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Special Section • P. 24

How COVID-19 has reshaped fundraising and refocused philanthropy PAGE 18


Small Town, Big Vision PAGE 8

How The Student Becomes The Advisor PAGE 14

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IN THIS ISSUE 18 Virtual Virtues

View and share the articles from this month’s issue

» read it




38 Benefits Boost Financial Wellness As Well As Physical Wellness

By Susan Rupe

By Susan Rupe Workers are stressed financially and are looking to their employers to help them attain security.

The COVID-19 pandemic has inspired advisors and the industry to give back in creative ways.


6 Biden Transition Expected To Hit DOL Rule, Enforcement Direction


42 Esoteric ABS: Learning Curve May Be Worth Possible Yield By Paul Norris Asset-backed securities (including esoteric) offer portfolios additional diversification as they are backed by a variety of assets not found in traditional fixed-income strategies.


14 H  ow The Student Becomes The Advisor

By John Hilton The Biden administration is likely to represent a 180-degree turn from the economic policies of the Trump administration.

By Susan Rupe Gregory Dexter draws upon his grandfather’s wisdom while forging his own path in the insurance and financial services world.


46 Get Off The Shame Cycle And Back On Your Resolutions


30 Politics Is The Wild Card In Planning For Taxes By Ron Sussman Now would be good time to start looking at using life insurance for tax planning while the exemptions and favorable tax rates are still available.


8 Small Town, Big Vision

Greg Gagne was struggling as many do early in their careers. But, as he tells Publisher Paul Feldman, with the help and inspiration of mentors, he expanded his vision and grew from a scrappy seller into a business owner.




34 T he Money Tree Strategy That Keeps Money In The Family By Deborah A. Miner A multigenerational income strategy can continue a grandparent’s support of other family members with annual payouts after death.

By Steven A. Morelli Don’t let a slip-up cause you to abandon your resolutions for 2021. Instead, grab the levers of self-efficacy.


48 What One Advisor Learned From The Pandemic By Osmar Garcia The “right” way to adapt looked different for everyone having to face unexpected challenges.


275 Grandview Ave., Suite 100, Camp Hill, PA 17011 717.441.9357 www.InsuranceNewsNet.com PUBLISHER Paul Feldman EDITOR-IN-CHIEF Steven A. Morelli MANAGING EDITOR Susan Rupe SENIOR EDITOR John Hilton VP SALES Susan Chieca VP MARKETING Katie Frazier


James McAndrew Matthew Fishgold Jacob Haas Bernard Uhden Shawn McMillion Megan Kofmehl Jen Wingard


Kelly Cherrup Ashley McHugh Sarah Allewelt Samantha Winters David Shanks Sapana Shah

Copyright 2021 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 275 Grandview Ave., Suite 100, Camp Hill, PA 17011, fax 866.381.8630 or call 717.441.9357. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 717.441.9357, Ext. 125, or reprints@insurancenewsnet.com. Editorial Inquiries: You may e-mail editor@insurancenewsnet.com or call 717.441.9357, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to www.innmediakit.com or call 717.441.9357, Ext. 125, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 275 Grandview Ave., Suite 100, Camp Hill, PA 17011. Please allow four weeks for completion of changes. 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. Address Corrections: Working remotely? Working Remote? Get your magazine delivered to your doorstep! Update your address here: subscribe@insurancenewsnet.com.


InsuranceNewsNet Magazine » January 2021

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IMG22669 | INN 01.2021


The Giving Go-Round


arely has a year dawned with such trepidation and hope. The end to the COVID-19 crisis is within view. Or more accurately, we can see the beginning of the end to this crisis. A few effective vaccines are coming on board, and we are applying some of the lessons we learned from nearly a year’s experience with the virus in our public and private lives. That does not mean it is any easier. This holiday season was a heartbreaker for many of us who were not able to see loved ones, particularly difficult for those who lost someone close to them last year. On top of it all, the reaction to the virus has deepened a division in this country unlike most of us have seen in our lives. In the cold, dark, lonely winter, we feel these aches a little bit deeper, making it easy to steep in this melancholy. There is a way we can help ourselves and others through these difficult days. This can:

to know what would suit them. We found the thing and imagined the person having, using or attending whatever it is. Then we saw the person receive it — and we have that moment forever. How often have we spent money on ourselves to purchase just the right gift, only to have the thing sink into the clutter? Sure, spending on experiences is better, but even more satisfying is sharing that experience. In this Giving Forward issue of the magazine, we are showcasing the many ways people help others, particularly those suffering in relation to COVID-19. Managing Editor Susan Rupe rounded up several stories of creative giving in this month’s magazine. Also in this month’s interview with Publisher Paul Feldman, Greg Gagne revealed how one person’s kind generosity propelled him into a successful financial and insurance career. Most of us have been on both sides of this.

» Lower blood pressure.


» Raise self-esteem. » Diminish depression. » Reduce stress levels. » Lengthen life. » Increase happiness and satisfaction. What does all this? Generosity, according to research compiled by the Cleveland Clinic. “I can recall giving my daughter a dollar to buy a gift for us during the holidays in elementary school,” said clinic psychologist Scott Bea. “When she returned home, she couldn’t wait to give us the gift she picked out. In fact, she insisted we open it immediately.”


We have all known this feeling, when we selected something we knew would be the perfect gift for someone. It is almost as if we got more out of it than the receiver did. We thought about the person long enough 4

Most of us needed a hand when we were low, and sometimes one showed up. Usually we had to put ourselves out there and say what we needed to get it. I can think of a few people who did that for me, still unaware of what help they were to me. That is the thing about kindness and generosity — we have to do it without ever knowing the effect, because it ripples beyond our scope. Sometimes we are lucky enough to see the effect, as it did for me when I was visiting a former colleague in Los Angeles who I hadn’t seen in decades. Sarah and I sat on a bench on a typically beautiful day in Pasadena, reminiscing about when we knew one another in cloudy, chilly Central New York. After catching up on our lives since, she turned to me and surprised me with an observation. “You are the reason I am a writer.” I was sure Sarah was just being nice, but she was insistent. I was the features editor of the small city newspaper where she worked as a copy editor. She had not planned to work at a newspaper, having focused on the arts in college. Sarah had a deep knowledge of classical

InsuranceNewsNet Magazine » January 2021

music and popular culture, along with a sharp, challenging wit that she loved to wield. I needed more writers to cover arts events, so I suggested that she cover one on occasion. After some hesitancy, she did. Her copy was a bit rough at first, but I and other editors worked with her. I had left the paper soon after and did not realize that she became a reporter and columnist. I just saw an opportunity that was worth an investment. We needed more women and younger people writing for the paper, and it seemed like a no-brainer that she should be writing. I had not remembered doing that until she had reminded me. Then I recalled making the observation that she had raw talent, specialized knowledge and a unique voice. I also remembered working with helping her figure out how to organize a typical review. It took time and patience, and although I didn’t have a lot of either, I thought it was worth doing. Sarah revealed this to me at a moment when I could have used it most. My father had recently died, and I had cleared out his room in an assisted living facility near where Sarah lived. I did not even recognize that I was in one of those “what’s it all for?” moments. It’s for everybody else, all the generations our actions radiate through. It’s ultimately for ourselves because we are wired to help others. Many of us are in a dark place right now. But even if you are not, somebody close to you is and you are not aware of it. Assume it is everybody who can use your help, because we all need a hand, even when we might not realize it ourselves. Steven A. Morelli Editor-in-Chief

Win the race to the middle — or fall behind By Jared Carlson, Vice President of Individual Sales and Ventures


ou know you need to grow past your current business model to succeed long term, and you’re under pressure to cut costs by streamlining your back office and using more automation. On top of that, the market is flooded with new tech disruptors focused solely on customer acquisition. The tipping point has arrived. You need an insurance carrier that can give you the tools to compete on a new level—look no further than Assurity’s complete API portfolio. Consumer preferences have shifted, and now online service is an expectation instead of a bonus. The surprising upside to this shift: By going online, you can look downmarket to a wide-open sea of middle market sales that make economic sense for the first time in the history of insurance.

By going online, you can look downmarket to a wide-open sea of middle market sales that make economic sense for the first time in the history of insurance. Customize your solution We put you in the driver’s seat with control and customization over the look, feel and flow of our APIs for life and health products. Customize your user experience to maximize conversions, with options for both consumer-complete and agent-led sales. You can integrate powerful features like batch qualification, allowing you to prequalify entire lists of people— and that’s only scratching the surface of our APIs’ advanced capabilities.

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INFRONT Credit: Biden Transition via CNP

President-elect Joe Biden’s appointments and policy positions show his policies will be more consumer-oriented.

Biden Transition Expected To Hit DOL Rule, Enforcement Direction President-elect Joe Biden is busy filling out a team and putting together plans for his administration. Here are the key economic and regulatory players and the potential influence they will have on insurance and financial services.


By John Hilton

resident-elect Joe Biden is painted by many as a centrist Democrat with wide appeal — but make no mistake, his administration is likely to represent a 180-degree turn from the economic policies of the Trump administration. Whether it be taxes, regulation or legislative priorities, Biden is going to reverse much of President Donald Trump’s agenda from the past four years. Some moves will come quickly, via executive order, while others will take shape through the bureaucracy or allies in Congress. Most of the Biden agenda will be initiated with key administration appointments. In particular, four departments/ agencies stand to reshape rules governing financial services. 6

The Federal Reserve

As this issue went to press, the Senate was expected to vote to confirm Christopher Waller to fill one of two open seats on the Federal Reserve Board of Governors. Director of research at the Federal Reserve Bank of St. Louis, Waller is largely uncontroversial and is likely to support keeping interest rates low. Democrats succeeded in blocking Judy Shelton, who Waller Trump nominated along with Waller. Shelton’s criticism of the Fed and past advocacy for a return to the gold standard made her too controversial even for some Republicans. But seating Waller will complicate Biden’s regulatory agenda. In interest rate decisions, the Fed board shares votes with the presidents of regional banks that are part of the Open Market Committee. But only governors vote on the execution of banking rules, merger approvals, or supervisory decisions. So while Biden can probably install Democrats at the head of other financial regulatory agencies, the Fed might veto

InsuranceNewsNet Magazine » January 2021

some issues, such as another reform of the Volcker Act, which restricts banks to certain brokerage activities. Peeking ahead, Jerome Powell’s tenure as Fed president and Richard Clarida’s term of vice president come to an end in 2022.

Biden’s likely impact: 5/10

The Department of Labor

The DOL is fertile ground for financial services’ rule-making. Specifically, two rules have the attention of the industry: an investment advice rule and a rule on ESG investing. Both were finalized this fall, but timing is everything. The investment advice rule replaces the universally hated Obama-era fiduciary rule. But the Trump administration waited too long to start the rule-making

BIDEN TRANSITION EXPECTED TO HIT DOL RULE, ENFORCEMENT DIRECTION INFRONT process. Its investment advice rule was published Nov. 25, or within the 60-day “midnight regulation” period that accompanies the end of an administration. The Biden team will be able to withdraw the rule upon taking power — and is expected to do just that. The Trump replacement has two main parts: a new exemption allowing advisors to provide “conflicted” advice for commissions; and a reinstatement of the “five-part test” from 1975 to determine what constitutes investment advice. Among other things, the guidance reverses the long-standing DOL definition of “regular basis” in the context of providing financial advice, legal analysts have said. In striving to make rules consistent for brokers, agents and advisors, the DOL might have created other problems with just who is considered a fiduciary, analysts added. As of press time, Biden had not revealed a nominee for labor secretary, but his platform is unambiguous about reversing Trump regulations and committing to fiduciary-like rules. His eventual DOL nominee can be expected to support the same. Filling undersecretary slots will have a big impact on rule details. For the investment advice rule, the assistant secretary for the Employee Benefits Security Administration will be a key appointment. On Oct. 30, the DOL published a rule regulating the use of environmental, social and governance funds in retirement plan investing choices. This rule is of high concern to financial services and was completed well ahead of the “midnight regulation” period. The Biden DOL will have to initiate a lengthy rule-making process to replace it. The DOL rule states that “when making decisions on investments and investment courses of action, plan fiduciaries must be focused solely on the plan’s financial returns, and the interests of plan participants and beneficiaries in their benefits must be paramount.” The department maintains that ESG investing runs afoul of fiduciary duty because it goes beyond the financial and seeks out “nonpecuniary” benefits. Industry groups are leery of the Trump ESG rule. While the Insured Retirement Institute praised aspects of it, the group also called on the administration to

withdraw it over the summer. “We remain concerned that the final rule could make the investment selection process for plan sponsors much more complicated and burdensome than is necessary,” said Jason Berkowitz, IRI chief legal and regulatory affairs officer after the rule was finalized.

Biden’s likely impact: 8/10

Treasury Department

Janet Yellen, Biden’s nominee for treasury secretary, is a familiar face to financial services, having served as chair of the Federal Reserve from 2014 to 2018. In that role, she placed a greater emphasis than previous Fed chairs on maximizing employYellen ment and less focus on price inflation. At a time of extreme partisan bickering, Yellen won praise from both sides of the aisle and appears headed for a quick confirmation in the Senate. Treasury Secretary Steven Mnuchin will be leaving plenty for her to do. Mnuchin announced in November that over the objections of the Fed that he would not grant extensions for five lending programs being operated jointly by the Fed and the Treasury Department that are scheduled to expire on Dec. 31, including backstops for corporate and municipal debt and the purchase of loans for small businesses and nonprofits. Yellen, if confirmed by the Senate, would be the first woman to serve as treasury secretary, after breaking ground as the first woman to chair the Fed.

Biden’s likely impact: 7/10

Securities and Exchange Commission

Chairman Jay Clayton made his departure from the SEC official in November. It is a tradition for the SEC chair to resign upon the change of administration. The opening gives Biden a variety of directions to go with his nominee. Progressives favor former SEC Commissioner Kara Stein, while moderates would like former SEC Commissioner Robert Jackson. Among others under consideration, former U.S. Attorney Preet Bharara would likely ramp up enforcement, while Chris Brummer, Georgetown University law professor, would be the first African American SEC chair. Regardless of who Biden nominates, the agency’s Regulation Best Interest is probably not going anywhere. The SEC rule took effect June 30 and, so far, with little fanfare or disruption to the brokerage industry. Reg BI requires the following factors be considered in developing a recommendation for a retail customer: the customer’s investment profile, potential risks and rewards, and costs. It also includes a new “customer relationship summary” disclosure between broker and customer. It is less likely that Biden would want an SEC chair from a hardline regulatory or prosecutorial background, said Tom O. Gorman, partner at the Dorsey & Whitney law firm. “I would think that you would want to find someone who is much more familiar with regulatory agencies,” he explained. “Now, that being said, it doesn’t mean that you’re not going to change philosophy.”

Biden’s likely impact: 5/10 InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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January 2021 » InsuranceNewsNet Magazine





BIG VISION Greg Gagne tells how others helped him think bigger, and how he is giving it forward.


InsuranceNewsNet Magazine » January 2021


ow do you climb to the Top of the Table from a small town in New Hampshire? By thinking a whole lot bigger while still remaining a small operation. Greg Gagne was struggling, as many do early in their careers. Sheer determination and hard work got him enough business to get by in the pre-internet days of the early 1990s. But that could only get him so far in Exeter, a town whose population is just a little more than 14,000. Gagne nevertheless developed into a top-level producer, starting his Affinity Investment Group, and then racking up more than 20 years of Million Dollar Round Table membership, with four Court of the Table and 12 Top of the Table designations. He was elected the secretary of MDRT’s board in 2020. Gagne credits being in the company of top agents and advisors for his success. He now volunteers extensively for MDRT and other organizations to give it forward to people getting started. With the help and inspiration of mentors, he expanded his vision and grew from a scrappy seller into a business owner. He kept his practice relatively small, with three advisors and three office personnel. He was able to scale his practice through a team-based approach. In his office, no individual person has a case; everybody has that case. In this interview with Publisher Paul Feldman, Gagne shows how his incremental work led to big leaps in his business. FELDMAN: How did you get started in the industry? GAGNE: I started when I was a kid. I was working in a corporate position after graduating from college and was promised the sun, the moon and the earth — and it never materialized. That really left a sour taste in my mouth. So I began exploring what other options I might have to strike out on my own, to be an entrepreneur, but maybe not right away. All paths seemed to lead me toward the insurance and financial services industry. It began a phenomenal career where

SMALL TOWN, BIG VISION INTERVIEW I could be trained how to be a business owner, could be compensated in a training allowance program while getting rolling into the industry, and set in motion 28 years of being in this fantastic industry. I’ll tell you that the first five, six years of being in this industry were probably the worst ever. FELDMAN: It usually is tough in the beginning. What were those years like for you? GAGNE: Just rejection after rejection, peaks and valleys, wondering if I’ll make enough money to pay my basic bills to exist. Then, all of a sudden, things started to click and it became one of the highest paying professions. It’s just been a fantastic journey. So, for anybody who’s getting

It was in one of those failures where I was almost at the end of my rope when he decided to take me to a meeting of one of his clients. He wrote all kinds of business on these business owners. At the conclusion of that meeting, he put me on for half of the case, something I did not expect. It completely shocked me, but gave me the staying power to make it a few more months. That was the first of a couple of major hurdles that I overcame, thanks to having somebody who took the time to reach down and bring somebody else up. I’ve spent a lot of my time the rest of my career trying to pay it forward as much as I can because of what that gentleman did. His name is Bob Garneau. He’s been an MDRT member for I have no idea how many years, but his license plate is MDRT. I talk to him almost daily.

I’ve spent a lot of my time the rest of my career trying to pay it forward as much as I can.” started in this industry, you got to do what you got to do to get rolling. You have to persevere. You can quit all you want, but don’t actually quit. Never give up — forge ahead, keep moving forward. It’s been a blessing both for me personally, as well as for my entire family. It’s allowed us all kinds of flexibility and opportunity. And it’s been so rewarding to serve the clients that I’m lucky enough to serve. FELDMAN: What was it that broke through for you? GAGNE: Well, I got broken a few times first. More than a few, to be candid, but really there were a couple of turning points. One was with one of my mentors, who was a perennial MDRT member, who got me involved with NAIFA, and wanted to get me involved in MDRT. At the time, I was having what I call under-the-table production. I couldn’t hit the bar high enough to be able to get a seat at the table.

FELDMAN: You came into the business through the career channel. How did you go independent? GAGNE: I came in as a career agent with a mutual company, and it merged with another mutual company. That went from 1992 until 1996. One of the other major changes was in 1996. I was really struggling with the peaks and valleys of how our industry can be in our cash flows. So I knew that what I needed for me was some form of a recurring revenue situation, which launched me toward what I trained in college for, which is finance and economics. For me, it was investment management. I actually formed my own registered investment advisory firm that went live in 1998. It was the next year that I qualified for my first seat at the table. I made it to New Orleans in 1999 for

January 2021 » InsuranceNewsNet Magazine


INTERVIEW SMALL TOWN, BIG VISION my first ever meeting, and anybody who’s an MDRT member always remembers the very first meeting. It was just a phenomenal turning point to rub elbows with people that I had only read about. I learned so much, and short-circuited the next several steps of my career by being able to talk to these people who have already made mistakes that I wouldn’t have to repeat, because they were willing to share with me. FELDMAN: What are some of the biggest lessons you got from that first meeting that stick out today? GAGNE: Community, we’re all in it together. That even when we think we’ve hit the pinnacle of success by earning a

years to have a combination with individuals who are maybe five to 10 years from the landing strip of retirement. Then once they’ve done that, and executed that transition, they’d like to stay there. That’s where we serve best — in distribution strategies. It’s risk management, asset protection, portfolio design, cash flow management. One of the things that we learned through experience, especially for those who are coming in for the landing over their retirement, is so often we run into prospective clients who set it and forget it. That means when they went into the workforce, they may have signed up for the 401(k) and they put it on target date funds, so they don’t have to think about what’s going on.

a high capacity and remain very focused. FELDMAN: Did you learn to focus from MDRT? GAGNE: There’s a natural progression that occurs in MDRT. What happens in that process is you go from somebody who’s good at closing cases, able to write business, to somebody who’s starting to specialize. You’re finding your way in what you enjoy doing. The types of people you like to work with, the types of business planning that you’d like to be doing. Usually associated with that, but not always, the revenue seems to follow along with that as well. Once you become an MDRT member, you aim for Court of the Table, which is three times that of a regular Round Table membership. The next jump is the Top of the Table. Once you become a Top of the Table member, not only are you a specialist, but you typically have flipped the switch and become a business owner. You’re not just an advisor who happens to own a financial services practice. You own a financial services practice, and maybe now you just so happen to be an advisor. FELDMAN: How have you found that transition between being face-to-face, and going remote and virtual?

Greg Gagne has shared his expertise with his fellow MDRT members on the main platform during the group’s annual convention.

seat at the table, when you start looking around the room, you realize that you have so much further you could stretch. FELDMAN: What is the focus in your practice? Do you have a specific clientele that you serve primarily? GAGNE: We specialize in working with people who are retired. We’ve been changing that a bit over the last several 10

Then with the airplane analogy, they get up to 30,000 feet, and they’re just cruising through their life. As long as there’s no turbulence or anything, the plane can fly itself. But when it’s time to put the wheels down on the ground, you better have a pilot and somebody who can make sure that you can land successfully and safely. Making it more or less our niche has really been a differentiator to help us serve at

InsuranceNewsNet Magazine » January 2021

GAGNE: Remoting has been very efficient. There’s no commute time. We have five different offices that we usually would use. We basically stopped going to all of those. It was very efficient, very effective but just insane. We like to shake hands. A lot of our clients, believe it or not, we hug each other and stuff. And that’s all gone out the window for now. I know we’re all desperately waiting for that to come back. And hopefully with the news that we’ve been receiving in the last couple of weeks between Pfizer and Moderna, that’s going to be a reality that will exist maybe by the end of second quarter 2021.

SMALL TOWN, BIG VISION INTERVIEW FELDMAN: Do you have some tips for presenting virtually that you’ve found effective? GAGNE: There are a few things. Get yourself a decent headset so that you can be heard and listen. Keep these meetings to an hour or less, so people don’t suffer from Zoom fatigue. When possible, screen share, to show pictures of what you’re trying to explain, versus just talking. One of the things that we’ve made a decision to do, which is costly but it’s worth it, is in a lot of our calls we will have more than one advisor on the Zoom. It just

yourself and not do what you said you’re going to do, it really leads to “should have, would have, could have,” and ultimately regret. Going with a mind’s eye of failure is not an option. You have to find your way. If you’re going to fail, fail fast. When you make a mistake, it’s a mistake and you learn from it. But if you do it a second time, it’s a choice. We see people do that over and over again. We study and learn — that’s another core habit. To serve our clients best, we’ve got to be educated. That’s reading periodicals like yours. That’s being active

GAGNE: Prospecting has changed for me over the years. When I first began, prospecting was cutting the marriage announcements out of the newspaper, cutting the birth announcement out of the newspaper. Going to condominium complexes, and taking down all the names off the mailboxes, and then going to the local mall in my community, and hopping on the directory assistance line, and getting phone numbers to all the last names. Then going back to my office from six o’clock to eight o’clock at night and making 250 dials to have a zillion people tell me no, maybe one to three people tell me they’ll meet with me, and then not show up for the meeting. Prospecting now is quite different. Prior to the pandemic, we would do a lot of public speaking engagements, normally about 40 of them a year. This year, they were all wiped out. We could hardly do any of them once this all started. We have executed a few socially distanced ones, better than none but not that great. I took them to Zoom. I took them to Go to Webinar. What I decided to do for this whole year was not worry so much about bringing in business as I was worried about planting seeds for future business. Roll up my sleeves, serve my clients that I have to the best of our capacity. Make sure that they know that we are there for them right now during this crazy time. Reach out to those that aren’t working with us yet and just let them know when it’s time for them we’ll be ready for them. That approach has been bountiful. Those seeds have germinated. What’s coming at us now from all the work that we did from March until today is bearing its fruit. It’s only going to catapult us into next year. Put the majority of your emphasis for your growth strategy on the clients that you serve, and serving them well, and letting them know that you’re prepared for growth. Then they will start referring people to you without you having to ask for referrals. We get inbound referrals every single week. Part of that process is making sure that we have a clearly defined communication calendar, touch points with our clients throughout the course of the year for no

If you break promises to yourself and not do what you said you’re going to do, it really leads to ‘should have, would have, could have,’ and ultimately regret.” lends to a little better dynamic than just having a one-off talking head making a presentation, for an example. We found that to be really helpful. Green screens, really helpful. I have a whole bunch of different ones. Right now, I just have my MDRT one, but I have, depending on the situation, different green screens for different events. FELDMAN: What are some of the foundations that you’ve found over the years that have been good for your success? GAGNE: There are some basic core values. One thing is to do what you say you’re going to do. It is really important. This sounds so easy, but it’s easy to break a promise to yourself, a promise to family, a promise to your staff, a promise to clients. I’ve learned over the years that if you do that, if you break promises to

in things like Million Dollar Round Table, and making sure that we listen to people who might just be smarter than ourselves, and being open to what it is they have to say, or at least so that you could draw your own conclusion. Never stop prospecting ever. Don’t rest on your laurels, it’s OK to climb the mountain and then camp out for a minute. But it’s only to take in the view. Don’t get complacent when you get to a level of success, because all of a sudden, things start snowballing backwards on you. Got to keep moving forward at all times. If we’re not growing, we’re dying. This is a profession of continued and constant growth. It’s not one where you can get to certain levels and think you’ve arrived. FELDMAN: What have you found as one of your best tools for prospecting?

January 2021 » InsuranceNewsNet Magazine


INTERVIEW SMALL TOWN, BIG VISION reason at all. At least they don’t think it is but there is. There’s always a reason behind it. It is so we will be top of mind, so that when something comes up, and they run into somebody who needs some help, they’ll ask, “Have you contacted Greg Gagne of Affinity Investment Group? That’s what I would recommend you do.” And that happens daily now.

FELDMAN: What are some strategies you have that you find effective in selling life insurance? GAGNE: A lot of times, we are positioning it in an estate plan, where Mom and Dad want to have equality for all of their beneficiaries. So, let’s say they want to leave each of their three children a

Put the majority of your emphasis for your growth strategy on the clients that you serve, and serving them well, and letting them know that you’re prepared for growth.” FELDMAN: One of the things that was a big turning point for you in your career was adding investment advice. What would you say to an investment advisor about adding insurance to their practice, or vice versa? GAGNE: There’s a symbiotic relationship between the two. There really needs to be. If we’re going to be holistic in the approach and the clients that we serve, we really need to be looking at several different core competencies there. Risk protection just has to be one of them. Portfolio design, portfolio management is another one, tax is something to be thinking about. Then cash flow strategies for retirement. How do you spend your money without running out of money? And how do you spend your money, the most cost-effective tax-efficient way possible during your retirement? At the end of the day, how do we help our clients have a less worry-full retirement lifestyle? Insurance is a leveraging tool. 12

million dollars, but they don’t have a million dollars to leave all three of the children. Insurance can be used and leveraged to make that a reality. Life insurance is really important now as a result of the SECURE Act. If people aren’t looking at life insurance as part of their strategy, they probably need to dust it off and pull those things out again. Stretch IRAs are now down to a 10-year situation. That’s a heavily taxed asset waiting to transfer. For a lot of the clients that we serve, one of the largest assets they have in their quiver is their retirement account, because they were trained to defer and postpone and delay. Traditionally, we used to do a ton of conversions to Roth IRAs. And that’s still very viable. We still do it today. But I will tell you that with some of our higher net worth clients, and those who have a higher income stream, and they’re not in the lower end of the tax brackets, life insurance is the perfect vehicle as a means to get assets out of the estate non-tax and the ability for the trustees to distribute

InsuranceNewsNet Magazine » January 2021

those funds over whatever period of time the family has chosen, versus a 10-year window. The other one is long-term care insurance. A lot of our clients, we call them middle-market millionaires, have enough to be dangerous but not enough to be all set. One pothole on the road of life and the system is coming after all their money. They’re going to lose it to a longterm care crisis. Really prudent to put it into long-term care insurance as a defensive mechanism. FELDMAN: You mentioned that you have a communication calendar. I think that all businesses and agents should have a communication or marketing calendar. What does yours look like? GAGNE: It’s about 21 touches per year. We do quarterly reports, we typically would do quarterly videos. We do a newsletter that goes out in between each quarterly report; or every other month there’s a newsletter going out. We do birthday emails. From time to time, if something’s happening that we think is warranting of outreach, we’ll do what we call an action alert. When we do those, the clients know that this is not just a typical thing that Gagne is sending over, this is something we actually need to spend some time and look at what’s going on here. We’re asking them to take some action, whether it’s a portfolio change, a strategy change, a tax law change. We might be seeing some of those coming in the next six, seven months. The other thing we like to do is think outside the box when it comes to our clients. Like, I got a referral the other day from a client to a prospective new client. He ended his email with, “So I suppose this probably earns me like a lollipop.” He thought he was just cracking a joke. Well, what’s on its way to his house right now is a whole big bag of lollipops with a thankyou card. Not a huge investment, but it’s definitely going to land when it hits his house and he opens it up and there are all these Tootsie Pops rolling out. So those little touches make a huge difference, just shows people that we’re people too.


Why The Dow Hit A Record High


Dow Milestones Dow hit 10,000 – March 1999

The Dow Jones Industrial Average busted through Dow hit 20,000 – January 2017 Dow hit 30,000 – November 2020 another milestone, topping 30,000. It was the first time the Dow rallied to the next multiple of 10,000 since January 2017. So, what was behind the historic high? The trip to 30,000 got a big boost from the Federal Reserve, which cut short-term interest rates almost back to zero and took other measures to stabilize financial markets. The Dow also had some help from Congress, which came through with trillions of dollars of financial aid for the economy. And the economy is limping forward since the pandemic pushed it off a cliff in the spring. Unemployment benefit claims dropped from 6.9 million in March to 742,000 in November. Company profits didn’t take as deep a drop as initially feared. And the possibility that a COVID-19 vaccine could be distributed soon has the market singing an optimistic tune. Taking a longer-term view, profits strengthened for most Dow companies since it first rose above the 20,000 threshold at the start of 2017. At American Express, for example, analysts expect earnings per share to bounce back from the pandemic to $6.69 this year, versus $6.07 in recurring earnings in 2016.



Wells Fargo’s former chief executive and the former head of Wells Fargo’s Community Bank defrauded investors by using a metric that was inflated by accounts that were opened for consumers who did not ask for or want them. That’s according to the Securities and Exchange Commission, which filed charges against them. The SEC’s filings include settled charges against former CEO and Chairman John G. Stumpf, who agreed to pay a $2.5 million penalty, and a litigated action alleging Community Bank chief Carrie L. Tolstedt committed fraud. The SEC previously filed settled charges against Wells Fargo for engaging in the misconduct. According to the SEC’s complaint against Tolstedt, from mid-2014 through mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” DID YOU



as a means of measuring Wells Fargo’s financial success, despite the fact that this metric was inflated by accounts and services that were unused, unneeded or unauthorized. The SEC’s order against Stumpf finds that in 2015 and 2016 he signed and certified statements filed with the Commission, which he should have known were misleading, regarding both Wells Fargo’s Community Bank cross-sell strategy and its reported metric.


The Supreme Court isn’t expected to rule until June on a case that could decide whether Obamacare is unconstitutional without the individual mandate penalty. The court heard arguments on the case, in which “severability” — whether the law can stand without the mandate — was the key word. Meanwhile, two key U.S. Supreme Court justices indicated they are inclined to keep most of the Affordable Care Act intact even if the court strikes

This winter will be grim, and we believe the economy will contract again in 1Q. — JPMorgan, in its 2021 outlook

down the provision requiring people to have insurance. Chief Justice John Roberts and Justice Brett Kavanaugh suggested they won’t vote to strike down the entire health care law if the individual mandate penalty section is ruled unconstitutional.


A COVID-19 vaccine is being fast-tracked, but an economist warned that the vaccine won’t be an instant stimulus to the pandemic-wrecked economy. Carl Tannenbaum, chief economist at Northern Trust, said the economy needs greater fiscal support as the recovery sputters along. Tannenbaum told CNBC that those who remain unemployed “are seeing a longer track back to employment, so they will continue to need a certain amount of support.” In addition, he said, state and local government budgets “are in terrible disarray at the moment for loss of revenue, they’re laying people off, cutting services and that’s bad for economic activity.” The U.S. “can’t depend on a vaccine to solve all our problems,” Tannenbaum said. He explained that even after a vaccine is approved, there may not be enough doses available through 2021 to immunize everyone who needs it.

The average Gen Xer has $32,878 in non-mortgage debt, the highest rate of any age group. Source: LIMRA

Source: National Association for Business Economics

Source: Experian

January 2021 » InsuranceNewsNet Magazine


the Fıeld

A Visit With Agents of Change

How The Student Becomes The Advisor Gregory Dexter is advising today’s clients while drawing on his grandfather’s wisdom. BY SUSAN RUPE 14

InsuranceNewsNet Magazine » January 2021



regory Dexter was barely out of school when he faced his teachers again. This time, he wasn’t their student. He was their advisor. Dexter, age 24, is in his fourth year with New York Life, working as a financial advisor with Eagle Strategies, a registered investment advisor. He has been licensed since his junior year at St. Joseph University in Philadelphia, and he qualified for Million Dollar Round Table in 2020. Dexter is the third generation and the fourth member of his family to represent New York Life. His grandfather, Gregory Genovese, began his career in Long Island, N.Y., in 1965 and is now retired. Dexter’s uncle, also named Gregory Genovese, is a New York Life agent in Long Island, and another uncle, Mike Genovese, worked for New York Life and is retired. Despite his young age, Dexter has been able to gain the trust of clients who have known him ever since he was an aspiring percussionist attending a performing arts high school in a small town in northern Delaware. “I had a few clients while I was in college, but my first clients out of college were former teachers of mine,” he said. “I didn’t prospect them. But my mom worked at my former school. And it’s a place where everybody knows everybody. And things would come up in conversation — someone’s worried about the market, someone’s not happy with their financial professional. And my mom would say, ‘Maybe you should sit down with Gregory and have a conversation.’ “Here I was, a 22-year-old guy sitting down with my former teachers, asking them what are their incomes, what are their debts, what are their assets. So that was kind of an interesting experience because I was now in this environment where I looked up to them as mentors and now they’re looking to me for financial advice. They shared their wisdom with me, and now I’m sharing mine with them. But I think it gets to the heart of why I do what I do is because I know I’m going to make a difference in that person’s life.” Dexter originally had planned to be a management consultant. He had an interest in finance, he enjoyed problem-solving and he liked to help people. By the time his junior year rolled around, he decided to get serious about zeroing in on a career, and he approached New York Life for a job as an agent. He quickly became licensed and was on his way. “It was relatively easy for me to get in because of my family,” he said. “But it was up to me to say, OK, what am I going to make with this? Do I like it? Is it a good fit for me?” Despite his early start in the business, Dexter said he still questioned whether it was what he wanted to do after graduation. “I wasn’t thinking about the traditional concerns when you’re in the business, like where’s the client going to come from? How am I going to make a living? How am I going to do all these things? For me, the question was, is this something I want to do when I graduate?” It didn’t take long for Dexter to realize that the industry provided him with an opportunity to help others while pursuing his interest in finance. “To me, this was the perfect fit, because I really am directly

Gregory Dexter (right) began his insurance career while still a student at St. Joseph’s University. He said his grandfather, Gregory Genovese, has been a source of wisdom and inspiration for him.

helping people, whether it’s protection with life insurance or helping them handle their retirement accounts. There are so many other programs and strategies and ideas that can help people and make a difference in their lives.” Dexter said that after he graduated, “I hit the ground running and never looked back.” A turning point in his career, he said, occurred when he was assigned to service a client, husband and wife, who did not have an agent associated with them. After meeting with them and reviewing their coverage, Dexter said, the wife revealed a serious medical issue. On top of that, her term life insurance was about to expire. Dexter was able to convert her term coverage January 2021 » InsuranceNewsNet Magazine


the Fıeld

A Visit With Agents of Change

can I get in front of to show what I do? How many people can I assist with something so basic as life insurance or something as complex as a financial plan?” Even though Dexter has been in the business for only a short time, he helps mentor the newer members of his general office. “A lot of times, they try and put the cart before the horse — to try to close the deal before they really even have an idea of what they should propose. I tell them you have to be able to understand what is going on before you can solve the problem.” He shares with newer Gregory Dexter was honored as New York agents the importance of Life’s Rookie of the Year. looking at the agent relationship as more than transactional. into a permanent policy, which he said, “There are some clients who think “took a huge weight off her shoulders.” buying life insurance is like buying a car. “That was the first time where I saw re- But you need to be relationship-oriented ally the benefit of what we do come into instead of looking at life insurance as a play not from delivering a death benefit transaction where you never see the clibut from helping give someone peace of ent again after the sale. mind while they are alive.” “I tell my clients that you’re going to Dexter said he is inspired to help as hear from me even more now that you’re many people as he can. a client. I make them understand that “That’s my challenge. How many peo- this is a trusting relationship that we’re ple did I help today? How many people going to have. And in order for me to do the best job I can for you and your family, I’m going to need to know some of the most intimate financial details that you’ve probably never even shared with anybody. Maybe you probably haven’t even shared it with your spouse. But in order for us to have the best possible solution, we’re going to have to talk about this stuff.” The COVID-19 pandemic forced many advisors to adapt to a remote way of Music has always been a part of doing business, but Dexter Gregory Dexter’s life. While a worked remotely long bestudent at St. Joseph’s, he played fore it was the norm. He drums in a band that performed at the university’s basketball games. works from his home in the Philadelphia suburb of West 16

InsuranceNewsNet Magazine » January 2021

Chester, Pa., going into the office occasionally but mostly traveling to where his clients and prospects are. His clients represent a wide range of occupations — teachers, firefighters, business owners, tradespeople, retirees and pre-retirees. “I’m a firm believer that everybody out there — there’s at least one thing I can do for them. It’s just a matter of getting them to sit down with me.” Dexter frequently bounces ideas off his grandfather, who says that many of the same techniques used back when he started in the business are still relevant today. “I tell Gregory that the basics haven’t changed,” Gregory Genovese said. “I tell him how important referrals are. And I tell him you have to be able to accept the nos and move on. I also talked to him about setting a particular goal and then rewarding yourself when you meet that goal.” Genovese said he didn’t introduce his grandson to the business, “but he made it his own. He is conscientious and honest, and he will go far.” Outside of work, Dexter’s love for music is still part of his life. He played drums in a band while at St. Joseph, performing during basketball games. He has played in a few jazz bands and is trying to find enough musicians to form a jazz big band. He is active in performing arts organizations and also serves on some nonprofit boards in his community. “I don’t serve on boards to get business,” he said. “But I do it because I genuinely care about the work I’m doing. And then business just happens to flow from there.” Creating happiness and helping people are at the core of everything Dexter does in and out of the office. “It’s all about what did I do to help somebody today — whether they enjoyed the music that I provided for them or whether it was the financial advice I gave.” Susan Rupe is managing editor for Insurance NewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.


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January 2021 » InsuranceNewsNet Magazine



How COVID-19 has reshaped fundraising and refocused philanthropy BY SUSAN RUPE 18

InsuranceNewsNet Magazine » January 2021



etchup with a Champagne chaser. Twizzlers red licorice candies and Reese’s peanut butter cups dipped in ketchup. Ketchup stirred into coffee. A ketchup and Scotch whisky cocktail. Ketchup blended into a protein shake. Broccoli with a side of ketchup. Ketchup drizzled over blueberries. What’s up with all this ketchup in these retch-inducing combinations? It’s about fighting a problem that affects one in four children in the U.S. — hunger. Jamie Hopkins, managing director of Carson Coaching and a retirement researcher, was looking for a way to raise funds for the growing number of children who face food insecurity in the midst of the COVID-19 pandemic. He saw the Ketchup Package Challenge on social media and gave it a whirl, while urging his Twitter followers to do the same. The result? A string of stomach-turning posts on Twitter and between $13,000 and $14,000 raised to feed hungry kids. The Ketchup Package Challenge is a fundraising and awareness campaign of No Kid Hungry, a nonprofit organization that provides grants to schools and community groups that feed children in need. With COVID-19 closing schools and many parents out of work, the need to provide meals to children is especially urgent. No Kid Hungry estimated that one in four children in the U.S. was impacted by hunger in 2020 — an increase over one in five children in 2019. No Kid Hungry challenged the public to “spoon, slurp, guzzle or struggle your way through 10 ketchup packets.” Participants were asked to film themselves attempting to eat the 10 ketchup packets, share the video on social media, encourage friends to donate and tag three people to complete the challenge. “I have three young kids, and if I think about them being unable to eat because we had no food for them, it breaks my heart,” Hopkins said of his inspiration for raising funds for No Kid Hungry. “Especially in 2020, I was focused on the charitable side and giving back more than ever.” Hopkins found support for his ketchup challenge among a group of financial professionals who call themselves #fintwit on Twitter. Earlier in 2020, Hopkins and

another #fintwit member, Tyrone Ross, CEO of Onramp Invest, did a similar social media challenge and raised $6,000 for No Kid Hungry in one week. The ketchup challenge played out over several weeks in the fall among a larger group of Twitter followers, and raised between $13,000 and $14,000. “It’s fun to see people come together and engage in a sense of community and then donate to a good cause,” Hopkins said. “And I think some of the power of social media on raising funds for charities is that it allows people to partake in that community feeling. If you simply post on social media that you want people to donate to a charity, there’s no way you’re going to raise that much money. But engaging people in a more fun way, especially in 2020, really seemed to work.”

The Industry Steps Up

The financial and humanitarian crisis brought about by COVID19 has inspired many individuals to look at unusual or meaningful ways to give back. The insurance industry also has stepped

up its charitable giving efforts during the pandemic. The Insurance Industry Charitable Foundation has served as the philanthropic arm of the insurance industry since 1994. The foundation has supported numerous community organizations across the U.S. since its inception, but 2020 saw its member companies and individuals focus their giving efforts on the IICF Children’s Relief Fund. The fund was created in response to the pandemic and has provided money to organizations focused on helping children affected by hunger, educational disruption and family homelessness as a result of COVID-19. IICF established the Children’s Relief Fund in April and raised $500,000 for the cause in the first three weeks after it was launched. A total of 40 companies and more than 1,200 individuals have raised $1.3 million to support the efforts of the fund in the U.S., said William Ross, IICF’s CEO. So far, $280 million has been donated by U.S. insurers and their charitable foundations, and another $150 million has been contributed internationally to support COVID-19 relief efforts, Ross added. Organizations that have benefited

Insurers and individuals donated $1.3 million to the Insurance Industry Charitable Foundation’s Children’s Relief Fund, said IICF CEO William Ross.

January 2021 » InsuranceNewsNet Magazine


COVER STORY VIRTUAL VIRTUES include Covenant House, Blessings in a Backpack and numerous food-related charities. Fundraising has been a challenge in the age of social distancing, Ross said. “We’ve seen a lot of what we refer to as the virtual pivot,” he said. “Many of our traditional coming-together activities — whether volunteer activities or the annual fundraising dinners — have been converted to virtual types of experiences. But I think we all still have the ability to run effective fundraising programs. And we are seeing insurance organizations doing amazing things.” The foundation’s pandemicrelated work is far from over, Ross said. “I think it’s fair to say that for at least the first half of this year, hopefully not more, we’ll still be dealing with COVID-19. And I think you will see continued support for programs that help those affected by it.” In 2021, IICF will launch another children’s relief campaign, focused on food insecurity and education, Ross said. He said he believes the industry, through individual contributions and efforts by carriers’ own charitable foundations, will continue to have pandemic relief efforts at the top of their philanthropic agendas in the current year. Also in 2021, IICF will conduct the International Step Up Challenge. With so many people unable to exercise in gyms or participate in activities such as 10K races because of COVID-19 restrictions, the challenge is to raise funds while giving people an opportunity to exercise safely at home. “It will run for six weeks, and it’s an opportunity to compete with how many steps can you get in, whether that’s running or walking or biking. And it allows us to convert those into steps in competing,” Ross said. “The top three winners who did the most steps will be able to make a personal grant to three organizations. It’s a way for us to help people with their physical and mental health while helping those in need.”

Easing Women’s Burden

The COVID-19 pandemic has placed extra burdens on women, and Deputy 20

Stephanie McCullough serves on the steering committee for the Women’s Economic Security Initiative in Philadelphia.

Secretary-General of the United Nations Amina Mohammed called these burdens a “shadow pandemic.” Those who work with women who are breaking out of poverty and into self-sufficiency are finding COVID-19 adding another layer of challenges to those already faced by lowincome women. Stephanie McCullough knows these challenges well and is using her financial background to help women turn their situations around. McCullough is the owner of Sofia Financial in Berwyn, Pa., and serves on the steering committee for the Women’s Economic Security Initiative in Philadelphia. The initiative’s goal is to help all women in the region attain financial well-being for themselves and their families. The initiative is part of Women’s Way, a nonprofit organization supporting equal opportunity for women and girls, and gender equality for all. McCullough attended a networking event three years ago and met someone who eventually introduced her to the executive director of Women’s Way. The

InsuranceNewsNet Magazine » January 2021

exec was looking at ways the organization could help boost women’s economic security, and she discussed her ideas with McCullough. “If we can find a way to help women be more financially stable, then everything else gets a little bit easier,” McCullough said. “There is a ton of research that shows when women are financially secure, they take care of their families and their communities and make the world a better place. And that’s my belief as well.” McCullough said she agreed to serve on the initiative’s steering committee, which comprises women representing many sectors of the community, including women who’ve been there. “These are women who have experienced economic insecurity or who are currently living through it,” she said. “That’s been really fascinating to me. I just feel so privileged too, because I hadn’t done work in nonprofits before. And I haven’t had the experience that these women have. Most of my clients at least can get by. So it’s been really eye-opening.” One of the initiatives in which McCullough is involved is a financial coaching project, where Women’s Way funds training on how to become a financial coach, and those coaches work with women in the community. McCullough said she added a section on women and money to the training “because that’s my focus.” “The coaches go out to places such as child care centers and talk to the staff and the families of the children there, try to get them on board to do one-on-one coaching with them,” she said. The initiative is focused on lowerincome women, and McCullough said she has learned more about the financial needs of that segment. “It’s saving up that emergency fund. Dealing with debt. And getting enough


The Pandemic Has Placed A Greater Burden On Women • Women suffered approximately 60% of pandemic-related job losses. 13.9% of women are unemployed, compared with 11.6% of men. • Four times as many women as men dropped out of the labor force in September. A lack of child care was the reason cited by 1 in 4 of those women. • 1 in 5 working mothers is considering dropping out of the workforce to care for children, while an additional 15% of working mothers say they may cut their hours. • 38% of working women say it isn’t possible to do their jobs by working from home. Sources: National Women’s Health Network, American Progress.org, Institute for Women’s Policy Research, Wall Street Journal

in the bank to handle that unexpected expense. Getting out of that paycheckto-paycheck cycle and getting away from payday loans.” The COVID-19 pandemic has placed even more of a burden on the women the initiative serves, McCullough said. “Sally Krawcheck [CEO of Ellevest] called this current situation a she-cession. Women have been disproportionately hit by the job losses because a lot of the lower-paying jobs are filled by women. A lot of these women are moms, and many of them are single moms. So much falls on them already. But now the child care centers are really having a difficult time keeping it together and staying open. Kids can’t leave the house to go to school, so a lot of women are forced into homeschooling their kids.” Looking beyond the pandemic, McCullough said the initiative is considering ways to help women become even more financially empowered in the future. “We are looking at the wealth gap for women. That’s not the same as the income gap for women. That’s not just telling women to get a higher-paying job. It’s also about teaching women how to build wealth, build some assets, have some positive net worth. Because that’s the key to breaking the generational poverty cycle.”

Fighting Isolation, Embracing Inclusion

Humans have a need to connect with others, and pandemic restrictions have

made that connection challenging over the past several months. One group feeling the effects of these restrictions is people who have autism. It’s a group that Andrew Komarow knows well. Komarow is the founder of Planning Across The Spectrum in Farmington, Conn., and

he — as well as half of his staff — is autistic. Komarow’s practice specializes in advising individuals, families and employers of those who have autism or other disabilities. Outside of work, he is an advocate for those who have autism. He volunteers with Autism Speaks and serves on the state of Connecticut’s Autism Advisory Committee. He also started a selfadvocacy group for other autistic people in Connecticut and runs a Facebook group for autistic adults. Komarow has a particular passion for helping autistic adults, who often face a “cliff ” when they age out of a system designed to provide services for children and teens. Although he assists them in accessing services they may need, he is more concerned about helping autistic adults attain independence. “For those who want to live independently, there really is a gap in employment, in housing,” he said. “I want to help people navigate around those barriers that keep them from being independent.” Komarow said he is most passionate about helping autistic adults gain employment or become entrepreneurs. But

Andrew Komarow advocates for those with autism, while also finding ways for autistic individuals to socialize and participate in society.

January 2021 » InsuranceNewsNet Magazine



More Than Money Insurance carriers, through their foundations, supported families, frontline workers, veterans and teachers during the pandemic in many ways, including:

to get out of the house are very important to them.”

Finding A Purpose Amid Sorrow

Many Americans have seen their mental health become a casualty of the long months of the pandemic. Larry Sprung and his wife, • More than 400,000 masks donated to frontline health care Denise Milano Sprung, are volworkers. unteering their time and efforts to help make sure no one experiences • An industrywide commitment to deliver more than 1 million the pain that they did after a family meals to families in need. member died by suicide. Sprung is founder of Mitlin • Hosting blood drives. Financial in Hauppauge, N.Y., and his wife is the firm’s marketing direc• Purchasing and donating small-business gift cards to health tor. They founded the Keith Milano care workers. Memorial Fund within the American Foundation for Suicide Prevention. • Offering no-cost life insurance policies to frontline health Milano, Denise’s brother, died in 2004 care workers. after struggling with bipolar disorder. “That was a life-changing expe• Providing additional time off to volunteer in the community. rience for me as, up to that point, I hadn’t known anyone directly • Increased matching of employee donations to local charities. related to me who suffered from SOURCE: Insurance Industry Charitable Foundation mental illness and ultimately died from it,” Sprung said. he knows many of the things that most and the families and friends involved with Sprung said that as he learned more adults take for granted often are more dif- their lives. “We have some in-person activ- about mental health and suicide, he disficult for those with autism. Take driving, ities, but we also have some fun activities covered that the number of Americans for example. that can be done through artificial intelli- who die from breast cancer annually “Transportation is really important to gence or online,” he said. is roughly the same as the number of being independent,” he said. “I think the COVID-19’s restrictions on social gath- Americans who die from suicide in a year. majority of people underestimate how erings have hurt the autistic much of a challenge that is for people on community in some ways, Larry Sprung’s wife, the autism spectrum.” but hasn’t hurt it so much in Denise Milano Sprung, He also talks with employers about others, Komarow said. found her connections in the romance writing the importance of hiring a neurodiverse “Some people are OK with community to be genworkforce, and what they need to do to staying at home and haverous in their support attract and retain that workforce. “I do ing some of their activities of the Keith Milano presentations on the kinds of benefits adapted to home,” he said. Memorial Fund. they can offer that would attract every- “But the majority very much one, about how they can have policies dislikes Zoom or has a really that are inclusive.” difficult time with routines In addition to employment, autis- being disrupted. I see many tic adults need ways they can socialize struggling with not being and be a part of a larger community, able to have the social events Komarow said. He has organized video they were used to doing or gaming events and other activities, where being able to do things the autistic adults can mingle, learn and have way they used to.” fun. He also hosts an online calendar of Those who are employed sensory-friendly, autism-friendly events are having a somewhat easfrom around the nation. ier time under COVID-19, Komarow also works with the Yale Komarow said. “The ones University Project CASY (Community who have a job to go to still Autism Socials at Yale), an online and local have a routine of sorts, and community of people living with autism that routine and the ability 22

InsuranceNewsNet Magazine » January 2021

VIRTUAL VIRTUES COVER STORY issues, it’s better to seize the awkward situation and ask questions, risk the friendship, and potentially save a life.” Whether the combination of social isolation and financial stress stemming from COVID-19 is causing an increase in suicides is not yet known, Sprung said, as 2020’s suicide figures won’t be available until later this year. “But what I can tell you is that this situation is unlike anything we’ve experienced,” he said. “When you look at the last economic downturn, in 2008, what we saw was a financial crisis, and it was bad. But now you’re seeing a tremendous financial event for many people, combined with not being able to go out and see people the way you normally would and the fear about contracting COVID-19.” During the years Sprung has served on AFSP’s board, he has seen the organization’s budget grow from about $6 million annually to more than $45 million. “We’ve grown significantly, but it’s a double-edged sword. We’re happy the organization is growing, but we cherish the day when we can put ourselves out of business because the problem has been solved.” Larry Sprung and his wife have raised about $1.5 million to assist in suicide prevention efforts through a number of activities including this auction.

“But breast cancer gets funding in the billions, while suicide prevention gets a speck compared with that,” he said. He eventually sought out the AFSP and began volunteering on the local level, and now he sits on the organization’s national board. Since the Keith Milano Memorial Fund was created in 2005, Sprung and his wife have raised about $1.5 million to assist in suicide prevention efforts. For about the first 10 years of the fund’s existence, the Sprungs raised money through an annual golf outing. But that event ran its course, Sprung said. He and his wife were looking at a different fundraiser, and her interest in romance novels opened a door. “My wife runs a book blog in which she reviews romance novels,” he said. “In addition to that, one of the niche markets our firm serves is the romance writer community. We help the writers handle

their assets and plan for retirement. One of the writers was having a book launch and asked whether she could contribute some of her proceeds to the fund. How could we say no?” Now, every May, between 30 and 40 romance writers contribute a portion of their book sales to the fund, Sprung said, with an average of $30,000-$40,000 raised annually. The Keith Milano Memorial Fund has provided money for several suicide prevention projects, many of them films, Sprung said. One was a film on bipolar disorder, and one film was aimed at high school students, educating them about mental illness. The fund also contributed to a public service campaign on TV, Instagram and Facebook called “The Awkward.” The campaign “tells young people that if they think their friend is having mental health

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

Plus: Don’t Miss Our Giving Issue Special Section The industry’s most socially responsible organizations are doing great things for the causes they care about and the communities they support.


January 2021 » InsuranceNewsNet Magazine


THE 2021

GIVING ISSUE In this special section, we searched for the industry’s most socially responsible organizations who are doing great things for the causes they care about and the communities they support. We uncovered so many great philanthropic initiatives by true missiondriven organizations who are making the world a better place.

In the spirit of giving, 10% of proceeds will be paid forward to Big Brothers Big Sisters, the nation’s largest donor- and volunteer-supported mentoring network.

INSIDE Strenghtening Communities, Stepping Up and Speaking Out by Ohio National PAGE 25 How Simplicity Group Agents Are Helping Clients Ease The College Burden by Simplicity Group PAGE 26

There’s Donation. And Then There’s Passion For A Cause. by InsurMark PAGE 27 Each Legacy Tells A Story: COF’s Fraternal Legacy Rider by Catholic Order of Foresters PAGE 28

2021 Giving Issue • Special Sponsored Section


Strengthening Communities, Stepping Up and Speaking Out Ohio National brings change from within, one community at a time


hio National has an established legacy of giving back and actively participating in the community. This legacy reflects the values and culture at Ohio National for more than 110 years. President and newly elected Chief Executive Officer Barbara A. Turner, CRCP, continues to demonstrate this long-standing commitment. At the start of the COVID-19 pandemic, the company’s role took on added significance to rise to the challenge of supporting each other and their community through the upcoming challenges. Barbara Turner In April, Ohio National was President and CEO one of the first companies to support the United Way of Greater Cincinnati’s COVID-19 relief fund, donating $100,000 and helping the United Way surpass its Regional Response $5 million fundraising goal within seven weeks. Regional nonprofits received $7.2 million from the fund as of May 19, 2020. It has already distributed more than $1 million to local organizations that provide food, shelter, childcare and senior services to the most vulnerable individuals and families affected by the pandemic. Turner serves as vice chair-elect of the United Way of Greater Cincinnati and was a strong voice in calling for others in the community to support those in need through this effort. In addition, even while working remotely, Ohio National associates pledged over $800,000 to United Way through their 2020 annual campaign, separate from the Regional Response Fund contribution, and exceeding last year’s donation. As the pandemic continued into the summer, a new challenge arose through social unrest across the country. Communities were forced to grapple once again with civil and human rights issues that left many feeling anger, sorrow and frustration. Silence is not an option for Ohio National, whose leaders quickly joined the community to drive change and understanding. “At Ohio National, we feel we must be a part of this change,” Turner explained. “It’s time we all speak up and take a stand against racism and discrimination in any form. Ohio National seeks to cultivate and nurture an environment of diversity, equity and inclusion. We believe everyone deserves to be treated with dignity, honor and respect regardless of race, ethnicity, gender, sexual orientation or any other factor — no exceptions.” Continuing its commitment toward social justice, Ohio National was presenting sponsor of a Think Tank on equity

and inclusion on September 24. With Barbara Turner as a featured speaker, associates joined 1,000 community and business leaders to discuss what’s next to move busiOhio National was nesses and communities recognized as a leader forward. in gender equity by Additionally, the compaQueen City Certified, ny-supported associate rethe first data-informed, source group, Ohio National cohort-based leadership Committee on Inclusion and program for gender equity Awareness (ON CIA), helped in the United States. The facilitate associate dialogue. company remains committed ON CIA continues to offer to advancing diversity associates the resources and and inclusion efforts by forums to learn about diverreinforcing blind recruitment sity, equity and inclusion ispolicies, enhancing benefits sues and activities. for working parents and Turner is more than a continuously assessing visionary for bettering the their hiring procedures and community. Her strong benefits. leadership on equity and equality has resulted in Their partners in the field her becoming a respected have noticed, including voice for change within the Asalyn Coachman, AB, JD industry. When she sees with Financial Architects, communities suffering, she Inc. in Farmington Hills, MI. takes actions. Embodying She added, “As an African Ohio National’s mission, American woman in an Turner is passionate about industry where few faces helping families achieve look like mine, I’m thankful financial security and inknowing Ohio National is dependence today and for actively working to expand the future. Under her leadthe diversity of our workforce ership, Ohio National looks and policyholders and that I to continue its tradition of can help build these bridges giving back and making a with their support.” positive impact towards the communities they serve.

Learn more about Ohio National by visiting www.ohionational.com.

January January2021 2021 »» InsuranceNewsNet InsuranceNewsNetMagazine Magazine

25 25

2021 Giving Issue • Special Sponsored Section

How Simplicity Group Agents Are Helping Clients Ease The College Burden


hat you’re about to read might be the most effective (and original) door-opener and strategy that a holistic agent or advisor could wish for. In short, thanks to a strategic partnership between Simplicity Group and the SAGE Scholars Tuition Rewards program, those contracted with Simplicity are turning the typical insurance conversation on its head by offering their prospects and clients up to a free year’s worth of college tuition, simply for meeting with them. Thanks to Simplicity Group agents and advisors, this more than a decade-long relationship between the two companies has already helped thousands afford higher levels of education. And there are no signs of its slowing down. “Because of [SAGE Scholars], prospects and clients now have an incentive to meet with our agents. And our agents have a way to help reduce the stress of a pure life insurance or financial planning conversation by shifting the focus to the family rather than an illustration,” Brian Schneier, chief marketing officer at Simplicity Group, explains.

tuition discounts from “list price” that are provided by the colleges — not by SAGE scholars, Simplicity or advisors. Tuition Rewards are not redeemable in cash and are accepted at participating colleges and universities. Cumulatively, students have submitted Tuition Rewards points valued at $600 million to participating colleges and universities. To earn points — which are 100% free — all someone has to do (in this instance) is meet with an affiliated member, such as a contracted Simplicity Group agent or advisor, to learn more about the program and to enroll. Once a student is enrolled, 5,000 Tuition Rewards points are instantly accumulated for a future student — with 2,000 additional points added each year by logging into the created Tuition Rewards account at least once per year — until the student selects a college. As long as the student picks and is accepted by a college or university affiliated with SAGE Scholars, those points can be converted into a scholarship and applied across four years, reducing the financial burden of college by as much as 25%! It’s a win-win-win that works like this. SAGE Scholars is proud to help families find and afford the right institution for them. Colleges and universities, which often spend up to $5,000 in marketing to acquire a new student, are happy to work with SAGE Scholars because of the caliber of student SAGE Scholars often delivers. Families are happy to find a way to guarantee a discount worth up to one year of tuition. All the while, agents and advisors are happy that they can not only meet with clients more often and more easily but also further their holistic offerings by helping families afford many otherwise-outof-reach schools.

“We wanted to find a program that creates the ultimate win-win-win for families, colleges and agents, and after searching for years, THIS IS IT.” — Brian Schneier While many readers of this magazine are familiar with the array of techniques, tips, trainings, platforms and products Simplicity Group offers, the SAGE Scholars Tuition Rewards program remains an insurance professional’s greatest prospecting tool.

A FREE College Savings Plan Like No Other

Founded as a small organization with the goal of helping families find and afford the right college for their children, SAGE Scholars is today the nation’s oldest and largest private college preparation and funding organization, spanning more than 421 participating colleges and universities in 46 states. SAGE Scholars operates on a Tuition Rewards point system. Each point is equal to a guaranteed minimum of $1 toward tuition at participating colleges and universities and has the ability to cover up to an entire year’s worth of tuition spread over a student’s four years. The scholarships are 26 26

InsuranceNewsNetMagazine Magazine »» January January2021 2021 InsuranceNewsNet

For more information on the SAGE Scholars Tuition Rewards program, Simplicity Group and how you can start helping your clients more easily send their loved ones to college, visit SimplicitySAGE.com today.

For Financial Professional Distribution Only Sage Scholars is an independent company from Simplicity Group Holdings. Folds of Honor is an independent charity not directly affiliated with Simplicity Group Holdings. 1426506-1220


2021 Giving Issue • Special Sponsored Section

There’s Donation. And Then There’s Passion For A Cause. How InsurMark is giving hope to the families of the fallen


hile it’s common for companies to annually donate to charitable and honorable causes, InsurMark and its founder, Steve Kerns, are elevating what “giving back” means. Impassioned by more than philanthropy, the advisor development leader is on a mission to protect and strengthen the legacy of America’s fallen and wounded soldiers, and as you’ll see in this Q&A with Steve Kerns, the firm and its founder actively support their chosen organization, Folds of Honor, year-round.

Further, we have fundraising events throughout the year to raise money and awareness for the Folds of Honor mission and partnership. We host a range of different fun and competitive fundraising events that garner participation from our customers, our business partners and our community members. And in 2021, we are embarking on a new fundraising mission. Each month in 2021, I’m going to play a 100-hole golf marathon in a single day — 12 golf marathons, 1,200 golf holes. Plus, we’re often promoting the organization via our website, where we update information about the charity, their current fundraising events, and the various ways our customers and partners can contribute to the charity.

INN: What is the Folds of Honor charity?

INN: How are agents and advisors working with you able to help the charity succeed?

Steve: Folds of Honor is a charity with a mission to provide Steve Kerns scholarships to the children and Founder of InsurMark spouses of America’s fallen and disabled military service members as a way to honor [the service members] and the bearers of their legacy.

Steve: Agents and advisors can partner with us by contributing to our Folds of Honor donation fund, sponsoring a college student scholarship within their own community directly, participating in Folds of Honor events and helping promote awareness of the Folds of Honor mission.

INN: Why did your company choose to donate to this charity, and how long ago did you start? Steve: We deeply support their mission to honor the sacrifice of our fallen soldiers by educating their legacy, their children. We believe education is very important, and we especially believe the families of those serving our country deserve to be given every opportunity. So we have been a part of — and officially adopted — Folds of Honor as our charity of choice since 2014. We also wanted to provide our advisors with an opportunity to infuse corporate responsibility into their own companies and to contribute to the Folds of Honor mission within their communities.

For more information regarding Folds of Honor and how working with InsurMark can help strengthen your business and your own community, visit InsurMarkScholars.com.

InsurMark is a Simplicity Group company

INN: How does your company participate? Steve: We try to be as involved as humanly possible. For starters, we provide multiple college scholarships to students we connect with through Folds of Honor and provide them a special ceremony to present their scholarship and welcome them into the InsurMark family.

January 2021 » InsuranceNewsNet Magazine


2021 Giving Issue • Special Sponsored Section


Each Legacy Tells A Story: COF’s Fraternal Legacy Rider How Catholic agents are sowing the seeds of their clients’ faith for the next generation of insurers


om died of a very rare debilitating disease. At the end of his life, his wife had to do everything for him; it was very difficult for her to get him and his wheelchair into their church. Now Tom’s church has handicap access, which was funded by his Fraternal Legacy Rider, that will serve generations to come. All over America, stories like Tom’s are opening the hearts and minds of people who never imagined they would have the resources to leave a legacy gift but who now have the opportunity to do just that through the Fraternal Legacy Rider. Committed to the people they serve and to the communities in which they live, Catholic Order of Foresters (COF) has heard many stories about their Fraternal Legacy Rider. Executive Vice President and Chief Marketing Officer Mark Walsworth, CFP®, CLU®, RICP®, FIC, is in the forefront of nurturing these legacies across the nation. Here is his story.

for the family they love while also creating a legacy. When Catholic agents learn about the Fraternal Legacy Rider, they have a very positive response. They tend to think, “Wow, this is going to help us sell a lot of life insurance.” But people buy life insurance because they need life insurance. The rider creates impactful stories, and that helps sell this product to members purchasing a new policy. It creates a connection with something meaningful, and that adds a lot of value when someone is choosing with whom to do business. I helped an agent who was working with a young family. They were in their early thirties and had their first child, so the agent completed a needs analysis. We went back to the family, and the agent made the presentation — he did not bring up the rider until going through the application, and when he asked which Catholic charity they would like

“This does not change the profit metrics for us as a fraternal benefit society. This is about providing real, measurable value to the policyowner and at the same time helping us to be good stewards of the Catholic community. This is Bringing Catholic Values to Life.” — Mark Walsworth, Executive VP and CMO Bringing Catholic Values to Life is more than a tag line; it is our commitment to our members. I explored how we could do more to impact the broader Catholic community. Charitable giving with life insurance policies is not a new concept — it goes back a long time — but I wanted to take it a step further. How could we help all families provide such a gift? Our Fraternal Legacy Rider is truly a gift of charity from that member, but at no cost. Yes, that’s right, absolutely zero cost of additional premium. When we got past the conceptualization of this rider and looked at the pricing of it, there was very little change to our profit metrics. The gift goes from the member to the charity without taking away from what the member is leaving their family — that is really the key component. The Fraternal Legacy Rider provides an additional 5% of the original policy as a charitable gift. If you buy a $100,000 policy, we will give an additional $5,000. If you buy a million-dollar policy, we give an additional $50,000. Families will still receive the $100,000 or the million, respectively, left to them. The Fraternal Legacy Rider is not for us. We want this to be available to people who buy our products, but we also want our members to benefit by providing a full payout to their family while also giving an additional 5% to the Catholic charity of their choice at no additional cost. They can provide 28 28 InsuranceNewsNet Magazine » January 2021 InsuranceNewsNet Magazine » January 2021

to designate for the rider, the couple was shocked and amazed to learn that their policy would provide $50,000 to their Catholic charity of choice at no additional cost. The wife, who had gone to a Catholic school, was thrilled her policy would provide a $50,000 gift to her alma mater in her name. It got them really excited about buying life insurance because it was going to do something great beyond providing for their family. What it comes down to is leaving behind more than just money; it is about leaving behind a legacy.

To learn how you can start creating legacies with Catholic Order of Foresters, visit www.FraternalLegacyRider.com.


IUL Sales Jump In 3Q Indexed universal life insurance

U.S. Individual Life Insurance Annualized Premium Growth Forecast 2019 - 2022 2019 2020 (forecast) 2021 (forecast) 2022 (forecast)

Total +5% -7% to -3% -3% to +1% 0 to +4%

showed signs of life in the third quarter as sales jumped out of the tough first half of the year, according to LIMRA’s third-quarter sales SOURCE: LIMRA reports. The turnaround was surprising because of the difficulty in selling more complex products that require more intensive underwriting in a remote environment. Sales have been stronger for small face term products that are simpler for underwriting and for consumers to understand online. IUL sales were up 3% in the third quarter, the first positive quarter this year. And even though sales are expected to continue into the fourth quarter, the segment is not likely to come out of the year an overall winner on the sales charts, said Elaine Tumicki, corporate vice president, LIMRA Insurance Research. “While third-quarter IUL premium has recovered somewhat from the losses in the first half of the year,” Tumicki said, “it will be difficult to match the strong IUL sales of the fourth quarter 2019. LIMRA is forecasting IUL premium to contract 3%-7% in 2020, compared with 2019 results.”


The pandemic has triggered significant challenges for the life insurance industry, but LIMRA is projecting strong policy growth to resume by next year. Historically low interest rates and continued market volatility combined with higher unemployment and operational disruptions caused by social distancing measures contributed to the decline in life insurance sales in the first half of 2020. COVID-19 has also, however, increased consumer awareness about the need for life insurance. LIMRA research finds six in 10 Americans say they have a heightened awareness about the need for life in s u ra n ce due to the pandemic, and 29% say they are more likely to buy DID YOU



life insurance in the next 12 months in response to COVID-19. This represents 75 million Americans.


Luke Kaplan i s “ bu l l i sh ” on t he 10-year outlook for independent distribution in the life and annuity space. But there are hurdles that need to be cleared. Kaplan, president of life and annuity brokerage for Gallagher, discussed the three hurdles during a recent discussion by the National Association of Independent Life Brokerage Agencies. » Succession planning. The industry is great at doing succession plans for others, but very poor at doing their own planning, Kaplan said.

QUOTABLE Term insurance, due to its design and price, is often the quickest sale and is the most readily available online end-to-end product. — Elaine Tumicki, corporate vice president, LIMRA Insurance Research

meet prospects and clients in a manner they are used to. » New business opportunity. Alternative forms of distribution are key to survival and staying ahead of the curve.


Consumer advocate Birny Birnbaum urged the National Association of Insurance Commissioners’ Life Insurance and Annuities Committee to consider five goals for future studies of indexed insurance illustration regulation. They are: » Simpler explanation about how the product operates. » Apples-to-apples comparison of accumulation with alternative investments. » Show the cost and value of insurance. » Show meaningful measures of risk and return. » Set realistic expectations for policyholders.

» Technology. A bigger commitment to technology is needed to maintain profitable balance sheets and to

Mutual of Omaha replaced the Native American in its logo with a lion, in a Source: Mutual of Omaha nod to “Wild Kingdom.” Source: The Wall Street Journal January 2021 » InsuranceNewsNet Magazine



Politics Is The Wild Card In Planning For Taxes A tax-free gift to a trust that owns life insurance can potentially avoid all taxation. By Ron Sussman


f you make a living selling financial products to high net worth clientele, your success or failure in any given year is inextricably tied to the U.S. tax code. Whether it’s life insurance, annuities, stocks, bonds or any other product, contract or construct, the need for or desire to own the products you sell relies on your client’s perception of the current and future tax implications. And the tax code is a rapidly moving target. The highly politicized tax environment we are in right now shows no sign of abating, making it extremely difficult to provide advice for any period longer than one legislative session. And the very public social discourse about these topics tends to obfuscate changes that are 30

simply too important to ignore. Take, for example, the laws regarding the estate tax. Like it or not, the estate tax is a political punching bag that has caused mass confusion over time. It never goes away (although it does temporarily sunset), but your heir’s chances of being affected by it, as well as the degree to which they are affected, are as random as a coin toss. Unfortunately, its purpose, in the grand scheme of socioeconomic engineering, has been hijacked by political hacks as a convenient boogeyman to scare wealthy voters. So, if your clients happen to die when the law sunsets, their estate could be almost totally exempt from estate tax (such as what happened with George Steinbrenner in 2010), or they could be unlucky enough to die in a year in which the exemptions are unusually low, leaving their estate owing a boatload of taxes. It’s a total crap shoot. Make gifts that use up the (potentially) excess gift

InsuranceNewsNet Magazine » January 2021

tax exemptions. It’s a use-them-orlose-them proposition. A tax-free gift to a trust that owns life insurance can potentially avoid all taxation. From a life insurance perspective, the last iteration of the estate tax exemption was particularly devastating to our sales. A unified credit of $23 million exempts an awful lot of estates from tax. And those clients who previously had been subject to the tax have been dropping survivorship policies because they are convinced that their estates are safe from taxation, based on the law as it stands today. I’m not sure they understand that they and their spouses need to die this year to make that true. Recently, I’ve had older clients drop or sell their multimillion-dollar survivorship policies because they’re convinced they won’t need them. Some of them are right. Their estates are just not big enough to be subject to estate tax, primarily because they lived so

POLITICS IS THE WILD CARD IN PLANNING FOR TAXES LIFE much longer than they or their children anticipated and had the time to gift or spend their assets. Somewhere down the line, the others will realize that the policies were valuable and should have been retained, but they will be unable to repurchase that coverage at anywhere near the price they were paying previously, if they can get coverage at all. The tax on ordinary income is another good example of a moving target. Rates of taxation in retirement are one of the key elements of assembling assets to meet the longevity risk. And it’s entirely possible that in the relatively near term, the rates and methods of taxation on capital gains, ordinary income, etc., may change significantly. But, realistically, there is no possible way to know what rate of taxes you might pay decades in the future.

Politics is always the wild card.

Further complicating matters is the political environment, where any semblance of truth has long departed. How do you plan for the future in an environment where logic and math are completely ignored? Do we all want to pay lower taxes? Of course. Will newly minted trillion-dollar deficits related to, among other things, a global pandemic be repaid by magical thinking, or will we all need to contribute to the cost via higher taxes? My guess is the latter. Your feelings about government and taxes notwithstanding, it seems that the prevailing attitude among advisors and their very wealthy clients is that taxes must go up in order to repay the enormous debt that will be the legacy of the current administration. Which taxes will change, and to what degree? Who knows? This is not a system you can


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Depending on the types of assets contributed to the trust, the grantor may have a tax liability for any capital gains or ordinary income that accrues. But if you monetize those assets and contribute cash to purchase — for example, a variable life policy — you can effectively shield the asset and all of the growth from taxation forever.

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In addition, if properly funded and managed, a cash accumulation product will provide for taxfree income to the trust beneficiary (spouse) when necessary or desired. In addition, the grantor may want to purchase a term insurance policy on the trust beneficiary, because if the beneficiary were to die before using all of the assets of the trust, any remaining assets will pass to the children (or other designated secondary beneficiary) but not to the grantor. So, in the case of a divorce or premature death, the term insurance returns the asset to the grantor.

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When you model this out, especially in a high tax state, the benefits of the life insurance policy and its tax-favored deferral and distribution are hard to argue with.

January 2021 » InsuranceNewsNet Magazine




The Life Insurance Retirement Plan A private placement variable life insurance on the executive’s life can provide a great way to solve several issues. First, it replaces the lost coverage from the group plan at a much more competitive cost. Second, it can be funded as a nonmodified endowment contract, up to the IRS limits, and provide tax-deferred growth and tax-free income in retirement. We recommend the insured be the owner if the main purpose is tax-favored retirement income. Or the policy could be owned by a trust so that the growth and any excess death benefit can be passed to heirs outside of the taxable estate. The secret sauce to PPVLI is the underlying portfolio of hedge funds. Most funds are very tax-inefficient. Wrap these funds in PPVLI to eliminate the tax problem. The objection we hear most from clients is that the cost of insurance makes the PPVLI an expensive alternative. I disagree. The correct way is to compare the actual policy costs with the future taxes. When you do this the PPVLI shines, especially in an increased tax environment. PPVLI has very high minimum premiums, usually $500,000 per year for seven years. Most are funded with multiple millions, so this will not be suitable for every client. game. You can only plan for the worst and hope for the best.

Taxes are a permanent problem.

The wishful thinking that we will have a robust economy and responsible governance thus resulting in lower taxes for decades is a fairy tale. Now would be good time to start looking at tax planning while the exemptions and favorable tax rates are still available. For example: » Create a spousal lifetime access trust, and fund it with an overfunded, high cash value product. » Start a life insurance retirement plan, and fund it with variable life insurance. » Make a large charitable contribution. » Start a private placement life insurance policy, and use it for retirement income. If your clients see the products you sell as a fix for a temporary problem, 32

they are going to be wasting a ton of money. Insurance products work best when policies are purchased properly, with adequate (and hopefully more than adequate) disclosures about the specific risks and rewards. Insurance is designed for the long term and should be understood as such. Not to mention that the beneficial tax treatment enjoyed by life insurance products is the gift that keeps on giving. Sold responsibly, our products provide a reasonable return on investment. Even in a low interest rate environment. It is reasonable and responsible to use life insurance as the anchor in a well-managed portfolio if the policy is properly structured. For example, this would be a good time to leverage taxable accounts into tax-free long-term care benefits. Maybe, instead of constantly changing course, we could help our clients understand and use their life insurance policies for a variety of timely and beneficial purposes so that they won’t perceive insurance as a commodity. Nothing is better

InsuranceNewsNet Magazine » January 2021

than seeing your clients benefit from your recommendations, especially when it comes at the most opportune moment. Last but not least, we seem to be at an economic inflection point. Regardless of what happens politically, the way we understand taxes today must change. Life insurance happens to be one of the very few products that offer reliable tax benefits and the flexibility to use them for a variety of valuable purposes. Let’s take advantage of this opportunity while we can. Ron Sussman is founder and chief executive officer of CPI Companies. Ron may be contacted at ron . sussm a n @ in n feedback.com.

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3Q Annuity Sales Perk Up

All Deferred Annuity Sales Indexed Structured





25.4% 0.9%


30.7% After devastating second-quarter annuity sales torpedoed by the COVID-19 pandemic, third-quarter numbers provided a welcome SOURCE: Wink’s Sales & Market Report comeback of sorts. Still, annuity sales have a way to go to get back into growth territory. Deferred annuity sales came to $54.2 billion, an increase of more than 18% over 2Q, but down 1.1% when compared with 3Q 2019, according to Wink’s Sales & Market Report. “Sales are up for all product lines from last quarter, but sales compared to last year are still down double digits for most annuity types,” said Sheryl J. Moore, president and CEO of Wink. “The exception to that is MYGA sales and the lesser structured annuity sales, which are both up double digits.” Third-quarter sales of a few main product lines tracked by Wink, as compared with 3Q 2019: » Indexed annuities, $13.7 billion, down 26.1%. » Fixed annuities, $488.6 million, down 32.7%. » Multi-year guaranteed annuities, $16.6 billion, up 69.7%. » Structured, or registered index linked, annuities, $6.2 billion, up 30.4%. » Variable annuities, $17 billion, down 19.6%.


The average American turning age 65 today can expect to live 40% longer than someone who turned 65 in 1950, according to a new study from the Longevity Project in collaboration with Principal Financial Group and the Stanford Center on Longevity. People entering retirement tend to either overspend and withdraw funds at unsustainable rates or they underspend, denying themselves basic needs because they’re afraid of running out of money, the study found. Annuities can play an important role in addressing those issues. But according to a Morning Consult poll featured in the study, only a small percentage of retirees and pre-retirees (7%) are counting on annuities to be an important part of their retirement portfolio. This compares to much higher reliance on Social Security benefits (64%), personal savings and investments DID YOU



(38%), and 401(k) or 403(b) plans offered by employers (35%). Not surprisingly, study authors say low trust and knowledge of annuities, financial advisors not offering annuity products, and consumers being reluctant to part with a chunk of funds as reasons for the low use of annuities.


Federal prosecutors say the self-proclaimed “Annuity King” of Sarasota, Fla., was really running a Ponzi scheme. Last week, additional charges of filing false income tax returns and tax evasion were slapped on Phillip Roy Wasserman, who the U.S. Attorney’s Office has accused of bilking elderly investors out of at least $6.3 million. Wasserman was indicted in June by a federal grand jury on multiple fraud counts of running an alleged

QUOTABLE The impact of social distancing may have had a larger impact on independent agents because they likely don’t have the same level of resources and support. — Todd Giesing, senior annuity research director, Secure Retirement Institute

“fraudulent insurance venture” that included Ponzi-style payments to victim-investors. He is known for investment seminars about annuities and life insurance attended by thousands of Florida seniors. Wasserman, 63, a former lawyer and a licensed insurance agent, spent much of the investors’ money to live a lavish lifestyle, prosecutors allege.


The long saga of Department of Labor regulation of financial products sold with retirement dollars, specifically annuities, is not over yet. President Donald Trump’s administration successfully erased the controversial fiduciary rule but waited too long to write new rules. The DOL’s investment advice rule was on track to be published in December, which is within the 60-day window for the incoming Biden administration to withdraw it. Legal analysts say they expect that to happen, with the Biden team s t a r t i n g over. The Trump rule has two main parts: a new exemption allowing advisors to provide conflicted advice for commissions and a reinstatement of the “fivepart test” from 1975.

The number of Americans retiring every day has more than doubled over the last 20 years. Source: U.S. Census Bureau January 2021 » InsuranceNewsNet Magazine



The Family Tree Strategy That Keeps Money In The Family How annuities can spread wealth to subsequent generations while helping advisors retain clients in the family. By Deborah A. Miner


oney is already in motion — are you? The “great wealth transfer” is here, and it’s happening. Trillions of dollars in assets have begun moving from baby boomers to their Generation X and millennial offspring. And if past experience is a guide, most of those ascending generations will forgo financial professionals who once were their parents’ “go to” resource. Heirs typically turn elsewhere when the client who initiated the relationship dies. Research shows: » Up to 70% of widows change financial professionals within a year of the death of their spouse. » As many as 90% of children do the same in the first year after the passing of their parents. Connections must be created while a common element exists. Engaging the spouse and children in a significant way — while the client is alive — improves the likelihood of retaining relationships and assets.

Six Steps For Connecting Generations

Using a generational reach approach, connections created during the original client’s lifetime can be maintained and even expanded. If the relationship is retained and grown, so too may be the assets. 1. Document a family tree. Map out marriages and outline offspring. Work to gain a good understanding of all the characters in a client’s life story. Who are all the potential beneficiaries of the client’s love and legacy? Learn the family dynamics. Nurture expectations for 34

multiple generations. compounding of annuity assets. An ex2. Expand the relationship. Is the ample of an annuity-based multigenerspouse already a client? Is the client ational strategy follows. the couple? It’s very important to engage both spouses in financial discussions. Generate Income For Generations Get to know each spouse individual- A grandparent can create a multigenerly. Know their priorities, preferences, ational income gift for their family or a dreams and fears. grandchild — without life insurance. One 3. Survey the landscape. Next- such approach uses a single-premium generation clients — albeit currently immediate annuity and makes the grandwith fewer assets — represent the fu- parent and grandchild joint annuitants. ture. Skeptics may dismiss the strategic The grandparent can create payouts for and economic rationale for expending the life of the grandparent and grandchild, time and energy pursuing prospects of provide tax-deferred growth, spread out lesser means. But it makes perfect sense tax liability, and avoid probate. when a direct line connects prospective One option is a simple grandparclients with current ones. The oppor- ent-grandchild strategy, providing an tunity combines two advantages: avail- annual “birthday gift” to a grandchild. ability and access. Payments start with the grandparent 4. Connect with younger gener- and continue to the grandchild at the ations on their terms, using their grandparent’s passing. preferred methods. Recognize their A second strategy — a family tree “always on” connectivity and overloaded strategy — can continue payments afattention spans. Take advantage of digi- ter the death of the grandparent to a tal means and social media. Acknowledge special Using a generational reach events and significant approach, connections created milestones in their lives. 5. Build credibilduring the original client’s ity with both Gen X lifetime can be maintained and and millennial heirs even expanded. by bringing value to those relationships. Initiate meaningful multigenerational series of successor owners, rather than discussions on financial matters of in- to only the grandchild. For example, terest. Address needs and concerns by suppose Grandpa wants to leave an ingeneration and age. Establish yourself come stream for his family long after as an educational resource on financial he’s gone. His loved ones include his topics. spouse, his son and daughter-in-law, 6. Introduce financial strategies and ultimately his grandson. Grandpa that bridge generations. Life insur- is 72. Grandson Chris is 10. Grandpa ance not only invites a discussion the purchases a $150,000 SPIA with him whole family is more inclined to join and Chris as joint annuitants. He selects but may also advance a more holistic a life and 30-year certain period payout approach. Annuities offer many lega- with a 3% increasing payout option. He cy options and also provide an oppor- names Grandma as the successor owner. tunity to customize a legacy, create The family tree strategy proceeds lifetime benefits for beneficiaries and through five steps that in theory may extend time for potential tax-deferred extend over decades:

InsuranceNewsNet Magazine » January 2021


Pass Income ToFamily Your Family Pass Income to Your with NQ Annuities With NQ Annuities STRATEGY #2

Some grandparents support family members throughout their lives. A multigenerational income strategy can continue that support after death with annual payouts if the grandparent names a family member other than a grandchild as a successor owner. family members throughout their lives. A multigenerational Some grandparents support

income strategy can continue that support after death with annual payouts if the grandparent names a family member other than a grandchild as a successor owner.

FAMILY INCOME CASE STUDY Assumptions: $500,000 NQ SPIA Initial Premium | 5% IPO | Great Grandpa (Age 90) & Great Grandchild Chris (Age 2) | Joint Annuitants Grandpa (age 90) is Retired. He names grandma Successor Owner and begins receiving SPIA annual lifelong payouts YEAR 1 PAYOUT = $2,817 Grandpa Dies. Grandma (85) Receives the Income. Grandma becomes new owner and names son Mike successor owner.

Play A Pivotal Role In Planning

The great wealth transfer isn’t coming. It’s here. And it’s here to stay for decades to come. Financial professionals can make an investment in their future by growing their relationships to encompass spouses and heirs. Discussion of assets and taxes and estate planning and the like may be somewhat sensitive or difficult among generations, but in the long term, interaction on financial matters benefits families. And by acting as a facilitator, financial professionals are not only helping their current clients, but they’re also cultivating a pipeline of prospects potentially spanning generations.

Take It From Tom

YEAR 5 PAYOUT = $3,424 | $15,565 CUMULATIVE Grandma Dies. Son Mike (65) Receives the Income. Mike becomes new owner and names his spouse Kate successor owner. YEAR 10 PAYOUT = $4,370 | $35,430 CUMULATIVE Son Mike (85) Dies. His Spouse Kate (80) Receives the Income. Kate becomes new owner and names their child Julie successor owner. YEAR 30 PAYOUT = $11,594 | $187,147 CUMULATIVE Spouse Kate Dies. Her Single Adult Daughter Julie (64) Receives the Income. Julie becomes new owner and names her child Chris successor owner. YEAR 40 PAYOUT = $18,886 | $340,272 CUMULATIVE Julie Dies. Her child Chris (73), Joint Annuitant/Great Grandchild, Receives the Income. The income helps him meet retirement needs. YEAR 70 PAYOUT = $81,625 | $1,657,783 CUMULATIVE Chris (93) Continues to Enjoy Retirement. The income lasts his lifetime. YEAR 90 PAYOUT = $216,575 | $4,491,732 CUMULATIVE

SOURCE: Western & Southern

1. Grandpa buys an immediate annuity and will receive the payouts until his death. 2. At that time, Grandma takes over and names her son, Chris’ dad, as her successor owner. Grandma will receive the payouts until her death. 3. At that time, Chris’ dad will name his wife, Chris’ mom, as successor owner. Chris’ dad will receive the payouts until his death. 4. At that time, Chris’ mom will name Chris as successor owner. Chris’ mom will receive the payouts until her death.


5. And finally — at that time — it now becomes Chris’ turn to receive the payouts until his death. Multigenerational income strategy materials can, purely for the sake of discussion, put numbers to hypothetical scenarios. Any such illustration by necessity employs various assumptions and is always subject to change. In this particular case study, the Year 1 payout is $2,016. The Year 75 payout is $17,965. And the cumulative payout over both lifetimes comes to $549,590.

Retirement income authority Tom Hegna likes to share a multigenerational income experience. The client was clear in his wishes: “I want a guaranteed paycheck every month for the rest of my life. Then when I die, I want it to go to my wife for the rest of her life. And when she dies, I want it to go to our son for the rest of his life. And when he dies, I’m sure he wants it to go to his wife for the rest of her life. And when she dies, we want it to go to our granddaughter for her life.” The key, advises Hegna, is to make certain the new owners continue setting up the right successor owners and to remain aware that the paychecks continue only as long as either grandfather or the grandchild is alive. If they’re both gone, the payouts may stop. As a final thought, cautions Hegna, “It’s important to remember that annuities are designed to be owned for a long time — especially in a multigenerational scenario — so you want to be sure the annuity company you work with will be around a long time 3|4 too.” Deborah A. Miner, JD, CLU, ChFC, RICP, is assistant vice president of advanced markets for W&S Financial Group Distributors. She may be contacted at deborah.miner@innfeedback.com.

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January 2021 » InsuranceNewsNet Magazine


HEALTH/BENEFITSWIRES Millennials Hit by Surprise Medical Bills

Millennials Battle Surprise Medical Bills Millennials are more likely than older gener-

Have you experienced a surprise medical bill in the past year? Millennials Gen X Boomers and older | 0

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ations to receive a surprise medical bill, and SOURCE: Healthcareinsider.com when they do, they have less money in the bank to pay for it. More than one-third (35%) of millennials responding to a healthcareinsider.com survey said they were handed a surprise bill in the past year. That compares with 27% of Generation X and 24% of baby boomers and older respondents. When millennials get that surprise bill, it tends to be expensive. More than half (51%) of millennials who said they received an unexpected medical bill said they were on the hook for more than $2,000. And a bill that size can hurt financially. Nearly six in 10 (57%) millennials said they have $3,000 or less in savings they could use to pay medical bills (including 22% who indicated they have no savings). As for health insurance, millennials are less likely than older generations to have it. The survey said 22% of millennials have no coverage. That compares with 17% of Gen X and 3% of boomers and older respondents (who may have access to Medicare). Minorities also are less likely to have health coverage. The survey showed that one in four (25%) Hispanics and roughly one in seven (15%) Blacks reported not having health insurance. That compares to less than one in 10 (9%) whites who said they have no coverage.


Long-term care begins at home, with more than two-thirds (70%) of 2019 LTC insurance policy claimants receiving their initial benefits for home-based care, according to new data from the American Association for LongTerm Care Insurance. In 2019, fewer than one in 10 new claims began with care provided in a nursing home according to the association’s study. The balance, around 18%, began with care in an assisted-living setting. According to the association, in 2019 the nation’s long-term care insurance companies paid $11 billion in benefits to some 310,000 individuals.


The majority of Americans were not familiar with proposals to lower the Medicare eligibility age to 60. But when they were made aware of it, they were in favor of it, according to a survey. DID YOU




It is hard to find a reform idea that is more popular than opening up Medicare. — Jonathan Oberlander, professor of health policy and management, University of North Carolina-Chapel Hill

the current Medicare eligibility age of 65. Fifty-seven percent of the employed group is worried, and 62% of the unemployed group feels the same.


In 2020, about three-quarters (74%) of firms offering health insurance coverage to opposite-sex spouses also provided coverage to same-sex spouses, a substantial increase from 43% in 2016, according to Kaiser Family Foundation. Of the remaining 26% of firms, 5% reported that

GoHealth said 77% of those who responded to a recent survey said they were unaware of any plan to make Medicare available to those ages 60 and older. But 64% of non-Medicare responAmong Firms Offering Spousal Benefits, Percentage of dents and 49% of Medicare Firms Offering Same-Sex Spousal Benefits, 2016-2020 beneficiaries were in favor of it. Yes No Not Encountered Among those in favor of lower21% 31% 31% 41% 5% ing the age, most prefer 60 (34%) 6% 11% 16% or 62 (33%), while fewer favor 74% 63% 57% 43% dropping the age to 55 (19%) or 50 (10%). Forty-three percent of 2016 2017 2018 2020 Source: Kaiser Family Foundation those employed said that lowering the age would allow them to retire earlier. Thirteen percent of Medicare they do not offer this benefit (similar to beneficiaries would be willing to pay the share in 2018), and 21% reported they more in premiums if it had not encountered this as a benefits lowered the standard issue. eligibility age. The larger the firm, the more likely it For those emis to offer coverage to same-sex spousployed and unemes, Kaiser found. Nearly 90% of firms ployed who are ages with 200 or more employees offered 55 to 64, most are coverage to same-sex spouses, verworried about sus 73% of smaller firms. Among the their ability to largest firms (those with 1,000 or more afford health workers), 95% offered coverage to sameinsurance besex couples. fore reaching In 2020, among employees who worked at firms offering opposite-sex spousal health benefits, 91% also had access to same-sex spousal coverage, up somewhat from 88% in 2018 and 84% in 2016 and 2017.

11% of Blacks compared with 5% of whites cited medical debts of more than $5,000.

Source: Healthcareinsider.com


InsuranceNewsNet Magazine » January 2021

Built to Last We’re in it for the long term. At our core, OneAmerica® values relationships. As a mutual organization, we are committed to helping others prepare for the future. With asset-based long-term care protection, you can provide peace of mind by protecting your clients from the impact of a long-term care event. Our personalized service and supportive approach make it easier for your clients in the most challenging times.

Call 1-866-986-9439 or visit AssetBasedLTC.com to learn how you can offer your clients protection during retirement.

Life Insurance | Retirement | Employee Benefits Source: Associated Press OneAmerica.com

© 2020 OneAmerica Financial Partners, Inc. All rights reserved.

Source: Economic Policy Institute C-34467 11/19/20

January 2021 » InsuranceNewsNet Magazine



Benefits Boost Financial Wellness As Well As Physical Wellness How brokers can provide their employer clients with benefits that help their workers’ financial health. By Susan Rupe


raditional workplace benefits such as health insurance, dental insurance and accident insurance give employees the tools they need to protect their physical health. But what about their fiscal health? Can group benefits protect an employee’s financial wellness? Researchers at two benefits carriers say financial wellness benefits are the latest offerings to help a pandemic-battered workforce obtain some security. Workers who are highly stressed due to financial reasons are more likely than average to feel a range of negative emotions, Prudential reports, with the majority feeling worried (80%), frustrated (73%), exhausted (65%), low energy (58%), in fear (59%), sad (60%) and hopeless (51%). Some even report feeling depressed and suicidal. “We found that about 29% of people who are experiencing financial problems also had some increased health 38

risk, compared with about 11% of those who weren’t experiencing financial problems, said Suzanne Schmitt, Prudential vice president of financial wellness outcomes. The COVID-19 pandemic has cast a bright spotlight on the interconnected challenges of managing mental and financial health, Prudential said in its report “The Tight Links Between Mental And Financial Health.” In that report, Prudential said many American workers are struggling to manage day-to-day activities that look nothing like they did before. In many cases, they are worried about their mental and financial well-being. The many changes resulting from the pandemic, including quarantines, social isolation, remote work, virtual exhaustion and increased loneliness, each can have a dramatic effect on a person’s well-being. The financial and mental stress brought about by the pandemic is damaging workers’ well-being, Prudential’s report said. In fact, loneliness and social isolation can be as damaging to health as smoking 15 cigarettes a day, according to the Health Resources & Services Administration. More than half of Americans say their

InsuranceNewsNet Magazine » January 2021

financial health has been negatively affected amid the COVID-19 pandemic. Among the 51% who say they’ve experienced a financial setback, some have seen devastating consequences. About 26% of the respondents to Prudential’s 2020 Financial Wellness Census had experienced an income disruption (whether due to furlough or reduced compensation or work hours), and 17% had seen their household income fall by half or more in the months following the virus’ outbreak. The link between financial health and mental health is obvious in the Prudential report. Individuals who struggle to pay off their debts and loans are more than twice as likely as others to experience mental health problems, including depression and anxiety. The impact on a person’s mental health can be particularly severe if they resort to cutting back on essentials (e.g., food, heating, medicine, etc.), or if creditors are aggressive or insensitive when collecting outstanding debts. Employees experiencing financial problems may miss significantly more days of work and hours of productivity than those who are not experiencing financial problems. Prudential found that employees who experience financial


Workers’ Feelings of Financial Stress ore “ I s pen d m ou r in w g time revie vings and a s dwindling debt.” increasing

“I’m losin g sleep be c a u se of it. I’m more on ed g e .”

te d , “Distrac , ss le e hop ed t a r t s u fr d.” e and tir

SOURCE: Prudential/Morning Consult survey results

problems lose a full week of productivity compared to other employees. In addition, those who experience financial problems are more likely to experience a short-term disability. Mental and financial health problems can devolve into a vicious circle in which one compounds the other. When employees experience poor mental health, earning and managing money may become challenging. In turn, this can create financial stress, anxiety, fear and worry. Employers are seeing how financial wellness is an important part of their workers’ overall health. Prudential’s research showed 79% of employers surveyed reported their organization will focus more on total wellness (physical, mental and financial health) in the next year or two. What can benefits brokers and their employer clients do to help ease workers’ fiscal stress? “People don’t always know where to start, and the process can be overwhelming,” Schmitt said. “So, first of all, there’s a tremendous focus on providing an overall assessment of financial health and

ess is “ Th e s t r us , me anxio ng making e fe li ed , a n d depress d from my detache .” life

“I am very anxious that something will happen, and I will not be able to pay on my debts. I cannot take another financial hit.”

then start to frame some best actions.” The second thing they are seeing is tremendous interest in programs that help employees with their emergency savings, she said. “And the next thing is working on employee debt management — having the conversation, bringing financial education coaching support into the workplace, working with expert counselors who can help workers get on a better path toward paying off their student loan debt or their credit card debt.” Another benefit that could help workers’ financial health, Schmitt said, is caregiving support. A recent McKinsey & Co. survey showed that about one-quarter of women are considering leaving the workforce because of caregiving responsibilities. Schmitt said some caregiver support could be offered through a company’s employee assistance program. “But there are some additional benefits that are available from a range of vendors that will provide education for folks who might not know where to start, or what community services are available to them,” she said. “This will allow individuals to work with a licensed

professional who’s going to personally evaluate their situation and put together a plan of care that is unique to that caregiver’s needs as well as the needs of the care recipient.” One common goal of all employee benefits, Schmitt said, “is the ability for employees to be present and productive at work.” Advisors have an opportunity, she said, “to really help employers understand that in addition to helping employees be happier, more engaged in their work by offering financial wellness programs, they also have the ability to help those employers improve their productivity and make a positive impact on their health care claims exposure.” Guardian Life’s ninth annual Workplace Benefits Study also showed a link between financial wellness and employee benefits. More than half (52%) of workers surveyed said they would face financial hardship without their workplace benefits, while 67% said they would not be able to afford benefits if they did not get them through their employer. If faced with an emergency medical bill, one-third said they would pay with a credit card, and about one in five would take out a bank loan, home equity loan, or borrow from their retirement plan or children’s college savings. Before the pandemic, 39% of workers told Guardian they felt their financial health was excellent or very good. That percentage dropped to 33% during the pandemic. In addition, 74% of those who report high financial stress also have very high medical deductibles, while 76% of those who report high financial stress have college debt. In January 2020, prior to the pandemic, four in 10 fulltime employees reported they were living paycheck to paycheck and believed they were losing ground financially. Susan Rupe is managing editor for Insurance NewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@ innfeedback.com. Follow her on Twitter @INNsusan.

January 2021 » InsuranceNewsNet Magazine


Financial facts and figures powered by AdvisorNews.com

Household Debt Is Up, But Not On Credit Cards

Debt is up, thanks to the housing boom, but credit card debt is down because consumers are paying off their cards with savings, according to the New York Federal Reserve. Because people were not spending as much money and receiving government relief, they were able to use more dollars to clear credit card debt. But that is not necessarily a good thing because that money is not flowing into the economy. “If we pay down our debts rather than go out and spend, it’s good for our balance sheets, but bad for economic growth,” Tim Quinlan, a senior economist at Wells Fargo, told Marketplace. Now that many of the government programs have run dry, “you’re kind of seeing this paydown on credit cards coming at the expense of the strong retail spending that we saw during the summer,” Quinlan said. SOURCE: New York Federal Reserve

House Debt Grows In 3Q

** Change from Q3 2019 to Q3 2020

Bofo Bitcoin


2020 was a $13,891 wild ride for bitcoin value $7,063


Jan 1

Mar 12 Nov 1 Nov 30

Bitcoin A Bit Crazy

What is a bitcoin worth as you read this? $10,000? $100,000? Frankly, neither is likely. But bitcoin had been unpredictable in 2020, starting at $7,063 on Jan. 1, plummeting to $3,596 in March, steadily rising to $13,891 by Nov. 1, then catapulting to a record high of $19,800 by Nov. 30. That record high was set on a Monday following a weekend slide of a few thousand dollars. From the “this time is different” department: Bitcoiners say this will not be a repeat of the 2017 bubble that led to the last high because the cryptocurrency is more generally accepted and being held long-term by investors, especially people like Jack Dorsey, who invested $50 million of Square’s holding in bitcoin.

Government, Companies Soak In Record Debt The Federal Reserve’s cheap money has inspired companies and governments to rack up a record $9.7 trillion of bonds and other debt this year. That includes nearly $5.1 trillion of corporate bonds, as well as some kinds of loans, including riskier leveraged loans, as of Nov. 26, according to Refinitiv. More broadly, the Institute of International Finance 40

InsuranceNewsNet Magazine » January 2021

JPMorgan Fined $250M For Faulty Fiduciary Control

JPMorgan Chase was fined $250 million for weak management and control over its fiduciary duties, a couple of months after agreeing to pay nearly $1 billion for other wrongdoing. JPMorgan was fined by the Office of the Controller because it “maintained a weak management and control framework for its fiduciary activities and had an insuf-

ficient audit program for, and inadequate internal controls over, those activities. … Among other things, the bank had deficient risk management practices and an insufficient framework for avoiding conflicts of interest.”

In September, the bank agreed to pay $920 million and admit misconduct in manipulating precious metals and treasury markets. JPMorgan traders were accused of “spoofing,” which is placing large orders and removing them quickly, thereby not actually buying the asset and creating the illusion of demand. It was the largest fine the Commodity Futures Trading Commission has ever imposed for spoofing.

recently said global debt had risen $15 trillion to $272 trillion in the first nine months of this year, and is set to hit $277 trillion by yearend — a record 365% of world gross domestic product, according to The Wall Street Journal. Corporations borrowed at a record pace when the Fed said it would cut interest rates to zero and buy corporate bonds for the first time.

Esoteric ABS: Learning Curve May Be Worth Possible Yield The market for esoteric asset-backed securities offers compelling opportunities for investors seeking greater yields against more traditional fixed-income securities of similar quality and duration. • By Paul Norris


nsurers are all too familiar with the difficulties of generating portfolio income in this low interest rate environment. Fortunately, there is a fixed-income asset class that may offer greater yields than many types of other similarly rated debt, and it’s within a structure many insurers already know well: the asset-backed security. Although this ABS subset is backed by assets some investors may not be familiar with, the learning curve might be worth the effort. Since mid-March, the “esoteric ABS” asset class has maintained a steady yield advantage over similarly rated debt securities that are staples of insurance portfolios, such as government and corporate bonds. They have also outperformed more traditional ABSs, which are backed by non-mortgage assets such as auto loans, credit cards and receivables. Esoteric ABS collateral, such as commercial jets, shipping containers and consumer loans, may be new to insurers, but the investment process is no different than for traditional ABS. The year 2020 was a volatile one for all asset classes. And while spreads (the difference in yields between a bond and a U.S. Treasury of similar duration) for most fixed-income assets have recovered from their mid-March wides, when pandemic fears overwhelmed investors, esoteric ABS spreads have remained wider. This is likely due to economic conditions as well as investor hesitation. Therein lies the potential opportunity, and one we think many insurers should consider.

reconsider asset-backed securities, the ABS market has seen several structural improvements in the interim. Rating agencies are operating with greater transparency, and securities are offering improved underwriting as well as greater credit enhancements for stronger investor protection. New structures are smaller and simpler, and issuers must now retain a portion of all new deals. This helps to better align their interests with those of investors. ABSs (including esoteric) offer portfolios additional diversification, as they are backed by a variety of assets not found in traditional fixed-income strategies, a high degree of liquidity, a low history of defaults, and a favorable capital-charge profile for insurers. Add in the competitive yields, and ABSs appear to be an asset class that insurers should consider.

Esoteric ABS Spreads Remain Wider As Market Rebounds

Many investors had already become more comfortable with the esoteric ABSs by late 2019, and their tighter spreads were limiting their appeal versus corporates and non-agency mortgages. When the pandemic began in the U.S. in early March, spreads of all types of debt securities quickly widened to levels not seen

ABSs (including esoteric) offer portfolios additional diversification, as they are backed by a variety of assets not found in traditional fixed-income strategies, a high degree of liquidity, a low history of defaults, and a favorable capital-charge profile for insurers.

The ABCs Of ABSs

First, let’s quickly revisit how a structured product like the ABS works. A deal sponsor provides a diversified array of loans/leases (which are generating principal and interest payments) to an investment bank. The investment bank structures the cash flows of these loans/leases into securities of varying levels of risk and offers them to investors. The cash flows backing the securities are expected to fulfill the ABS’s obligations and drive the rating agencies’ grades for the securities. While the financial crisis of 2008-2009 caused many to 42

InsuranceNewsNet Magazine » January 2021

since the financial crisis. As esoteric asset-backed securities are less mainstream, their spreads were wider still; senior airline ABSs reached a sky-high 14%. However, conditions completely reversed within two weeks. On March 23, 2020, the Federal Reserve announced its programs to support broad swaths of debt, and within 48 hours many corporate and traditional ABS security yields were tighter by as much as several hundred basis points. While the Fed programs offered support for corporate and much of ABSs, they didn’t include esoteric asset-backed or non-agency mortgage-backed securities. The general retightening of spreads has esoteric ABS yields back to more palatable — but still wider — levels, presenting opportunities for investors seeking yields over those of similarly rated corporate bonds.


SOURCE: Conning

A Changing Landscape For Collateral

A full understanding of the esoteric ABS also requires an understanding of the evolving market dynamics for the underlying assets. The used-car market offers an example, as it is largely financed by nonprime auto loans. Used-car prices plummeted in early March, but that all changed once the pandemic hit as consumers sought to buy vehicles to move farther from cities and avoid subway systems and ride-hail services. The demand drove used-car prices to all-time highs in July. Hertz, which uses fleet-sale proceeds to pay bondholders, experienced this spike firsthand: it sold 40,000 cars in June at 10% above book value, good for Hertz as well as for subprime loan investors. However, uncertainty still dominates investor thinking and will likely drive yields in the months ahead for esoteric sectors. Conning expects airline lease yields to remain wide until business travel resumes at stronger levels, which may be years away. Railcar yields are also subject to U.S. economic growth,

as many goods are shipped by rail, while shipping containers are reliant on global gross domestic product conditions. Consumer spending remains under pressure as well as unemployment is high, and conditions are cloudy for further government stimulus, the production of vaccines and the patience for social distancing. In the near term, Conning expects to see growing government debt levels and a continuation of lower interest rates, supporting our view that ABSs may help investors find greater yields. Strong investment discipline and experience in evaluating structures and collateral will likely be of even greater value.

Understanding “Esoteric”

Conning’s view is that the market for esoteric ABSs offers compelling opportunities for investors seeking greater yields against more traditional fixed-income securities of similar quality and duration. Spreads remain wider now than before the pandemic, but we believe there are investments that are worth the risk — although we encourage investors to work

with asset managers well experienced in the asset class. The term “esoteric” to some suggests an asset class that is difficult to understand, but our client experience suggests that it is more about their being less familiar with the collateral. Just because securities offer higher yields than similarly rated debt does not necessarily mean they are less safe. They do present different risks, but working with an experienced asset manager should help investors understand what those risks are and weigh the opportunities. Paul Norris is a managing director and head of structured products at Conning. Paul may be contacted at paul.norris@innfeedback.com.

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January 2021 » InsuranceNewsNet Magazine



The Beverage That Boosts Your Brain It’s a drink that evokes a feeling of cozi-

ness on a cold day. But a cup of hot cocoa might do more than warm your hands and your insides. It also could help you complete certain cognitive tasks, researchers at the University of Birmingham found. But not just any cocoa will do. The researchers looked at the effect of a flavanol-enriched drink made with natural cocoa powder versus the more processed alkalized cocoa beverage. In studying the effects of the enriched cocoa on young men, the researchers found those who drank the enriched beverage had higher levels of oxygen in their blood and were quicker at completing complex cognitive tasks. Efficient oxygenation of the brain is key for cognition, the researchers concluded, and a diet rich in flavanols can help give the brain the oxygen it needs. But if cocoa isn’t your cup of tea, you can get flavanols from other foods, including apples, berries and red grapes.


each day, according to the new recommendations. The activities should be mostly aerobic, such as jogging or biking.

The World Health Organization wants you to exercise. But how much t i me WHY YOU’RE ALWAYS should you spend TIRED moving your body? Blame it on winter or blame it Adults need 150 minutes The WHO issued on the post-holiday blahs. But of exercise each week. new guidelines recfatigue is a lot more than just Children need 60 minutes ommending that feeling tired. It’s an ongoing of exercise each day. adults get at least condition marked by a lack of SOURCE: World Health Organization 150 minutes — two energy and motivation, sleep and one-half hours difficulty, and feeling anxious. — of moderate to vigorous physical So what causes fatigue? activity each week. The American Academy of The WHO previously recommended Sleep Medicine that adults ages 18 to 64 do either at says fatigue least 150 minutes of moderate exercise can be caused or a minimum of 75 minutes of vigor- by anything ous exercise each week, and those pre- from lifestyle vious recommendations were made for factors to unhealthy adults. The new recommenda- derlying meditions now include people living with cal conditions. chronic conditions or a disability. Inf lammation Children up to 17 need at least 60 min- also can play utes of moderate-to-vigorous exercise a role, which DID YOU




QUOTABLE Being physically active is critical for health and well-being — it can help add years to life and life to years. — WHO Director-General Dr. Tedros Adhanom Ghebreyesus

is why fatigue is a common symptom of many illnesses. Lack of sleep and a sedentary lifestyle are two of the most common nonmedical causes of fatigue. Consuming a lot of sugar and caffeine also can contribute to it. Other lifestyle factors leading to fatigue may be weight, stress and regular use of alcohol.


Open a book — it’s good for your health. That’s the word from researchers who say a daily reading habit can boost your health in a number of ways. Reading strengthens connections in your brain, creBook readers showed a 20% reduction in morating neurons that tality risk over 12 years send messages and compared with those who transmit infordid not read books. mation between SOURCE: National Institutes of Health different areas in the brain. Reading also prevents age-related cognitive decline and lowers the risk of dementia. A half-hour of reading can reduce stress levels. Although reading may not cause you to live longer on its own, reading might be associated with an overall healthy lifestyle and a lower risk of early death.

The American Medical Association declared racism a public health threat.

InsuranceNewsNet Magazine » January 2021

Source: AMA


Get Off The Shame Cycle And Back On Your Resolutions How are those New Year’s resolutions going? If they are already a distant memory, here is how to restart.


By Steven A. Morelli

an. 1 might be resolution day, but Jan. 15 is quitters’ day. The second Friday of January is typically when we fall off whatever wagon we were on, leaving us content to wallow in the dust and watch the wagon roll on without us. At least that is according to data gathered by Strava, a fitness app. That could be “good news” to many of us because we used to have a vague notion that 80% of New Year’s resolutions are abandoned by the second week of February. This “fact” is referred to widely, but just try to find the source. It apparently was a study decades ago by a researcher at the University of Minnesota. That study was likely survey-based, and people do what people do: lie about their failures. But cold, hard data from more than 800 million user-logged activities in Strava reveal that we fail far sooner. (Look, it was a tough 2020, we’ll 46

take our good news where we can find it.) So, are we really failing our resolutions, or are our resolutions failing us?

What Are Resolutions?

Why do so many of us do this to ourselves every year? We are continuing our process of promises made and (not) kept. More than 4,000 years ago, Babylonians promised the gods on New Year’s that they would pay their debts and be generally virtuous. Now we make promises to ourselves. In either case, it is easy to break those promises. Those failures start a shame cycle that tends to keep a body on the couch. When we make resolutions, we are looking for control and redemption,

according to Dennis Buttimer of Piedmont Healthcare in Georgia. “I think most people want a second chance to improve the quality of their lives,” Buttimer wrote. “The New Year offers a blank slate — an opportunity to get things right. When we set New Year’s resolutions, we are utilizing a very important concept called self-efficacy, which means that by virtue of aspiring to a goal and following through on it, I have a sense of control over what’s happening in my life.” Shame is what holds us back. This is especially true for people reared by hypercritical, belittling parents. Self-efficacy is the mechanism to regain our control. It is all about the perception of the self.

40% of the population makes resolutions. 71% of people who were successful had slipped in the first month. 19% kept to their goal for two years. —The Bronfenbrenner Center for Translational Research, Cornell University

InsuranceNewsNet Magazine » January 2021

GET OFF THE SHAME CYCLE AND BACK ON YOUR RESOLUTIONS INBALANCE Does this sound familiar? “I am just not How Do We Keep Our Resolutions? down further, and think about one or two the kind of person who gets up and exer- With the right frame of mind, the body is pounds this week. cises in the morning.” Or “I always quit a more likely to follow. Here are some next The sub-goals are important at the month after I start a workout program.” steps. beginning of any venture, according to Or “Do I still have some Oreos left in the research from Szu-chi Huang, associkitchen?” State The Goal And The Why ate professor of marketing at Stanford It is almost a relief when we fail in these Just like in sales, it helps to know the value Graduate School of Business. cases, because we revert to our comfy sta- of the activity if you are going to buy it. If “When you are just starting a pursuit, tus quo. We get a dopamine rush when the goal is to lose weight, what is the value feeling reassured that it’s actually doable we start a new thing. Then we get another of doing it? Maybe the benefit is to fit into is important, and achieving a sub-goal inone when we return to the comfortable a bathing suit that used to fit. The value is creases that sense of attainability,” Huang thing. “Just Do It” just does not do it in we like the way our significant other sees said, adding that the long view is importthe long run. us in that suit or those trunks. Think about ant later. “At that point, to avoid coasting Here is how we can get off the shame that day when whatever it is will fit and we and becoming distracted, you need to focycle and grab the levers of self-efficacy, step out to the beach, poolside or wherever. cus on that final goal to see value in your according to Manfred F.R. Kets de Vries, That helps when you are hitting the tread- actions.” psychoanalyst and management scholar. mill in week five of your program. If it is the financial example, focus on What’s the name of the the couple hundred dollars saved per shame? What is it that causpay period or per commission — not The most important factor es us to bury our face in our the $2,000 that you want to spend on in predicting success was hands? Is it gaining back five of vacation. the seven pounds that we lost? self-efficacy — the belief in one’s It helps us to understand where Back Up ability to get the job done. That likely Get this came from. It might have This is where the magic is. The only been a parent or a sibling that means that you have spent some time way we fail is when we say we fail. If loved to point out how we were thinking about and planning how to we fall off the wagon, get on the next fat or unsightly. one the following day. achieve your resolution, and also “Being able to discover the When we were toddlers learning to origins of shame-like experienc- whether your resolution is realistic.” walk, our parents did not give up on us es will set the stage of having — The Bronfenbrenner Center for Translational when we fell down. They assumed we greater control over your life Research, Cornell University would walk some day and stuck with as you become attuned to what it. So if we assume we will achieve our triggers these shame reactions,” Kets Also, align your goals and your envi- goal, it’s just a matter of when, not if. de Vries wrote in the Harvard Business ronment. If your fitness plan depends on If we find ourselves wallowing in the Review. your getting in the car and driving to a dust, go back to steps one and two. What The next step is to shut that person gym several miles away, it might be bet- are we saying to ourselves? What would a right the heck up. ter to realign the plan. Maybe a pushup friend say to us? Then start again. Why listen to that jerk? When that routine followed by running up and down There is a reason that Alcoholics voice tells you that you are just a failure, the stairs for 10 minutes in the morning Anonymous’ credo is one day at a time. treat it as you would any other jerk. That is perhaps more achievable goal to attain Thinking about a lifetime of maintaining thought is not about you, but about some- and build on. sobriety is overwhelming, but we can abthing that someone else conditioned in you. If the goal is to be more mindful of stain today and not worry about abstain“When you’re feeling shame, ask your- spending, imagine whatever it is you want ing tomorrow. self: Would I talk to a friend the way I’m from that. Is it to pay for a vacation out We can always remember that today, talking to myself right now?” Kets de of short-term savings rather than run up not Jan. 1, is resolution day. Every day Vries asked. a credit card bill? When you make that can end better than it started. And just What about reframing that narra- short-term sacrifice, imagine the place maybe, 2021 will end at least a little better tive? Talk to yourself as if you were en- you are planning to go. That is a happy hit than it started. couraging a friend. Remember the goals of dopamine. Happy New Day. you have achieved, and get back at it. Steven A. Morelli is “Engaging in these corrective emo- Break It Down editor-in-chief for tional experiences can help you improve To make the journey, start walking. If you I nsura n ce N ews N et . your sense of self-esteem, increase your plan to lose 50 pounds, don’t think about He has more than 25 feelings of worthiness and belonging, losing 50 pounds. Think about five pounds years of experience as a and editor for foster greater self-acceptance, and reduce this month. A responsible weight loss is reporter newspapers and magazines. He was also vice unhealthy reactions to shame, such as one to two pounds a week, according to president of communications for an insurance withdrawal and counterattack,” Kets de the Centers for Disease Control. So, five agents’ association. Steve can be reached at Vries wrote. pounds a month is the low end. Break it smorelli@innfeedback.com. January 2021 » InsuranceNewsNet Magazine



What One Advisor Learned From The Pandemic Every client had their own challenges and opportunities from COVID-19, yet the pandemic taught advisors lessons that can help them empower all their clients in planning for what’s next. By Osmar Garcia


hen COVID-19 hit, so many Americans were faced with unexpected personal and financial challenges. Business owners, retirees, newlyweds — to name a few — were confronting serious questions regarding their short- and long-term financial goals: Will I be able to retire as planned? What will this mean for my employees? Is this still the right time to purchase a home? 48

As all of us work to navigate the pandemic’s financial implications, the advisor-client relationship has become an increasingly critical partnership. And, while every client brings their own challenges and opportunities to the table, there are several pandemic takeaways that transcend personal financial situation for advisors to keep in mind to empower clients in planning for what’s next.

for right now. According to a recent Northwestern Mutual Planning and Progress Study, 20% of Americans say they have revisited their financial plans and made significant adjustments in response to the pandemic. Given market uncertainty and questions of job security throughout this year, important questions for clients to consider when making adjustments have included:

Adaptability Is Key

» What options do I have for quickly

If there’s anything that 2020 taught each of us, it is the importance of being adaptable to life’s unexpected challenges. However, the “right” way to adapt during this time has undoubtedly looked different for everyone. For so many, the pandemic shifted previously established financial plans and priorities. Many people went from planning for the future to planning

InsuranceNewsNet Magazine » January 2021

accessing cash?

» How can I protect my income during these uncertain times?

» What types of loans and financing am I eligible for?

» Looking ahead, how can I financially prepare for what’s next?

WHAT ONE ADVISOR LEARNED FROM THE PANDEMIC BUSINESS Advice in action: These questions guided a conversation on adaptation with a long-term client of mine, Melvin Gonzalez. The owner of a painting business and a portfolio of rental properties, Melvin lost $110,000 worth of business in two weeks when COVID-19 first hit. He was facing the very real concerns of how to support both his employees and his family. Our first step was to take a look at his assets, which included enough savings to keep his businesses running for six months and significant cash value in his life insurance to tap for additional funds. These foundational conversations helped to set the tone for making future decisions.

Stay Up To Date And In The Know

Clients often look to advisors for realtime, personalized planning, tools and advice to help them regain control over their financial futures — and this has been especially true during the pandemic. Especially in the early part of 2020, there was a great deal of consumer anxiety fueled by the uncertainty of the economy, which resulted in an overwhelming amount of recommendations on how to financially prepare. With so much (sometimes conflicting) advice, it has been challenging for clients to stay current with the decisions and programs available for support. The market fluctuations and governmental measures precipitated by the pandemic have only heightened the importance of staying up to date on the most current information to aid in client decision-making. Even beyond this, it’s crucial to have the ability to interpret this information for clients, delivering it in a tangible way that makes sense. We can be the bridge between the information and the individual, which can make all the difference in the world. Advice in action: With Melvin, we worked together to apply for and receive funding through the Paycheck Protection Program. I also encouraged him to reach out to his bank and ask about the ability to defer mortgage payments if his renters were unable to pay. With the variety of options available, it was important to sit down, explain and

The Forecast: Anxiety With A Chance Of Optimism 84% of U.S. adults aged 18+ expect the COVID-19 pandemic and subsequent economic downturn will have an impact on their ability to achieve long-term financial security. Six in 10 (59%) say that impact will be moderate or high. At the same time, confidence in a robust recovery — both personally and for the country — is strong.

83 76 79

% of Americans believe they will ultimately achieve long-term financial security. Among them, 44% say it will be in a year or less and 32% say between two to five years.

% are confident the country will return to full employment. Among them, 47% say it will be in a year or less and 39% say between two and five years. % are confident the country will return to economic growth. Among them, 47% say it will be in a year or less and 38% say between two and five years.

SOURCE: Northwestern Mutual Planning and Progress Study 2020

work with him to determine the best next steps for moving forward.

Build On Trust And Teamwork

Beyond the challenges, the pandemic also has served as a reinforcement of many life lessons, including the importance of collaboration — whether at work, home or in our communities. Teamwork has been an essential aspect of moving forward during this time. Working with clients on their finances — something that touches nearly every aspect of their lives — creates a natural partnership. It’s important to lean into this to continue building a stronger connection. Our business is truly about building relationships and earning trust. This teamwork mentality is especially crucial during times of uncertainty. Making good financial decisions requires knowledge and thoughtful consideration. However, it’s human nature to make decisions that are often dictated more by emotions than rational thought. As advisors, we can help our clients objectively weigh the risks and rewards of financial decisions for clients, guiding them through the process of determining what makes the most sense for them. Advice in action: Supporting Melvin throughout his challenges was made more natural by the strong foundation

of friendship we’ve built through our partnership over the past five years. During this time, I’ve grown to better understand his personal goals, motivations and dreams for the future. The decisions we made together in response to the pandemic aimed to keep all of these on track. The past year was a time to start making choices, plan and take control of our financial futures. Although everyone’s experiences during the pandemic have been unique, we’re all in a similar position of asking, what’s next? As advisors, we are here to guide our clients through these difficult times. By providing them with both a partner and a plan, we will enable their recovery and empower them to make the choices that will help protect their dreams. Osmar Garcia is a financial advisor with Garcia Wealth Management, an affiliate of Northwestern Mutual, Conway, Ark. Osmar may be contacted at osmar.garcia @innfeedback.com.

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January 2021 » InsuranceNewsNet Magazine



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

Moving From Negative To Positive Insecurity Understand the cause of negative thinking and how it limits your potential. By Meagan S. Balaneski


ebts in emotional balances, just like debts in financial balances, have compound interest. Your reactions to adverse events set a precedent for how you handle future incidents. Over time, the thought pattern becomes stronger —you’re more likely to take offense and hold a grudge. You may even begin to ward off a perceived attack before an offense even occurs, which closes you off from positive growth. By understanding the cause of negative thinking and how it limits your potential, advisors can switch mindsets and flourish as professionals.

Suffering Is Caused By Attachment

Your life is in a constant state of flux, and it’s natural that loss, growth and change are inevitable. You’ll never be the same person you were a moment ago. But still, you attach yourself to the idea of your current self, and when that self is threatened with change and uncertainty, you suffer — even if you’re still landing in a better position than when you started. Attachment to concepts that aren’t real, such as money or power or image, causes you to suffer, and that suffering causes you to react negatively. And when you’re consumed with negative thinking, you’re distracted. You become so distracted trying to limit your suffering in the short term that you open yourself up to actions that are self-defeating and prevent a healthy, robust, long-term ethical business.

Professional Suffering

Imagine a client posts a message on social media about experiencing poor service. The post upsets you due to an attachment — the desire to have or not have something. What could you be attached to that 50

is causing you to suffer? I’m attached to the idea of my integrity. I’m scared that people will believe this client and that they’ll think I have no integrity — and that’s a really uncomfortable thought for me. How about your reputation? You’ve gone out of your way to have an ethical, professional business and to maintain a competent professional image. Now your reputation could be in danger. What about honesty and the idea of truth? You’ve been raised to never tell a lie, and you’re attached to truth as a fundamental value that we should all hold. And so you suffer to even think that, for others, it can be so carelessly and publicly discarded. You can become attached to all of these concepts, either with the desire to have them or the desire not to have them. And you can feel that attachment strongly, but none of these ideas is real. They’re all just a relative state measured against some previous moment, which is not the same as the moment that you’re in right now.

Switching To A Positive Mindset

Negative thinking does not motivate you to work harder. Instead, it causes you to become dutiful in your behavior, going through the motions without a clear purpose. Instead of using negative insecurity and the threat of future loss to change the behavior of somebody else — clients, for example — you can use positive insecurity and the promise of a future gain to show them who they can be, operating with an aspirational mindset.

Success, Empathy And Compassion

To make this shift, you must define success, develop empathy and grow into compassion. Every advisor will define success differently. For me, it’s someone who is composed. Others may think of qualities like caring, giver, calm, relaxed. Thinking about this definition makes you want to pursue success. It’s motivating, and that’s positive insecurity. With positive insecurity, you are no

InsuranceNewsNet Magazine » January 2021

longer distracted by attachment and your own suffering. Without distractions, you can live in each moment. With clients, this means you can hear what they say. Clients want to be helped by your professional advice, but they also want to be heard. When you can shift to this perspective, you are becoming empathetic. The next step is to move from empathy to compassion. Compassion relies on what you can do for others and depends on authenticity. When you work with compassion, clients want to come to you because of you — they are lifted up by just being around you. Being authentic means having a passion to help the clients you work with. Consider the following example, which demonstrates different motivations. When you’re not authentic, you use negative insecurity with clients and focus on trying to make them see the value in your services. You get caught up in an attachment to the perfect plan that you want them to implement. Instead, being authentic in client meetings involves releasing the transactional mindset and accepting that the pathway is the client’s choice, then framing your recommendations to fit their preferences.

Living Up To Your Potential

By cultivating a positive mindset, you can improve your business without changing any processes or products. Advisors who understand the causes and dangers of negative thinking can take steps toward becoming aspirational, inspiring clients to do the same to live up to their financial potential. Meagan S. Balaneski, CFP, RRP, CLU, CIM, is a life insurance agent and designated representative with Advantage Insurance & Investment Advisors. She has been a qualifying member of MDRT since 2012 and has run her own financial planning firm since the age of 25. Meagan may be contacted at meagan.balaneski@innfeedback.com.


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.

The COVID-19 Pandemic Has Upended The LTCi Market The pandemic has highlighted health concerns and is a special challenge for those who need long-term care services. By Ayo Mseka


AIFA’s 2020 Impact Week: Long-Term Care Conference was a treasure trove of information for financial professionals looking to enhance their knowledge of the limited and extended care planning and long-term care insurance markets. The online event was presented by NAIFA’s LECP Center, which gives agents and advisors the opportunity to network with service providers and gain information they can use to address the changing needs of the market. The event attracted hundreds of financial professionals and featured numerous experts representing the top organizations in the industry.

Virtual Worksite Enrollment

From one of these experts, Denise Gott, participants learned how to significantly improve the process of virtual worksite enrollment. Gott is the CEO of ACSIA Partners, a distributor of LTCi and related insurance products and services. COVID-19 has highlighted health concerns and has proven to be a special challenge for people needing LTC services, Gott said. The pandemic has also underscored the need to plan for the future and the need for LTC products and services as many older Americans choose to stay in their homes as long as possible. This choice is putting a burden on many caregivers, who have to take time off from work to care for them.

Trends Driving The LTC Planning Market

From another expert, Matt Hamann, attendees learned about more trends that are driving the LTC planning market. Hamann is sales director and vice president of institutional, worksite multilife and brokerage at Transamerica. Here is a rundown of some of those trends.

» There is growth in voluntary benefits in

the workplace, including LTC solutions. The number of employers offering LTCi benefits has grown by 10% since 2017.

» Millennials and Generation Z occupy a larger portion of the marketplace.

» Millennials and other clients are driving the growth of digital engagement. They want online options for learning about LTC options and making planning decisions.

Conference attendees gained additional insights about the LECP/LTC/LTCi industry from a panel consisting of Ryan Bivins, national sales manager, longterm care, Pacific Life; Tracey Edgar, vice president of sales, care solutions,





OneAmerica; Brandon Heskett, national sales vice president, SecureCare, Securian Financial; and Tony Massenelli, director of long-term care sales, Nationwide. The panel discussion was moderated by Steve Cain, sales and business development leader, LTCI Partners. These executives shared some of the trends that are shaping the LTCi industry.

» Heightened customer awareness of the need for planning and for LTCi protection.

» Increase in hybrid life and LTCi products.

» Record low interest rates, prompting carriers to reprice new plans.

» Growing interest in group LTCi. » Rate stability on new traditional LTCi coverage.

To grow their business, financial professionals can increase client education, talk more about LTC and LTCi to their prospects and clients, and make sure they are having the right conversations with them. The panelists predicted that in 2021, there will be more growth in the number of LTCi products, partly because of the growing number of flexible products being launched and also because of the uncertainty created by COVID-19. NAIFA has created the Life and Annuity Certified Professional certification for advisors. Companies that have approved this certification include State Farm, New York Life, Guardian, Country Financial, SagePoint, Woodbury Financial, Royal Alliance, FSC Securities and Cambridge Investment Research. Ayo Mseka is editor of NAIFA’s Advisor Today magazine. She may be contacted at ayo.mseka@innfeedback.com.

January 2021 » InsuranceNewsNet Magazine


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


Americans More Confident In Life Insurance Since COVID-19 The pandemic has made consumers more aware of the need for life insurance and more aware of the role of the advisor in the purchase process. By Jennifer Douglas


s the pandemic continues to spread across the globe, Americans remain concerned about their financial situation and the economy, while at the same time expressing confidence in insurance companies and financial professionals. Since 2008, LIMRA has asked consumers for their opinion about the U.S. economy. In March, May, July and October of 2020, LIMRA expanded this research to include the personal and financial impacts of COVID-19. In our October study, consumers expressed increased sensitivity to the need for life insurance as a result of the pandemic. In addition, a record number of Americans (35%) said they have “extreme” or “quite a bit” of confidence in insurance companies. Confidence in financial professionals — insurance agents/brokers and financial advisors — was shown by 37% of those surveyed, and that’s the highest percentage we’ve seen since LIMRA started tracking this metric in 2008. If there is any benefit to the pandemic, it has made more people aware of the need for life insurance. We are hopeful they will follow through and get the coverage they need to protect their families. The reality is — even before the pandemic — not enough people had the life insurance coverage they needed. Nearly half of Americans (46%) are uninsured, and many more (33%) say they are underinsured, according to LIMRA’s 2020 Insurance Barometer Study. This is troublesome because we know people are living paycheck to paycheck. According to our research, one in four 52

American households have less than three months of emergency savings, and one in three Americans say their families would face financial hardship within a month if the primary wage earner died. On the positive side, LIMRA research shows consumers are more aware of their need for life insurance.

» Nearly three in five consumers express a heightened need for life insurance. » Half of employees view life insurance offered at work as more valuable to them now as compared with before the pandemic, and two-thirds say they are paying more attention to the benefits their employer offers and the coverages provided. » 29% of consumers say they are more likely to buy life insurance in the next 12 months because of COVID-19. This represents roughly 75 million Americans. » The number of individual life insurance policies sold increased in July (12%), August (8%) and September (13%) 2020 compared with the same months in 2019. Like most industries, social distancing measures have created challenges for the life insurance industry. The most common way people want to buy life insurance is by working with an agent or advisor. The way agents and advisors engage with their clients and prospects had to change due to social distancing. LIMRA finds that the role of financial professionals in the sale of life insurance products has not diminished and that “in person” really means “with a person’s help.” LIMRA and Boston Consulting Group recently collaborated to survey Americans who shopped for life insurance during the

InsuranceNewsNet Magazine » January 2021

pandemic. For most of these shoppers, a conversation with a financial professional was still central to the life insurance purchase process. In fact, since the pandemic began, a big part of the value that insurers are gaining from technology has come from the “assist” it is giving to financial professionals. Our research shows 84% of agents and advisors changed the way they communicate with their clients to comply with social distancing recommendations. Prior LIMRA research indicates that advisors had already begun to leverage tools such as videoconference calls, email and other digital tools to stay in touch with their clients. These tools are invaluable at a time when face-to-face meetings are not an option. From the life insurance company perspective, we know that carriers have taken steps to make it easier for all consumers to apply for a policy during the COVID-19 pandemic. More than a quarter of U.S. life insurers have expanded their automated underwriting practices and postponed or waived paramedical requirements. Because of social distancing measures, some life insurers also are accepting electronic health records, and are allowing historical exam and lab data in place of an exam. Our research shows the pandemic accelerated adoption of automated underwriting. The pandemic has provided Americans with a greater understanding of how important life insurance is. Those with life insurance will have peace of mind knowing that their loved ones will be taken care of financially should they get sick and die. Jennifer Douglas is part of a team responsible for implementing and managing processes to ensure the quality of LIMRA’s research program. She may be contacted at jennifer.douglas@ innfeedback.com.

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