deciding what benefits are offered to an approach that is truly employee-centric. The best private-exchanges enable employees — with the help of good decision support tools — to make their own benefit decisions and customize personal plans that are right for them. This gives the employee more involvement and control and if done well, delivers more perceived value for each dollar spent. But not every company is ready or able to move to a private-exchange approach. Because benefits represent a substantial investment for companies, it’s increasingly important for the program they offer to fit the needs of a

InsuranceNewsNet Magazine » November 2015

multigenerational and diverse workforce and be managed and delivered accurately and efficiently. Not all private exchanges will meet the needs of every employer or employee. To get the most out of a private exchange as a strategic option for delivering employee benefits, it’s important to know what to look for. The first thing to remember in considering a move to a private exchange is that private exchanges aren’t for everyone. For example, a company with a strong paternalistic culture of providing employee benefits or an employer with a largely undereducated workforce may find that the myriad choices presented by a private exchange are not something they want to have their employees take on without carefully considering how to support the workforce. That workforce support would include very strong communications, education, decision-support tools and call center support with multilanguage capability.

WHAT TO LOOK FOR WHEN SELECTING A PRIVATE EXCHANGE HEALTH A private exchange is not a magic bullet and must be considered as one strategic option among many. A good broker or consultant always starts with a strategic assessment of the client’s needs and works from there, instead of trying to force-fit a solution that may not be the best for the company or its employees. They should keep the company’s challenges in mind, and design solutions and options that meet the client’s unique budget, culture, leadership and employee circumstances. If an assessment determines that a private exchange is a good choice, the next step is to evaluate the various privateexchange options available in the marketplace. A private exchange is a strategic option that fundamentally changes the employer-employee relationship by empowering employees to design and purchase their own customized benefits plans. So any successful implementation will, first and foremost, focus on giving employees the means they need to make informed decisions in a one-stop shop that covers options for medical, life,

accident, disability, voluntary and perhaps even retirement benefits. To the average consumer, health care and benefits choices can be very confusing. So the best way to make a private exchange work at its highest level is for it to be very good at helping simplify complex and important decisions. The exchange can do this by providing tailored solutions that are explained and enabled in ways that the average person can comprehend. An effective private exchange will provide employees with strong decision-support tools and choice-enabling capabilities to help them make the best choices based on their unique health care and benefits needs. For example, a 26-year-old with a newborn baby will have to meet an entirely different set of personal risk management needs – such as life insurance and a great pediatrician — than a 56-year-old who might not need life insurance but wants coverage for critical illness and disability instead. Having a system in place that recognizes these differences and enables customized

FREE LEADS

decision-making is a must. It’s also vital for the private exchange to offer what we call multichannel support in the form of both online and “in person” (i.e., a call center staffed by qualified, licensed experts) options. This is important because different people have different levels of comfort in how they engage with technology when making complex decisions.   But a good private exchange doesn’t provide advantages only to the employee. For employers, an effective private exchange with proven service experience, best practices and compliance support can be a big help in complying, reporting and efficiently administering plans under the ACA. A private exchange also should simplify and ease benefits enrollment and administration in a number of ways. First, it should provide a true one-stop shop for all benefits — medical, life, accident, disability, voluntary, retirement — with a single point of enrollment for everything. Beware of private exchanges that offer medical options, but require

CASH BONUS

NEW FOR LIFE & HEALTH AGENTS: CHOOSE YOUR REWARD!

• For each life, health or Medicare Supplement app you submit, earn 1 FREE Medicare lead • Exclusive, high-quality, high-contact, real-time leads • No limit on redemption

• Bonus cash rewards for each life, health or Medicare Supplement app paid and issued • Up to $50 per application • No limit on redemption

Don’t let another application go unrewarded! Get full details and start today at

WWW .MYAPP2REWARDS. COM

Some restrictions apply. Agents must be appointed and in good standing with Bankers Fidelity Life Insurance Company® and/or Bankers Fidelity Assurance Company™. The Company governs all rules and regulations of the App2Reward program, including App2Lead and App2Bonus, and may modify, alter or change any associated requirements.

November 2015 » InsuranceNewsNet Magazine

HEALTH WHAT TO LOOK FOR WHEN SELECTING A PRIVATE EXCHANGE employees to go elsewhere for nonmedical benefits. Look for a solution that is able to go beyond just medical coverage to leverage the collective purchasing power for life, accident, disability, voluntary benefits and others in “stocking the shelves” of the private exchange. Second, a well-designed private exchange should include strong employee education and communications channels to enable employees to make optimal choices.

Third, a private exchange should provide outstanding, integrated post-enrollment benefits administration. Look for a private exchange that doesn’t ask your clients to sacrifice easy ongoing program administration in favor of ease of enrollment — they should get both. Fou r t h, ma ke su re t he pr iv ate exchange is founded on solid benefits administration that allows clients to “flip the switch” seamlessly and move into a private exchange (or out of it) as their strategic needs change, without having to completely overhaul their benefits administration system. And finally, a private exchange should offer the company a high level of cost predictability. In contrast to traditional benefits enrollment and administration approaches, a private exchange should provide the client company with the key advantage of offering a benefits program that is highly flexible but has a very predictable defined contribution from year to year — something every chief financial officer can appreciate.   It looks as if private exchanges are

here to stay, but they may not be right for everyone. If you’re considering steering a client toward a private exchange, make sure the evaluation begins with a consultative process designed to determine if it’s the right approach for the client and its employees. In addition, the evaluation must determine that the approach delivers the best of what private exchanges have to offer in a cost-effective way. Chris Duncan is chief growth officer and national employee benefits leader, EPIC Insurance Brokers and Consultants. Chris may be contacted at chris.duncan@ innfeedback.com.

Like this article or any other? As seen in the

July 2012 issue

Life

Annuities

of InsuranceNewsNet

Magazine

Health July 2012

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

Exclusive digital report for LIMRA Member Companies and their Producers. This report may be redistributed freely and may not be edited or modified without permission from InsuranceNewsNet.

Develop Your Book of Business with a

Thriving & Dependable

LTCi Carrier

To learn how your bottom line can flourish with LifeSecure, call 866.582.7701. Long term care insurance individually underwritten by LifeSecure Insurance Company – Brighton, Mi

www.YourLifeSecure.com For Agent Use Only. Not for Solicitation Purposes.

InsuranceNewsNet Magazine » November 2015

LS-LTC-0404-HP ST 04/15 - INN

OOPS!

ut TO LOOK FOR WHEN SELECTING A PRIVATE EXCHANGE WHAT o b A h Trut o Wrong g n i k G oc The Srhe Advisornstations Whe eir Prese in Th

HEALTH

We left something out of our featured article last month.

In our article, we printed “7 PRESENTATION MISTAKES THAT ARE KILLING YOUR SALES” and we need to make a correction... There is an 8th MISTAKE that is too critical to ignore:

8. You failed to include The Irresistible Offer. A live presentation has a HUGE advantage over print and online advertising: they get to see you – in person. But this advantage can actually lead you straight into a trap. If you weren’t physically in front of your prospects, you’d be forced to rely on powerful copywriting techniques to convey your point; a great ad follows proven formulas that have been used and honed over decades. The trap that speakers and presenters fall into is, while you have the use of your presence, charisma and body language, you may forget to incorporate these time-tested copywriting techniques. This means you’re forgetting “The Irresistible Offer.” When master Presentainer™ and subject of the September InsuranceNewsNet Magazine’s featured interview, Dave VanHoose first realized he needed to incorporate The Irresistible Offer in his presentations, it became a cornerstone of his process that increased his sales by TEN TIMES what they were — with prospects literally RUNNING to the back of the room to invest with him.

What exactly is The Irresistible Offer? It’s that thing that has fast food patrons pushing up to the counter and ordering without the cashier having to sell to them. It’s your cheeseburger that your audience is starving for and yes, they probably even want fries with that. And, according to copywriting “law,” it’s the starting point that your entire ad (presentation in your case) is reverse engineered from. Are you ready to incorporate The Irresistible Offer into your presentation and see your sales multiply by up to 1,000%?

3 Unconventional Tools Will Help You Sell More NOW Dave VanHoose has released a presentation-optimization kit that’s going to get some so-called seminar experts up in arms!

Here’s what’s in the kit: 1) The Presentainer™’s FIELD GUIDE to Sell More NOW Be able to sell anything to anyone at any

time with the 11 Presentainer™ Principles revealed in this unusual resource.

2) Influence in Action EXCLUSIVE Footage

See for yourself Master Presentainer™, Dave VanHoose LIVE in action as he gets people running to the back of the room to invest.

3) Success By Design Blueprint You’ll want to

make sure you have these 12 PROVEN elements for selling every time you present your message.

November BONUS: The “Irresistible Offer Architecture™” Guide

For a limited time, get your FREE Presentainer™’s Kit to Sell More NOW at www.FreePresentainerKit.com.

Irresistible Offer Architecture™

Free

IP RSH

NE RT

TE ES AN GU AR

Un co Con nditi ditio onal na l

l ferra • Re

Identity Cause • Community

BIGGER REASON

ICE

r S s fo ON ason le UTT Re Peop TB rent rent HO Diffe ffe

tra on l C nt ua rpet Discou Pe

Y PLA

E DV ALU

Gift Fa with st Ac Pu tio rcha n Bo se nus

AD DE

Me? for in it t’s

Wha

EA K SP

NE FITS

Time • Money Will it Work for Me?

OVERCOME OBJECTIONS

Scarcity Deadline • Takeaway

URGENCY

To correct our mistake of leaving this out of the October feature, we’d like to extend the deadline to get Dave VanHoose’s “Presentainer™’s Kit to Sell More NOW” ($500 value) for FREE. Plus, we’re now going to include the “Irresistible Offer Architecture™” guide to show you the exact building blocks of The Irresistible Offer. Get it all FREE, for a limited time, at www.FreePresentainerKit.com.

LEVERAGE POINTS Starving Crowd Timeliness Social Proof & Believeability

speakingempire.com | main phone 800 • 687 • 4061 111 Second Avenue NE, Suite 1406 | Saint Petersburg, Florida 33701

November 2015 » InsuranceNewsNet Magazine

FINANCIALWIRES

30M Used Retirement Savings for an Emergency in Past Year

QUOTABLE

Emergency spending is playing as much havoc on Americans’ retirement as is their failure to save for retirement at all. A Bankrate.com report found that 30 million Americans tapped their retirement savings for an emergency within the past year. The report also found that 21 million Americans aren’t saving for retirement at all. Millennials were the least likely to dip into their retirement funds prematurely (only 8 percent did so over the past 12 months). In fact, millennials are the most likely age group to note an improved overall financial situation over the past year (40 percent said they’re better off and just 11 percent said they’re doing worse). The numbers tell a more troubling story for 50-to-64-year-olds. About a quarter of them said their financial situation has deteriorated over the past year (more than any other age group) and 17 percent recently dipped into their retirement savings to pay for an emergency.

MANY WOULD DELAY RETIREMENT TO PAY FOR COLLEGE

How important is paying for college? So important that about one-third of Americans said they would postpone their retirement to help a child or grandchild pay for higher education, according to LIMRA. As tuitions have skyrocketed, Americans have put less money aside for their retirements, delayed retirement start dates and even carried debt with them into retirement. “Those saving in their 401(k)s are also putting money aside for college tuition. They’re doing what they can to prepare for both,” said Michael Ericson, author of the report.

MILLENNIALS CRAVE FACE-TOFACE FINANCIAL ADVICE

It’s a bit of a puzzle — millennials pride themselves on doing everything online, but not when it comes to getting financial advice. A study found that the large majority (87 percent) of millennials definitely want an advisor who will meet with them personally. In addition, when DID YOU

KNOW

53%

doing retirement planning, more than half (62 percent) of surveyed millennials said they would like to be walked through each step of the process. Only 19 percent of millennials said they are likely to use a robo-advisor. The findings were part of a study conducted by the Insured Retirement Institute and the Center for Generational Kinetics.

70% OF MILLENNIALS EXPECT IMPROVED FINANCES

Maybe millennials will have more time and money to spend on retirement planning once their short-term financial prospects look brighter. And those improved financial prospects could be right around the corner, according to one report. More than half of Americans expect a greener outlook in the next six months, and this optimism is strongest among millennials (70 percent versus 64 percent in 2014), according to the American Express Spending & Saving Tracker. Most millennials feel optimistic about their financial situation: 70 percent report they expect that it’s only going to get better over the next six months, compared with 53 percent of the general

of Americans said PUBLIC they experienced unforeseen THE AVERAGE RETURN ON AN INITIAL OFFERING was 20 percent this year. The average increase (such in the first (or “pop”) is 13 percent. expenses as aday health emergency or a car repair) this year.

Source: Renaissance Capital

InsuranceNewsNet Magazine » November 2015

Source: Bankrate

It could be that a slightly larger percentage of men see retirement planning as a challenge because it’s more on their minds. — Cameron Huddleston, lead reporter at GOBankingRates, on a report that men feel more retirement-challenged than women.

population. Perhaps that forward-looking optimism can be attributed to the fact that nearly twice as many millennials as the general population are looking to second jobs to help increase their existing savings (21 percent versus 11 percent).

INVESTORS STILL REELING AFTER 2008 CRASH

The 2008 market crash may be a distant memory for some, but a significant number of Generation X and the babyboom generation are still feeling its effects. When asked about the crash, more than two-thirds of Gen X and boomer respondents said they still feel the impact in how they live, work, save and spend, according to an Allianz Life study. Yet the effects of the crash have been even more profound for a distinct segment of respondents identified as “post-crash skeptics.” An overwhelming 93 percent of post-crash skeptics — which include a cross section of Gen Xers and boomers who experienced six or more major effects of the crash — said the 2008 crash still haunts them today. Accordingly, more than nine in 10 believe that the traditional definition of retirement is now a “romantic fantasy of the past.”

Turn your toughest disability cases into commission. Weâ&#x20AC;&#x2122;ll provide the coverage for you.

We proudly underwrite the many difficult cases normally declined by standard disability carriers. Our underwriters specialize in working with individuals with moderate to severe medical conditions. Our non-standard, tailored plans deliver the core coverage your clients deserve.

Benefit amount up to $10,000 per month Some of the impairments we consider: Diabetes, Heart Conditions, Cancer, Arthritis, Asthma, Obesity

To download our free whitepaper, visit ToughestDICases.com (844) 209-9633 Not available in all states. Refer to Policy contract for Explanation of Benefits, Exclusions and Limitations.

If you have a tough impaired disability case, send a brief description to our underwriters at prelims@IDUinc.com

FINANCIAL

How to Go Under the Surface to Find Wealth in Your Backyard F inding the “hidden” wealthy in your community might take some digging, but it could yield a rich reward. By Bryce Sanders

“A

fter all the work I put in, I can’t believe they have no money.” Have you ever said that after working with a prospect you thought was successful? Advisors quickly learn that some people who appear successful haven’t a bean while others who have dirty fingernails and wear bib overalls are loaded. How can you tell ahead of time?

People With Great Cash Flow

Let’s assume your ideal client fits into one of three categories: They work in a highpaying profession, they run a successful business, or they are sitting on a large pile of money they earned or inherited. What do you suppose are the highestpaying professions in your local market? Logically you think of lawyers, doctors and accountants. We faintly hear parents in the background urging their children either to become one or marry one. But are we correct? Statistics come to the rescue. Google “Bureau of Labor Statistics Salaries” fol72

lowed by your city name. The result set should include “May 2014 Metropolitan and Non-Metropolitan Area Occupation Employment and Wage Estimates” for your city. This huge table contains almost everything you wanted to know about what hundreds of different jobs pay. You may draw several conclusions from this information. Medicine pays well. CEOs, natural science managers (I’m assuming these are pharmaceutical executives) and marketing managers are the only outsiders in this top 10 list. There aren’t that many jobs in some categories.

I personally don’t know or have access to many of these people. “Wait a second!” you shout. How can CEOs make only $216,000? The news is filled with lists of CEOs who are making millions. What’s wrong with your numbers? Nothing. These are wages and salaries, not total compensation with bonuses and stock options. We are measuring apples to apples. The popular job list tells a different story. You know plenty of nurses. You are surprised those accountants — our traditional referral sources — earn about the

Case Study: Higher-Paying Jobs in the Philadelphia, Pa., Metro Area: Title

Mean Salary ($)

Local Jobs

Obstetrician/Gynecologists

245,490

Chief Executive Officers

216,410

4,190

Nurse Anesthetists

213,540

n/a

Internists

208,430

560

Family & General Practitioners

202,640

2,900

Natural Science Managers

181,840

1,440

Psychiatrists

181,090

450

Dentists, General

180,300

1,470

Pediatricians

178,340

Dentists, Other

168,850

Marketing Managers

168,400

2,470

InsuranceNewsNet Magazine » November 2015

Source: U.S. Bureau of Labor Statistics, 5/2014 data (6/2015)

THERE’S NO FUTURE IN INCOME RIDER ANNUITIES…

UNTIL NOW! IT’S ABOUT TIME THE INDUSTRY FINALLY SOLVED THE INCOME RIDER TRAP.

This is the first time in decades that advisors have a solution for the major flaws that have doomed income rider annuities – not to mention their damaging effects on your practice.

NOW, ADVISORS CAN SELL AN ANNUITY WITHOUT: • Your hands being tied from rolling over the millions in annuities you have on the books

• Settling for inferior products that never go beyond the guarantees

• Your clients having no other options the rest of their lives

• Your clients being taxed 100% of non-qualified money in retirement

THE NEXT GENERATION OF INCOME RIDER SOLUTIONS IS HERE.

Request information NOW to learn how you can free your practice, and your clients, from the income rider trap that been holding our industry hostage! Don’t wait. Take back control of your current book of annuity business. You owe it to your clients and the future of your practice.

Request information now at www.IncomeRiderSolution.com or call us directly at 866-268-2640 November 2015 » InsuranceNewsNet Magazine

FINANCIAL HOW TO GO UNDER THE SURFACE TO FIND WEALTH IN YOUR BACKYARD same mean salary as nurses. General and operations managers (plant managers) are the sleepers. That neighbor who manages the bottling plant is doing much better than you thought. Now you have a road map for finding wealthy prospects. But who are they? Visit searchsystems.net. It’s a clearinghouse for over 55,000 public access databases. Your objective is to find licensing

fits into certain categories. » Cash cows – Their business has a great profit margin. Dry cleaners and jewelers are good examples. Other businesses are ones where you have been a customer and have been overwhelmed by the size of your bill. Auto body shops come to mind. Funeral homes and florists traditionally have been lucrative. Landscapers and self-storage are niche markets.

Mean Salary ($)

Local Jobs

Registered Nurses

74,170

43,040

General & Operations Managers

137,910

21,130

yellow pages business. Scan by category (dry cleaners, jewelers) and city. Unfortunately you don’t have the owner’s name, unless it’s in the title. Now the state comes to your assistance. Most states have an office of the secretary of state with a department of corporations. Its website usually has a company name search feature. Enter the business name, and view those businesses registered in the state with the same or similar names. You should be able to see names of the owner, agent of record or officers. Beware, some states have started charging for this information. Once again, you back into where they live.

77,110

22,240

People Sitting on a Pile of Money

Secondary School Teachers

65,490

17,950

Elementary School Teachers

66,640

15,750

Case Study: Popular Jobs in the Philadelphia, Pa., Metro Area (with college education): Title

Accountants & Auditors

Source: Bureau of Labor Statistics, 5/2014 data (06/2015)

data for those highly paid prospects. Your government has been busy. Twenty or 30 years ago, only about one in 20 professions required a professional license. Today it’s about one in three! On the website, choose “Licenses” and on the next screen, choose your state. Dozens and dozens of categories will appear. It’s likely you are concentrating on the medical profession. Sites differ by state. Ideally, you can search by a town or ZIP code and get a list of all the doctors in your area — active, retired and deceased. The site often includes address information. However, some states don’t have that information on their websites, and other states charge for accessing certain levels or types of data. Honest people leave big footprints on the Internet. If you don’t have a residential address, run the prospect’s name through an online version of the white pages telephone book. Often they are listed with a street address. If all this sounds like a lot of work, think “intern.” If you don’t have access to an intern, many state regulatory authorities will sell you the address data.

Owners of Successful Businesses

What makes a business successful? Longevity is a good clue. If the business has been around for 10 years or longer, the owners probably are doing something right. Another clue is whether the business 74

» High volume – You don’t spend a lot at these businesses, but you stand in line to hand over your money. Convenience stories qualify in this category because of their high markups. Gas stations and car washes spend the day taking in money. » Hourly services – Plumbers, electricians and auto mechanics do well. When you are billed for parts and labor, the parts often are a tiny fraction of the overall bill. The work still needs to get done. » Highway construction – You’ve seen the orange cones on your morning commute. When will this construction ever be finished? It’s often a unionized business, and the bill is paid by the federal or state government. These contractors do well for themselves. » Fast-food franchises – You’ve always suspected these owners belong to a closed society of fellow owners who socialize among themselves. They often own multiple units of the same franchise. They often do very well too. In some cases, these businesses require licenses. Electricians, plumbers and funeral directors fit into this category. Searchsystems.net is a good resource to find more information. Others can be found by doing old-fashioned legwork. The people who bring you the white pages online are often in the

InsuranceNewsNet Magazine » November 2015

You’ve heard the saying, “We made our money the old-fashioned way. We inherited it.” Others achieved their wealth by starting, growing and selling a business. Frequently, these people are philanthropists, feeling a need to enrich the lives of others by donating to institutions such as museums and hospitals in the community. Like listed public companies, these nonprofit institutions also issue annual reports documenting where the money came from and how it was spent. These reports often list donors by giving category, although donors can choose to remain anonymous. These annual reports often are found on the institution’s website. Backing into residential addresses isn’t difficult. Is all this research worth your time and effort? When you finally connect with prospects and they express interest, there’s a high likelihood they have the potential to be major clients. Bryce Sanders is president of Perceptive Business Solutions in New Hope, Pa. He provides high-net-worth client acquisition training for the financial services industry. His book Captivating the Wealthy Investor can be found on Amazon.com. Bryce may be contacted at bryce.sanders@innfeedback.com.

Like this article or any other? As seen in the

July 2012 issue

Life

Annuities

of InsuranceNewsNet

Magazine

Health July 2012

Exclusive digital report for LIMRA Member Companies and their Producers. This report may be redistributed freely and may not be edited or modified without permission from InsuranceNewsNet.

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

THE SCRIPT FLIPPED

ON LIFE INSURANCE. Introducing MetLife Premier Accumulator Universal Life

The High Early Cash Value Accumulation Clients Need. The Compensation Structure You Want. 1 A Simplified, Faster Underwriting Process . Visit paul.metlife.com to learn more.

All eligible clients who qualify for Standard Rates without an extra premium will receive the upgrade. Clients with certain factors - including, but not limited to, rateable medical impairments and other health or lifestyle risks that require an extra premium - do not qualify for Standard Rates or program upgrades and will proceed through traditional underwriting.

MetLife Premier Accumulator Universal Life is issued by MetLife Insurance Company USA on Policy Form 5E-37-14 and in New York only by Metropolitan Life Insurance Company on Policy Form 1E-37-14-NY. All product guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. 1509-262432 CS

BDUL111709

ÂŠ2015 METLIFE, INC.

L0615426811[exp0616]

November 2015 Âť InsuranceNewsNet Magazine

BUSINESS

The Experience Trap: How Your Selling Process Can Kill Sales F alling into the same routine can put you in “presentation” mode with prospects and lead to no sale. By Jeff Spain

recently had the opportunity to work with three people who represent three different insurance sales distribution models: the traditional insurance agent who calls on clients face to face, a call center sales agent and an insurance carrier sales/ marketing representative. Each area of distribution faces challenges unique to its sales model, yet all three have a common theme in having a sales process and a common challenge in following that sales process. The three sales representatives with whom I worked are very successful in the industry. They have a strong history of prospecting, sales performance, client retention and asking for referrals. The three agents are well-trained in the art of building rapport, asking questions to uncover aspirations and afflictions, telling stories, establishing value, and asking for the business. The problem was that all three were in a slump. All three were struggling to meet their personal goals, struggling to close a sale and frustrated with their work. These factors created frustration in their personal lives as well. Looking for answers, we went back to how the agents started in the business and how they got to where they are today. How did they get started in the business? How did they first learn how to sell? Each agent related a similar story: They had a mentor who taught them the sales process, someone they followed and observed selling and who followed them to be sure they followed the sales process. So we went back to the beginning and scheduled some joint calls in order to observe them following the sales process. I would like to say that we had a sales epiphany triggered by exceptional sales coaching and mentoring, but there were 76

no revelations and no new sales ideas or gimmicks. All three agents basically did the same thing; all three reps fell into the trap of experience. History tells us experience makes us wiser and repetition makes us better. Experienced sales agents gain great value from each sales call, such as what products most people want, the most common benefit levels, average policies per household, average premiums they can afford, etc. Repeating the sales process time after time enhances the sales process: You know the needs most common to families and individuals, and you can anticipate the most common objections, relate stories that enhance product value, and feel comfortable closing the sale and asking for business. Experience and repetition sound great, so what is the trap of experience? Each of the sales agents was too quick to get into “presentation” mode. They have done this routine so many times that they knew what the prospect needed, they knew the objections and they knew the story the prospect needed to hear. So the agent went into a 20-30 minute monologue. Granted, it was great information.

InsuranceNewsNet Magazine » November 2015

What they said was spot on, they presented great product information, they told great stories and they asked for the business. The problem was that the prospect was left out of the conversation. At the close, the prospect wanted to “think it over.” Thus, no sale because no connection was made. The prospect’s aspirations and afflictions were not uncovered, and value was discussed only by the agent, so no value was created in the presentation. Experience became the agent’s trap, causing him to know and assume too much. The odd thing about the experience trap is that the prospect who had to “think it over” with the agent who did the 20-minute stand-up routine most likely bought very similar products and benefits from another agent, someone who followed the sales process. The next time you lose a sale or are told “I want to think it over,” ask yourself: In the meeting, who did the majority of the talking? What questions did I ask? Did I follow the sales process? Did I fall into the trap of experience? The lesson here is: When in doubt, follow the sales process. Most sales

THE EXPERIENCE TRAP: HOW YOUR SELLING PROCESS CAN KILL SALES professionals develop their own sales process, which follows four key steps: 1) Build rapport. 2) Conduct a needs analysis to uncover the prospect’s afflictions and aspirations. 3) Discuss the impact of taking action versus taking no action. 4) Build the new reality of the future, if the prospect goes forward with you. Here are some items to focus on. If you are talking more than the prospect is, then ask questions and shut up and listen. Some examples of key questions to ask are: What do you want to accomplish? What does retirement look like to you? You stated you wanted to retire a few years from now — what do you plan to do then? What challenges do you expect? Whom do you know who has had a heart attack, cancer or stroke? Did it affect them financially? What would happen if you lost your paycheck for a month, six months, a year? Focus on the financial impact of a prospect’s decision to act now or to wait. Have stories ready of the financial impact on those families who put off making decisions. Calculate the financial impact of the loss of a breadwinner, and communicate

BUSINESS

The next time you lose a sale or are told “I want to think it over,” ask yourself: In the meeting, who did the majority of the talking? the emotional impact of that loss. Be prepared to discuss the financial impact of surviving a critical illness or accident. Good stories describe people, perhaps yourself, who have been there and have experienced loss. Selling is an emotional experience. Building the new reality? Paint the picture, the picture of their future, their retirement, their children’s future. Use graphs, charts or carrier product projections. Closing the sale is educating your clients to move forward, communicating the value of your service and what you are providing for them. It is easy to backslide and fall into the trap, especially when you have been successful at educating your prospects and getting them to say yes. And yes, you will know what most of your prospects want and need. You will know the questions prospects most

likely will ask, and you will know their most common objections. But be patient, follow the sales process and avoid “presentation” mode. Your clients need you. LIMRA states that life insurance ownership is at a 50-year low and the majority of households recognize they are underinsured. LIMRA also shares through their 2015 Insurance Barometer Study that consumers are most concerned about having enough money to retire comfortably. Slow down, follow the sales process and help your clients. Jeff Spain is vice president, channel sales, with Surebridge Insurance, North Richland Hills, Texas. Jeff may be contacted at jeff.spain@innfeedback.com.

www.

to Partner With

www.tbrins.com ofessional producer, you need accurate and timely information, not only about products but also about the marketplace i ring with an agency that has their finger on the pulse of the ever-changing marketplace, whose primary focus is on Senior Who to Partner With lds contractsAswith A rated carriers that offer the best solutions for your clients, is a compelling reason to do so. a professional producer, you need accurate and timely information, not only about products but also about the marketplace in general. Partnering with an agency that has their finger on the pulse of the ever-changing marketplace, whose primary focus is on Senior products, and

The Brokerage Resource? that holds contracts with A rated carriers that offer the best solutions for your clients, is a compelling reason to do so.

Why Theof Brokerage Resource? ve the best selection Senior Health Insurance products for your clients. Among our list of highly rated carriers for Medi WeOmaha, have the best selection of Senior Health Healthcare Insurance products for yourand clients. Among our list don't of highlyrequire rated carriers Medicare Supplere: Mutual of Cigna, Aetna, United (AARP) Medico. We anyforcontractual obligations ment are: Mutual of Omaha, Cigna, Aetna, United Healthcare (AARP) and Medico. We don't require any contractual obligations that require be captive. You retain your independence; while we help you maximize your time – so you can concentrate on sales. Our you to be captive. You retain your independence; while we help you maximize your time – so you can concentrate on sales. Our expert ting and SalesMarketing team will helpteam youwillchoose andand products that a correct fitand foryour you and your clients. and Sales help you carriers choose carriers products that areare a correct fit for you clients. Call us today, and let us help you expand your growth potential. Call us today, and let us help you expand your growth potential. 800.928.4998 800.928.4998

November 2015 » InsuranceNewsNet Magazine

MDRT INSIGHTS

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

Give Clients a Seamless Customer Experience H arness the power of technology to make it easier for your clients to buy. By Ryan J. Pinney

ur specialized knowledge and planning capabilities are more relevant than ever as clients struggle to deal with stock market volatility, uncertainty over Social Security and the difficulty of saving for retirement. Our challenge as advisors is to align the way we do business with the way our clients and prospects shop. We need to know how and where they obtain information and what products meet their needs. Then we need to deliver that information directly. Technology allows us to do all these things. I believe the best way financial advisors can harness technology is to standardize their procedures, then systematize and automate as many of those procedures as possible. The following principles help us provide our clients and prospects with a seamless customer experience.

Step 1: Automate Sales

Technology has made it possible for us to automate and delegate much of the paperwork associated with insurance sales. Talking about paperwork isn’t as revolutionary as talking about wearable tech, for example, but it is a good place to start, considering how far our industry lags behind mainstream e-commerce. Today, the closest we come to sales automation is with drop-ticket processing using eApplication, eSignature and ePolicy delivery. Over the past decade, brokerage general agencies (BGAs) have worked to integrate these digital platforms with the carriers. If you’re not using these platforms, you’re giving up valuable time that could be spent meeting with clients, prospecting or marketing. Using a BGA’s back-office support for drop-ticket processing gives you two clear advantages. First, it gives you a tech-savvy partner to walk your client 78

through the application process, including tech-related troubleshooting. Second, it gives you the benefit of a case manager and support staff, allowing you to grow your business and focus on selling.

Step 2: Automate Marketing

If you’re already on board with the eApplication model, there’s another tech frontier that insurance agents need to cross sooner rather than later. It involves automating marketing procedures using a client relationship management (CRM) system, which usually refers to cloud-based software programs. At the most basic level, a CRM system is a digital filing cabinet that stores your client data, including contact information, notes and policy details. Your data is stored in the cloud so you can access it anywhere. For example, if you’re prospecting with millennials, you can use a smartphone or tablet to access client data or quote prospects on the fly — handy for meetings that happen away from your office. CRM systems can do more than manage contact information. A good system also will help you run digital marketing campaigns aimed at targeted audiences within your book of business. For example, you can use your system’s tagging capabilities to indicate which clients are seniors, millennials, diabetic, high-networth, etc. You then can run a customized report creating a list of clients with a particular tag — and there’s your built-in niche marketing list.

Step 3: Expand Your Horizons

Big data is changing the way we market insurance. One side effect of technology is information overload. This is particularly true of social media and the data it collects about our interests and habits. How do we cut through the chatter and find new clients and prospects? You start with what you already have — the targeted marketing niches within your book of business, identified with the help

InsuranceNewsNet Magazine » November 2015

of your CRM software. Let’s say you send an email to your clients every September to promote Life Insurance Awareness Month. Using your CRM’s tagging and reporting, you can tailor one email to a senior audience and another to a millennial audience. Or you could segment content on your website, targeting by audience type (producer, agency or carrier). Using free tools such as Google Analytics, you can track clicks and tailor future content toward your largest audience. Now let’s take this idea one step further. You could also use your CRM’s tagging and reporting to build a marketing list for millennial prospects who obtained a quote from your website, but didn’t purchase a policy. Now you can export that data and use it to create what’s called a “custom audience” for social media advertising. You could serve up ads to them on their favorite social media networks, offering free eBooks, guides or even a consultation to bring those prospects back into your marketing funnel.

The Future Is Now

It’s time to think about the way we source, manage and act on the data that technology continues to provide. If you think there’s a lot to deal with now, imagine being flooded with consumer data from digitized medical records and wearable tech devices. In the near future, life insurance could be sold by online retailers with customers uploading their own health data for instant approval. There’s still a place for an individual agent in that formula. It’s important to add the mantra “standardize, systematize and automate” to your business today. Ryan J. Pinney is a seven-year MDRT member with seven Top of the Table qualifications. Ryan was recently recognized as one of the 2015 AdvisorToday “4 under 40” Financial Advisors. He may be contacted at ryan.pinney@innfeedback.com.

Always Wanting More Protection Always Needing More DI

GSI High Limit DI

If you are not selling GSI High Limit DI you have no idea what you’re missing. Instead of the $3,000 to $5,000 commission cases of the individual market, the GSI market boasts regular commissions of $300,000 to $500,000! We are serious and there is a fortune to be made in the guaranteed-issue disability (GSI) marketplace.

Disability • Life • Medical • Contingency

Petersen International Underwriters

(800) 345-8816 F www.piu.org F piu@piu.org November 2015 » InsuranceNewsNet Magazine

With over 87 years of experience, The American College is passionate about helping students expand their knowledge and opportunities as financial professionals.

THE AMERICAN COLLEGE INSIGHTS

Ex-Soldiers Learn to Be Financial Heroes to Clients M any of the key characteristics of a good soldier are also the key characteristics of a good financial planner. By Sheila Runkel

ill in the blanks: A leader who can instill a sense of confidence in others, a confidence based on a plan of action tailored for a particular mission, would make an ideal __________________________________. Operating with limited resources to reach a known target is important for the ideal ______________________________. Leadership, persistence, knowledge and empathy are marks of an ideal __________________________________. If you filled in the blanks with “soldier,” you would be right. If you filled in the blanks with “financial planner,” you also would be right. That’s because many of the key characteristics of a good soldier are also the key characteristics of a good financial planner. Perhaps the most important element for both professions is a calling to service. At the Penn Mutual Center for Veterans Affairs at The American College, we have heard from more than a few of our veterans that, following the attacks on the World Trade Center, their priorities suddenly shifted. College and career plans were deferred as these men and women volunteered to fight at a time when fear was the national pastime. What they had wanted to do with their lives suddenly didn’t matter as much as participating in a cause greater than themselves. As their tours of duty in the military came to a close, they had to open new doors and try to find a meaningful and rewarding purpose as they made the transition to civilian life. Many found the opportunities they were looking for in the financial services profession. In the financial services industry, working with clients is viewed less as a job and more as a vocation. It is a perfect fit for 80

As their tours of duty in the military come to a close, soldiers have to open new doors and try to find a meaningful and rewarding purpose as they make the transition to civilian life. veterans because it requires from them the same kind of energy and commitment that they demonstrated during their time in military service. Instead of working within a military unit, they are collaborating with other professionals and with their clients to devise the best plan to move families toward financial security. They are making sure their clients have adequate protections against the risks and perils that can unravel a dream. They are using the resources at hand, which are often limited, to reach the client’s financial goals. They can adapt to even the most stressful situations because they have a carefully crafted plan in place. They have a high level of personal responsibility and a high ethical standard. They have a true empathy for those going through life-changing circumstances. They know what is important and what is not, because they have seen it all during their deployments. They derive great satisfaction from making a positive difference in people’s lives. In the increasingly complex financial world of today, financial literacy is more important than ever. Often, young service members fall victim to predatory lending and can get themselves into trouble upon transitioning out of the military. Many of them have a housing allowance or disability check arriving every month. If they are not educated on best practices early on,

InsuranceNewsNet Magazine » November 2015

they could make poor decisions that set them up for long-term financial disaster. Many of our students have said that they wanted to use their education to help prevent younger service members from making the same mistakes that they had made. That commitment to service goes well beyond the military realm. The need for sound financial guidance exists nationwide for civilians as well. Helping others is a product of the honorable tradition of service that dates as far back as the military itself. The word “hero” often conjures up images of military glory, of sacrificing oneself for another in the heat of combat. But to a single mother who has just found out that she will be able to save for her children’s future, or to a young couple who thought home ownership never would be a reality for them, these men and women will remain heroes long after turning in their uniforms. After doing their part to secure our nation’s freedom, our students are dedicated to helping others secure their financial freedom. Now that’s service! Sheila Runkel is program manager for The American College Penn Mutual Center for Veterans Affairs. Sheila may be contacted at sheila.runkel@innfeedback.com.

NAIFA HELPS YOU

GROW

Your professional association has never been more important to your career than it is today.

YOUR BUSINESS

NAIFA’s LUTCF Successful insurance and financial services careers are deeply rooted in product knowledge and effective sales skills. The new NAIFA LUTCF curriculum combines product-focused education with hands-on sales training to help newer advisors thrive in a competitive industry.

Errors & Omissions Coverage CalSurance for NAIFA members includes multiple coverage benefits and customizable coverage options for individuals and agencies. The NAIFA/CalSurance Risk Management/Loss Control Seminar can save you up to 10% on your policy for the next three policy terms.

College for Financial Planning NAIFA’s partnership with the College for Financial Planning includes a 15% discount for NAIFA members. Founded in 1972, The College created the Certified Financial Planner™ (CFP®) certification and is the exclusive provider of eight additional industry benchmark designations, Series Exam Prep courses, and three Master of Science degrees.

NAIFA’s Advisor Today Magazine Advisor Today is the premier source for practice management content and industry news. NAIFA SmartBrief All the insurance and financial news you need, every day, in a two-minute read.

These are just a few examples of how NAIFA benefits your career. Join today and start growing your business like never before.

Go to www.NAIFA.org/ItPays or call 1-877-866-2432.

November 2015 » InsuranceNewsNet Magazine

NAIFA INSIGHTS

Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.

NAIFA Fights for Workable Rule T he association seeks a rule that will not hurt middleincome retirement savers. By Judi Carsrud

AIFA is waging a fight over the Department of Labor’s (DOL’s) proposed fiduciary rule — either to make the rule workable or to have it replaced with something that will not deny middle-income retirement savers access to affordable professional investment advice. NAIFA’s effort on this issue is extensive. The association has met many times with the DOL and has submitted three comment letters to the department. NAIFA President Juli McNeely and one of her small-business clients testified at the DOL hearings on the proposed rule in August, and McNeely also testified at a House Financial Services committee hearing in September. In addition, NAIFA leadership and staff have met with key White House personnel, and thousands of NAIFA members have met with members of Congress. NAIFA also is working with industry allies to draft legislation that achieves what the DOL says is its objective — to have an enforceable commitment to work in the client’s best interest, but without the unnecessary burdens and conditions of the DOL’s current proposal.

The DOL Proposal

The DOL proposal defines investmentadvice fiduciaries as advisors who provide advice to their clients for a fee. DOL rules do not allow fiduciary advisors to have any conflicts of interest; thus, receiving commissions or other forms of third-party compensation is prohibited. However, ERISA fiduciary rules include exemptions, called prohibited transaction exemptions (PTEs), that allow otherwise prohibited compensation arrangements if certain conditions are satisfied. DOL’s proposed rule contains PTEs, but they simply do not work in real-world advice situations.

Areas of Concern

The proposed regu lation and its 82

exemptions are complex. Here are NAIFA’s areas of concern. » The DOL proposal is well-intentioned, but unless it is substantially changed, it will hurt middle-income savers. People of modest means either cannot afford or are not comfortable with fee-for-service advice. In comparing the costs of commissions versus asset-management fees for a small retirement saver, we found that the saver would pay twice as much over a 20-year period for an asset-based service arrangement as opposed to paying commissions. » If left with less choice and less advice, fewer people will take the steps needed to put in place a long-range plan to fund their retirement. They need more, not less, advice on whether and how to save for the long term. » The Best Interest Contract (BIC) exemption — which almost all NAIFA members will need to use in order to provide fiduciary advice to their middleincome clients — not only adds significant implementation costs, but also adds costs due to a considerable increase in the risk of litigation. » The DOL minimizes the likelihood for lawsuits based on poor investment performance, but there will be more lawsuits. And while many will be resolved in favor of advisors who behaved appropriately, the cost of defending and insuring against that risk will be substantial. » The BIC exemption creates a barrier to advice by requiring the advisor and all the financial institutions offering products to execute a signed contract, acknowledging fiduciary responsibility, before the advisor makes any recommendations. The cost to explain it to clients while the advisor is still building trust is likely to be prohibitive. » The DOL proposal is complex and requires creation and implementation of an entirely new compliance regime. There

InsuranceNewsNet Magazine » November 2015

will be massive market disruption, and many middle-income retirement savers will suffer without advice about their retirement-planning decisions. » Additional complexity will adversely impact the use of annuities. Different sets of rules would govern fixed and indexed annuities, as compared with variable annuities. Annuities, with their lifetime income guarantees and ability to manage longevity risks, are the retirement-planning vehicle of choice for many middle-income savers. » Unlike their wealthier counterparts who can afford and are comfortable with fee-for-service investment accounts, middle-income savers cannot use their modest account balances to self-annuitize. They need the guarantees provided by annuities. And the DOL proposal governing annuities makes it more difficult — and for some, impossible — to advise on annuities. » Many NAIFA members are agents or affiliates of insurance companies that primarily offer their own products or may have limitations on sales of other companies’ products. » The DOL rules must make clear that advisors who offer annuities and/or “proprietary products” do meet the impartial conduct and best interest requirements of the rule. Advisors and their clients should remain vigilant and contact their congressional representatives, expressing support for a legislative alternative to the DOL’s proposed rule and requiring the DOL to open a new Notice and Comment period before finalizing any regulation. Judi Carsrud is director of federal government relations at NAIFA. Judi may be contacted at judi.carsrud@ innfeedback.com.

e t a m i t l The U

ADVERTISER INDEX Phone

X n e G

Advertiser

Website

3-Mentors

www.incomeallocationu.com

Advisors Assistant

www.advisorsassistant.com

Aflac

www.aflac.com/broker

AgencyHQ

www.hqview.com

AIMS Benefits

www.dominateltci.com

American Equity

life.american-equity.com

Assurity Life

www.howlifeischanging.com

BackNine

www.back9nevermiss.com

Bankers Fidelity

www.myapp2rewards.com

Bedrock Financial

www.publicsectorprofits.com

Brokerage Resource

www.tbrins.com

Brookstone Capital

www.riakickoff.com

Cannex

cannex@cannex.com

800-387-1269

Celebrity Branding

www.celebritybrandingagency.com/mybook

888-710-5584

College Funding Solutions

www.biggestconcernsolved.com

844-264-2201

College of Financial Planning

www.cffpinfo.com/lutcf

eMoney Advisor

www.emoneyadvisor.com

eNoah

www.enoahisolution.com/industries/insurance/

Equitable Life

www.equilife.com

844-670-6945

2-3

EquiTrust

agents.equitrust.com

866-598-3694

DTCC

www.dtcc.com/standardizelife

Foresters

term.foresters.com

Fortify Insurance Group

www.diforattorneysreport.com

Great-West Financial

www.greatwest.com

Guardian Life

www.nextgenwholelife.com/insurancenewsnet

Guggenheim

www.trivystakit.com

844-331-2775

Insurance Network America

www.ultimateannualreview.com

844-328-6496

Imeriti Financial Network

www.iulsalesgrowth.com

855-601-9442

42-43, GF

Impaired Disability Underwriters

www.toughestdicases.com

844-209-9633

Interweb Insurance

www.instanteocoverage.com

855-704-3206

John Hancock

www.jhredefininglife.com

6 800-799-4267

r: e n e p O Door

Ins 888-647-1371

33 800-928-4998

77 IBC, Ins

ADVISORS

Turn disinterested LIFE and ANNUITY prospects into long-term LIFE and ANNUITY clients.

59 800-520-7271

IFC 5

Legal & General America

Finally a solution that’s a Win, Win, Win. It changes YOUR life (commissions), the lives of your clients (happy clients = referrals), and has more Gen Xers qualify than you can imagine.

Levinson & Associates

www.insurancetechupgrade.com

800-375-2279

LifeSecure

www.yourlifesecure.com

866-582-7701

Market Domination

www.ultimatemarketingmagician.com/inn

MDRT

www.joinmdrt.org

MetLife

paul.metlife.com

Minnesota Life

www.securian.com

888-413-7860 opt 1

Morgan White Group

www.dfeinfo.com

877-759-5728

Solve Gen Xers’ # 1 concern (it’s not retirement) and they will come to YOU with all of their additional financial needs.

Mutual of Omaha

A brand new white paper, “How to Solve Gen Xers’ # 1 Concern” reveals the solution and will tell you exactly how to dominate the industry's hottest market!

NAIFA

www.naifa.org/itpays

877-866-2432

National Alliance

www.thenationalalliance.com

800-633-2165

Oxford Life

www.oxfordlife.com

888-203-6221

Peak Pro Financial

www.incomeridersolution.com

866-268-2640

Petersen International

www.piu.org

800-345-8816

Protective Life

www.sellwhatmatters.com

Prudential

www.prudential.com/benefitaccess

844-606-7873

Sagicor

www.sagicorlifeusa.com/accelewriting

888-724-4267 ext 4680

46-47

Speaking Empire

www.freepresentainerkit.com

Tucker Advisors

www.tuckerdifference.com

Vertafore

www.sirconplm.com

WINK

www.looktowink.com

19, 21

69 855-454-2638

BC 36-37

855-275-9465

Download our FREE white paper at:

BiggestConcernSolved.com or call 844.264.2201 for more information.

November 2015 » InsuranceNewsNet Magazine

More than 850 financial services companies in more than 70 countries turn to LIMRA first to help them build their businesses and improve their performance.

LIMRA INSIGHTS

Robo-Advisors: Threat or Opportunity? I'll be back... with your policy.

2) Support Multigenerational Client Strategies

A n alarming number of insurance professionals are unfamiliar with robo-advisors and don’t believe they will have an impact on the industry. By Scott Kallenbach and Konrad Wisniewski

he latest Arnold Schwarzenegger Terminator movie was a hit with audiences around the globe last summer. The central theme of the movie franchise involves artificial intelligence that has become self-aware and views humans as a threat. The rogue artificial intelligence starts a nuclear holocaust to wipe out mankind, but humanity fights back and endures. With the arrival of robo-advisors, some worry that the financial services industry is facing a similar peril (minus the nuclear holocaust). So, do robo-advisors represent a threat or an opportunity? LIMRA defines a robo-advisor as an online portfolio management service that provides automated advice based on algorithms. Many, if not all, roboadvisors base their algorithms on modern portfolio theory. There is minimal human interaction, and exchange-traded funds (ETFs) are used to allocate investments based on investor goals and risk tolerance. Robo-advisors currently do not offer solutions to more complex financial needs such as insurance or retirement and estate planning. As robo-advisors evolve, we’re seeing a shift from retail to institutional use. Robos originally were targeted directly to consumers, but we are seeing increased adoption by the institutional side with firms such as Schwab, Vanguard, BlackRock and Fidelity entering the market. These firms largely cited “practice management” behind their robo-advisory strategies. They want to help their partners improve their practices by expanding their respective markets. What do sales professionals think 84

to the robo-advisor alternative, are tomorrow’s clients. The financial advisor business model must evolve in order to keep pace. Sales professionals will need to include technology-driven alternatives. But don’t adopt technology just for the sake of doing it; the technology must improve the customer experience.

about robo-advisors? It depends. LIMRA surveyed its Panel of Financial Professionals and found that seven in 10 of those who focus on insurance (career and independent insurance agents) were not at all familiar with the capabilities of robo-advisors. By contrast, independent investment advisors were more knowledgeable about robo-advisors, with only three in 10 advisors saying they were unfamiliar with them. Perhaps more alarming, about half of the participants in our study do not think robo-advisors will have an impact on the financial services industry. Those who feel this way may be shortsighted. Over the next five to 10 years, we may see robo-advisors take a more holistic view of client needs and offer not only more sophisticated investment options, but also life insurance and related products. It would not be surprising to see life insurance companies create products specific to this platform as a way to gain access to another distribution channel. We see trade press coverage of roboadvisors nearly every day, but this information is not reaching the larger public. LIMRA research found that eight in 10 consumers are not aware of roboadvisors. Only 5 percent of all consumers currently use a robo-advisor, and most of them tend to be young. Generation Y (11 percent) and Generation X (7 percent) consumers are far more likely than baby boomers (1 percent) to use a robo-advisor. The increasing impact of robo-advisors may present opportunities for sales professionals when they:

1) Think Long Term

Today’s younger investors, who are attracted

InsuranceNewsNet Magazine » November 2015

The next generation of clients is very comfortable using technology. Using a robo-advisor platform may help fill the pipeline with new, emerging affluent clients. Compared to Gen X and the baby boomers, Gen Y is more familiar with robo-advisors and more likely to be using one. Capitalize on the opportunity to use the platform to engage with the children of existing clients.

3) Expand Offerings

Sales professionals who focus on life insurance can leverage a robo-advisor platform to bolster their investment management capabilities. This platform can help fill the needs for those who may not have the time or expertise to provide investment management solutions. Back in the second Terminator movie, Arnold Schwarzenegger’s character was reprogrammed to protect young John Conner rather than terminate him. Man and machine worked together for a better tomorrow. Forward-thinking sales professionals who can harness the power of “the machines” also may enjoy a better tomorrow. Scott R. Kallenbach, FLMI, is the research director for LIMRA’s strategic research program, which identifies and examines strategic issues that can impact the financial services industry. Scott may be contacted at scott.kallenbach@ innfeedback.com. Konrad Wisniewski is a research analyst for LIMRA’s distribution and technology research arm, which supports investment-focused distribution research including financial institutions, fullservice and independent broker/dealers, and registered investment advisors. Konrad may be contacted at konrad.wisniewski@innfeedback.com.

KICK OFF

AV N AI OW LA BL E!

2016 WITH A WINNING

GAME PLAN Find out how to give your clients the nimble approach they’re looking for in today’s volatile markets. Get everything you need to succeed in 2016 with the Brookstone RIA Starter Kit. Download today to learn: • How to attract and retain the best clients • What the right (or wrong) platform could do for your practice • 4 ways to maximize your growth and profitability • PLUS! The industry’s #1 advisor training guide

Get it free today at

www.RIAkickoff.com

LITTLE FISH,

BIG POND? GET THE 1:1 ATTENTION YOU DESERVE, WITH TUCKER ADVISORS.

Our staff acts as your back-office support, to assist you with your case design, marketing, and technology needs.

CALL 855.454.2638 TO LEARN MORE TODAY.

INTEGRITY. VALUE. TRUST.