PUTTING THE LUCK BACK INTO ’13 building. But regulators will be defining this law with renewed fervor, which has potential impact on how many advisors will do business. Tax treatment: As the nation careens toward the fiscal cliff, Republicans and Democrats are still far apart on spending cuts and revenue, but they agree on one thing: Revenue has to increase. That puts the target on tax treatment that the insurance industry has come to depend on. Estate tax cliff: Contributing Editor Linda Koco covered this very well in the November edition of InsuranceNewsNet Magazine, and this remains one of the top issues for our industry. Typically, estate taxes are not discussed when the subject turns to the fiscal cliff, but the impact would be significant for our industry because it would affect anyone with even a moderate net worth. This also is a key area of opportunity for insurance producers. The fiscal cliff: This is the combination of automatic, drastic spending cuts and tax cut expirations taking place at the end of this month. It will mean a lot less money for people to invest or pump back into the economy. If somehow by miracle or accident a deal is struck, more permanent tax reform will still be coming. Demographics: The insurance sales force is aging, as are the clients. So, not only are fewer families covered but fewer agents are selling because younger producers tend to become financial planners. Of course, the opportunity side of demographics is the constantly growing need for insurance products to protect retirement financing. All in all, it makes a person almost hope the Mayan calendar is right about the end of time coming on Dec. 21. This year has the potential of affecting insurance producers in the two ways that matter most: how they do business and what they have to sell.
Interest Rates and Capital Requirements
Companies are recrafting products and sometimes abandoning them altogether
because of interest rates and tougher capital requirements. The prolonged low rates and promises of higher returns embedded in many longstanding policies and contracts have companies talking quietly about preventing what until recently has been an Asian phenomenon – the negative spread. Guarantees are the most vulnerable element, even though they have been driving sales growth in the wake of the 2008 crash. When variable annuities sagged in
FEATURE
sales, withdrawal guarantees helped fortify the products. As universal life policies evaporated from drained cash value, no-lapse guarantees saved the day. Then, underlying every policy from the stalwart term life to every insurance and annuity innovation since, is the promise of decades-long sustainability. All of that is endangered. At LIMRA’s annual meeting in October, CEO Robert Kerzner laid it out in stark terms.
GOOD LUCK CHARMS Four-Leaf Clover Supposedly, one in 10,000 clovers has four leaves. That makes them a rare find, but for luck, you have to discover one accidently. But we know about lucky accidents. You have to be in the right place (or field) and doing the right thing for luck to find you. Horseshoes Theories abound on why horseshoes are lucky, but like the four-leaf clover, they are luckier if found by accident. Also, iron was apparently thought to be a magical metal, so iron horseshoes are considered luckier than the more modern steel ones. There is the tale of St. Dustan, a blacksmith who recognized the devil because of his cloven hooves, which apparently needed shoeing. From there the legend gets a little murky, and, frankly, a little weird, but the upshot is something St. Dustan did ensures that if you put a horseshoe over your door, the Devil cannot enter. So, just do it and keep the ends up to capture the good luck. Rabbit’s Foot Why would a severed appendage be good luck? It could be because rabbits were considered signs of fertility or that they were considered evil because they live underground. In any case, they have been considered good luck for some time, since 600 B.C. by some estimates. It can’t be any foot either. Some point to African American hoodoo tradition in which the item must be the left hind foot cut from a rabbit shot or captured in a cemetery. On a full moon. On a Friday. Of course, you’d have to be pretty lucky in the first place for all that to happen. Mojo According to African American hoodoo tradition, the mojo was a small bag of blessed material to ward off bad spirits and bring luck to the wearer. The bag could contain items such as roots, herbs, animal parts, minerals, coins, crystals, good luck tokens and carved amulets. Probably, the talisman helped people create their own luck by infusing the owner with self-confidence. So, anyone can find his or her own mojo to carry – but the key is to get it working.
December 2012 » InsuranceNewsNet Magazine 19