InsuranceNewsNet Magazine | May 2023

Page 1

The AI revolution_

The spotlight is on ChatGPT as AI seeks to reshape the world.


PLUS: Mary Schmid: Build trust and success through meaningful conversations


5 exit strategy questions to ask small-business owners


The Federal Insurance Office’s search for its longterm regulation role


THIS ISSUE: THE VIRTUAL ADVISOR Life Insurance • Health/Benefits Annuities • Financial Services MAY 2023

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32 Explaining the nuances of annuities to clients


22 Standing in the gap


6 Winning with words

Clients may be impressed with an advisor’s knowledge, but what they really want is an advisor who listens to them and cares about them. Mary Schmid, author of Make or Break Conversations, teaches the guiding principles for communicating in ways that matter.


Thought Leadership Month

How advisors are gaining traction with social selling & online selling. P18

28 5 questions to ask small-business owners about their exit strategies

How key person life insurance figures into one of business owners’ biggest decisions.

Little things mean a lot when matching the right annuity to your client’s needs.


36 Help employers provide clients with benefits they actually want

In the past few years, the labor force has been significantly bolder about their wants and needs at work.


40 Help clients achieve financial balance through all life stages

Create a backdrop for clients to make educated decisions at any age.


42 How to love your practice — and how to make it love you back

Financial services is the hardest career in the world, and that is why you should love it, an author and coach said.


44 Stuck in the middle

A summary of the issues surrounding state insurance commissioners.







Shawn McMillion

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Norman’s passion for
organizing inspired her to help found an association of Black insurance agents.
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AI revolution
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6 May 2023 » InsuranceNewsNet Magazine 1

Can AI help you grow your business?

Over the past couple of months, ChatGPT has been the hot topic. Artificial intelligence has been making its way into the insurance business for years. How, might you ask? Well, I asked OpenAI’s ChatGPT this question. Its response follows.


AI is becoming an increasingly important technology in the insurance industry. Here are some ways in which AI is being used.

1. Risk assessment and underwriting: AI algorithms can analyze large volumes of data to assess risk and determine the appropriate level of coverage for a given policyholder. This can include data from public sources, such as weather patterns or crime statistics, as well as data provided by the policyholder, such as medical history or driving record.

2. Claims processing: AI can help insurers automate the claims process, which can reduce costs and improve efficiency. For example, AI algorithms can analyze images of damage to a vehicle or property to determine the extent of the damage and estimate repair costs.

3. Fraud detection: AI can help insurers detect fraudulent claims by analyzing patterns in data and identifying inconsistencies. This can help reduce losses due to fraud and improve the overall accuracy of the claims process.

4. Customer service: AI-powered chatbots and virtual assistants can help insurers provide personalized service to policyholders, answering questions and providing information about policies and coverage options.

5. Predictive analytics: AI can help insurers analyze data to identify patterns and make predictions about future events. For example, AI algorithms can analyze

weather patterns to predict the likelihood of natural disasters or analyze driving patterns to predict the likelihood of accidents.

Overall, AI is helping insurers improve efficiency, reduce costs and provide better service to policyholders. As the technology continues to evolve, we can expect to see even more innovative uses of AI in the insurance industry.

Not too shabby. So I guess you could say that AI has become part of the foundation of the insurance business. What it can accomplish all sounds pretty lofty, though, and it’s the kind of back-end, under-the-hood processing that has little day-to-day meaning for the average agent or small agency.

The answer that it gave me about AI’s role in insurance provides a big clue, though, as to how it already has become an integrated tool for many small agencies and practices. Its major use — so far — appears to be marketing. ChatGPT and its competitors can be very helpful with many daily marketing and social media tasks, including topic ideas for your editorial calendar, content briefs and outlines for those articles, FAQs, email copy (including subject lines) and personalization, social media captions, help with search engine optimization — and more. What’s a bit dicier, though, is whether these tools can write authoritative and expert content.

For one thing, the data these AI monsters draw from is vast but not unlimited. ChatGPT, for example, does not include the most recent data and content on the internet; its knowledge base ends in 2021. And while it can pull together relatively general information, like the summary of AI’s role in the insurance industry, it can struggle mightily with nuance and complex information that requires expert knowledge — which includes a lot of insurance and financial services information.

In this month’s issue, we talk to many

in the industry who are using AI, often to their benefit.

Nearly all those we spoke to, though, warned that AI does make mistakes, often including incorrect information — sometimes making things up entirely — and missing key nuances. And even the more mundane uses of AI require oversight, fact-checking and careful review.

What is clear, though, is that we are still at the beginning of this path, and without a doubt, AI will quickly and continuously improve.

One person we interviewed said that he couldn’t ignore AI for his business because not using it would mean his competitors were apt to get a leg up on him. As true as that may be today, it’s for sure going to be even more the case tomorrow. If you don’t embrace AI, it may well leave you behind.

Welcome to Finseca

As part of our continuing effort to expand the number of professional associations providing useful information and discussion for our readers, we welcome Finseca this month to the pages of our magazine. Their first article, found on page 46 , “SECURE 2.0 provides new opportunities for advisors,” explains that while clients of all ages can benefit from the provisions of the bill, they require the help of advisors to fully take advantage of its benefits. Finseca represents, serves and advocates for the financial security profession. Its members provide life insurance and retirement planning solutions. Welcome to Finseca!

2 InsuranceNewsNet Magazine » May 2023 WELCOME LETTER FROM THE EDITOR
Enhance your client’s financial future today! Call 1-888-501-4043 or visit for more information or to run an illustration. AMERICAN NATIONAL INSURANCE COMPANY 888-501-4043 | IMG23112 | INN 05.2023 The Newsweek Logo itself is the intellectual property of Newsweek and all other rights are reserved. 1) No change in California. CA producers will continue to use the current product (IUL19) until otherwise communicated. Expert App and illustrations will reflect correctly by state. 2) The interest bonus will never be less than the minimum guarantee. Policy Form Series: IUL23; IBR23 (Forms may vary by state). American National Insurance Company, Galveston, Texas. For Agent Use Only; Not for Distribution or Use with Consumers. Newly Enhanced Features: • Increased income • New 25 bps Interest Bonus added to all interest crediting strategies2 • CVAT now available • No-Lapse and Surrender Charge periods extended from 10 to 15 years • Targets increasing 20% ENHANCED PERFORMANCE Now better than ever, our enhanced Signature Performance IUL 1 can help secure your client’s financial future. from American National Insurance Company

What’s in the news on

Read about what one state’s leadership is doing to address its property insurance crisis, why Medicare Advantage plans’ profitability is attracting Washington’s attention and how a major overhaul of life insurance illustration regulation is coming in the future.

Louisiana insurance crisis sparks ‘most ambitious’ reform package to date

The incentive program works like this: Insurers that agree to do business in the state are eligible for matching grants of between $2 million and $10 million. Approved insurers must then match that amount and write $2 in premium for every dollar accepted. The ultimate goal is to transition policyholders from Citizens back to private insurers, Donelon has said.

Donelon provided an update on the status of the incentive program. Eight insurers have been approved to receive $42 million, Donelon said, resulting in nearly $170 million in new premium written.

“I anticipate that we will see 40,000 policies come out of Citizens by the end of the program’s first year and 50,000 additional new policies written during that time,” the commissioner added.

Insurance crisis

Louisiana Insurance Commissioner Jim Donelon calls the next phase of plans to stabilize the state’s homeowner insurance market “the most ambitious reform we’ve attempted to achieve in my 17 years as insurance commissioner.”

Notably, the package of property insurance reform gives lawmakers a second stab at the Louisiana Fortify Homes Program, which fortifies roofs against high hurricane and tropical storm winds. The Legislature declined to fund the program last year.

Donelon, who is not running for reelection, is putting a full-court press on legislators to find the money this time. The program would provide grants of up to

$10,000 for homeowners to retrofit their roofs to standards set by the Insurance Institute for Business and Home Safety.

The initial budget request is for $20 million, said state Rep. Mike Huval, chairman of the House Insurance Committee.

“One thing that we cannot pass a law against in our state is to keep hurricanes from coming. They’re coming,” Huval said. “I believe this program will help a lot of folks resist storm damage in the near future while potentially reducing residential property insurance costs to our state in the longer term.”

Donelon successfully steered the first phase of his plan to lure insurers back to Louisiana — via financial incentives — through the legislature earlier this year.

Louisiana is wracked by an insurance crisis that much resembles the crisis that followed Hurricane Katrina and Hurricane Rita in 2005: Insurers are leaving the state rather than risk huge losses that accompany major storm and hurricane events.

So far, 11 insurers have gone broke and another dozen or more stopped selling policies, leaving desperate homeowners to rely on the state-run insurer of last resort, Louisiana Citizens Property Insurance Corp. As the insurer of last resort, Citizens is required by law to charge 10% higher than the highest private insurer in each parish.

Read the full story online:

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at Follow him on Twitter @INNJohnH.

4 InsuranceNewsNet Magazine » May 2023
[Editor’s Note: These are some of the major stories to which we are devoting ongoing coverage at]

Medicare Advantage shows large profit advantage that new CMS rules look to cut

Medicare Advantage plans have a significant advantage over other health insurance — profit.

MA carriers have reported profit margins more than double that of insurers in the individual/non-group, the fully insured group/employer and the Medicaid managed care markets, according to an examination by the Kaiser Family Foundation.

The study examined profit margins of carriers in 2021 (the latest full year available) and found the pandemic suppressed the gross margin per enrollee over the previous year, but MA carriers still maintained a healthy margin over the other markets.

The year was a rough one, but MA plans regained profitability by the end of the year to pre-pandemic levels while other markets floundered.

“Medicare Advantage plans have both higher average costs and higher premiums (largely paid by the federal government), because Medicare covers an older, sicker population,” according to the

report. “So, while Medicare Advantage insurers spend a similar share of their premiums on benefits as other insurers in other markets, the gross margins — which include profits and administrative costs — of Medicare Advantage plans tend to be higher.”

The profit margin has been wide enough for carriers to be worried about their medical loss ratios. If the carriers’ medical costs fall below 85% of premium income, they risk penalties, including termination from the program.

“To avoid such a risk, some Medicare Advantage insurers with loss ratios below 85% may take this opportunity to offer new or more generous extra benefits, such as over-the-counter allowances, meals following hospital stays or transportation, in addition to gym memberships and dental, vision and hearing benefits that are offered nearly universally to help retain and attract new enrollees,” according to the report.

MA is popular and becoming more so,

Life insurance illustration rules on the clock as full rework looms

with enrollment expected to exceed 50% of all enrollees this year, with two carriers leading the way, UnitedHealth Group and Humana.

Read the full story online:

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents association. Steve can be reached at

Patrizio, regional vice president for Symetra, and Ryan Mattern, advanced planning specialist for Modern Life, a tech-enabled life insurance brokerage.

“There’s been a lot of changes to IUL and how they illustrate,” Rohtstein said.

AG 49-B is here

In the short term, IUL sellers need to be concerned with Actuarial Guideline 49-B, recently adopted by the NAIC. AG 49-B changes are set to take effect on May 1.

Updated guidance for indexed universal life illustrations takes effect May 1, but a major overhaul of life insurance illustration regulation is coming, a Symetra executive said.

But it won’t be too long before the National Association of Insurance Commissioners reopens the overall life insurance illustration regulation, added

Gregory Rohtstein, assistant vice president, life product management at Symetra.

Both the short- and long-term illustration rule efforts are big variables when it comes to sales. The National Association of Insurance and Financial Advisors hosted a webinar diving into the latest news on illustration rules.

Rohtstein was accompanied by Steven

AG 49-B states that no index account can be illustrated above the benchmark index account and the new maximum illustrated rate must be inclusive of any bonuses, Rohtstein explained.

Read the full story online:

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at Follow him on Twitter @INNJohnH.



Mary Schmid helps advisors build trust and success through meaningful conversations AN INTERVIEW WITH PAUL FELDMAN, PUBLISHER


Most people who hire financial professionals want those professionals to provide them with something more than market knowledge, information and advice. What clients want most is to know that their advisor listens and that they care. That is the word from Mary Schmid, author, consultant and speaker.

She believes the most powerful way to build trust is through more powerful conversations. In her book, Make or Break Conversations: How Smart Financial Professionals Land New Clients and Keep Them For Life, Schmid teaches the seven guiding principles for having meaningful conversations that matter with prospects and clients.

In this interview with Publisher Paul Feldman, Schmid says that when you have the skills to masterfully lead a makeor-break conversation, you gain a powerful competitive advantage.

Paul Feldman: Tell us a little bit about yourself.

Mary Schmid: My story is quite simple. For 30 years, I was a health care executive working with doctors and surgeons, and sometimes we would get along, and sometimes we wouldn’t. I couldn’t figure that out. Some people were easy to talk to, while some people were absolutely impossible. I went to my CEO and asked, “What am I doing wrong?” And he said, “Well, nothing. Just keep talking. People eventually will get on the wagon.” Well, I thought that there’s more to it than that and wondered, “What is it that makes a good conversation?” I’m a research nerd at heart. So I looked and looked. Finally, I discovered the work of my mentor, Judith Glaser, who I studied with for three years.

Judith wrote the book Conversational Intelligence: How Great Leaders Build Trust and Get Extraordinary Results. I discovered that there’s much more to a conversation than meets the eye. There’s a whole lot of brain activity that goes on that influences not only what we say but how we impact people with the words that we use and the way we express ourselves. So I began doing the work, and my clients were getting great results. Along came a financial advisor who said, “I want to work with you.” I had some

experiences with financial advisors that were less than stellar, but I decided to take him on as my client anyway. Then one day, he told me that he’s really good at conversations and I said to him, “Show me how good you are.” He said, “Yeah, I will.”

We began to do this role-play as if I were his client. And the things that he said, how he was asking questions and deeply listening — really interested and concerned — made me look at him and say, “You are really good.” Well, of course

industry to help them understand that there’s so much more to conversation.

I work with financial professionals to help them understand why it is so difficult for some advisors to reach the next generation, or how to reach the wives of their clients after the husband has died. Why is it so difficult for some male advisors to relate to us as women?

Feldman: What’s the solution? How do you help advisors connect with prospects who may be out of their comfort zone?

Schmid: I teach people how to structure and lead a conversation where they can get people to understand that they really do care about them, that they’re interested in helping them. By showing that you care, you also show that by working together in partnership, you will help get your client where they want to go.

Feldman: You have said that there is a science behind having a meaningful conversation. What is the science? How does that work?

to him, “I want to become your client.”

It was so fortuitous that I became his client because only six months after I became his client, my husband died unexpectedly. And I remember looking back on that time, and I distinctly remember asking, “Who’s going to help me with my finances?” My financial advisor’s name popped into my head because I trusted him. And it wasn’t about products, portfolio, performance. It was because in the way he had talked to me, he showed that he really cared. So he was my resource. He became someone I could count on. And from that time on, I began to engage with other financial advisors.

Based on my experience with them, I wrote the book Make or Break Conversations: How Smart Financial Professionals Land New Clients and Keep Them For Life, and I continue to work with people in the financial services

Schmid: We must understand the science because this is an evidence-based, scientific practice and implementation. While we’re in conversation, your brain is a stoplight. Many of our conversations inadvertently turn that light red. The conversation sends signals to our brain that hijack the intent of the conversation so that we can’t think straight.

Instead, we want to say things that open the conversation and move people into wanting to tell us what’s going on. When we do that, our brain registers a green light instead of a red light. So now we can think, we can reason, we can problem-solve — we collaborate. That’s where trust lives.

So our objective is to say more of what turns the light green, opens up the prefrontal cortex, floods the brain with oxytocin — that’s how we can create conversations where we’re willing to share with one another and be open.

If we say things that will shut people down, they won’t tell us what’s really in their hearts and on their minds. People want to feel safe and included and have a conversation with less fear. When we’re open, that leads others to open up.


Feldman: If a client is normally closed off or shy, how do you get them to open up?

Schmid: An introvert is not necessarily shut down. They’re just not willing to speak up. So they may be listening, and they may be processing, and they may be deep in thought. It doesn’t mean that they’re shut down. Shut down means that you’re disengaged from the whole conversation. They may be wondering about when and how they can insert themselves into the conversation.

Feldman: Tell us a little about your seven guiding principles. These are the principles, you say, that lead to “healthy conversations” and that build trust.

Schmid: The first principle that we talk about, called “Share the Air,” explains that we need to include people, invite them into our conversation.

How do we do that? We invite them in by making it safe to join the conversation. We say, “Let’s talk about what’s important to you, and let’s talk about what’s important to me.” The conversation is not about being right or being wrong, it’s about learning. So how do I prepare myself? I always tell people, just breathe. Take one minute before your meeting, one minute before your conversation — just breathe in and begin to think about the other person, not about you.

Think about the other person, what might be on their mind. How can I help them to say what they want to say? What might it be like for them to be in a meeting with me when I know that they tend not to want to speak up? What can I do to facilitate that?

Then the second piece is your own presence in the meeting. Are you calm and relaxed, and open — or are you tight? When we just open up the meeting or the conversation, we create an emotional connection.

Feldman: As you say, words have great power and can put you into a good state of mind. Every financial advisor must think about how they engage a prospect or client through conversation.

Schmid: The first step is all in the setup. Although it sounds really simple, it’s

incredibly effective because it allows you to drop your guard. You see, our brain hates uncertainty. Our brain is always working to protect us. And if we sense something is off or if people are stressed or uptight, we respond to that immediately before words are even spoken.

I take one look at you, and I think, “OK, what do I read in you?” I read your eyes. I read your smile. I read your body language. And in an instant, I make a decision about whether I’m going to be nervous or relaxed.

When I invite you in and I want to find out what’s on your mind, first — before I go into my big spiel and tell you everything that I know — I effectively drop my guard. And when people drop their guard, you will see people literally physically relax. It’s so simple, but it’s so effective. We’re ready to be open.

Feldman: What is the second principle?

Schmid: The second principle, “Respect Others’ Opinions,” says we must be quiet and listen in order to connect. Because of the way our brains operate, we drop out of conversations every 12 to 18 seconds to make sense of what we have just heard. “What do I think about what you said? Do I think that you’re right? Do I think that you’re wrong? What am I going to say next?”

The result is, we stop listening. It takes a really concerted effort to simply focus on the person you’re speaking to.

If I’m really listening, I want to key in to what you’ve said. Once I key in on your words, I’ll take it one step further. I might ask, in relation to what you’ve just said, “What are you thinking about this? What was the impact? What are your feelings about that?”

Feldman: That’s a great way to think about a conversation — “It’s not about me. It’s about getting to learn more about you.” That’s the key to good conversation.

Schmid: The attitude that you must have going through a conversation is that this is not about you. I go into every conversation because I have something to learn. If I leave a conversation not having learned something, then I didn’t have a conversation. I had a monologue.

Feldman: One of the things you talk about is archetypes. Explain a little bit about that. Knowing those archetypes will help me know how to converse with those different types of people, especially those who are different from my archetype, correct?

Schmid: There are eight different archetypes. I’ll give you a few examples. The first is “the ruler.” They have a plan. They look like they have it all together. Even if they don’t, they look as though they do. And it’s hard for them to listen and include other people in a conversation.

The second is “the accumulator,” who operates largely out of fear and scarcity. The accumulator likes to see things safe, secure and tucked away. They know exactly to the penny what’s in their account. They know exactly where things will go. They hate uncertainty. So when they’re in conversations that involve some uncertainty, they freeze. They don’t know what to do.

Another archetype is “the maverick.” The maverick is the “big idea” person, the big risk-taker, yet they struggle with the specifics. Detail is not their game. They fall apart if they don’t have the structure and the systems in place to support the work that they do.

Next is “the romantic.” The romantic believes life is to be lived and life is to be enjoyed, and I really don’t care about tomorrow. It’s about spoiling myself and spoiling other people. They can teach us something in terms of living the good life. Where they fall short is that a lot of the time, they nurture and give gifts and spoil people because on the inside, they believe they are not worthy, not special.

I love all the archetypes because they all have different challenges and different ways of looking at things. Because my clients are financial planners, many of them tend to be a combination of accumulators and rulers.

Feldman: Give me an example of how a “ruler” archetype would act in a conversation.

Schmid: The ruler archetype is good at many things. They’re good at process, they’re good at planning.

And when they’re in conversations, they’re always looking for the result. How

8 InsuranceNewsNet Magazine » May 2023

do I get from point A to point B? It’s so difficult for them to listen because they’ve already got their mind made up about how they’re going to help you. Rulers need to slow down and simply say, “Well, this is what I know, but how do I manage myself in a conversation to make it about the other person?”

It’s about how do I learn how to quiet that part down and, instead, move into discovery and sharing more with other people, letting them speak.

In the financial services industry, many of my advisor clients are accumulators. They are best described by “A penny saved is a penny earned.” Let’s say they’re in a conversation and a client says to them, “Savings is good for someone else, but me — I just want to spend and not save.”

I’ll tell you exactly what will happen. The advisor will get triggered, and they will go into their monologue about the importance of saving. But they’ve missed the point of simply saying to the client, “Well, how does that work for you? How does that serve you?”

Feldman: Advisors often want to either give advice or sell themselves rather than get to know the client’s issues. They need to reexamine that approach, correct?

Schmid: Exactly. We are often premature problem-solvers rather than problem listeners. We hear a couple of facts, and then we automatically think, “Oh yeah, I’ve had millions of conversations like this. I know what you need. I know what’s right. And so therefore, I’m going to give you the advice,” even when it’s unsolicited, unwanted and premature.

Instead, the advisor should be a problem listener and try to figure out what their client is trying to accomplish. What is it that is challenging for them? Then the advisor should begin to think, “How can I help them? How can I serve them?”

Feldman: If you’re successful with understanding what’s on a client’s mind, and you understand how they’re feeling about it, then you’re connecting with their emotions.

Schmid: Yes, but you’d be surprised. Many people will say, “Oh, I’m afraid of emotions. What if they say something

that I don’t know how to handle?” Well, what if they do? Then we simply say, “Wow, I understand that was a hard situation for you.” That’s empathy and acknowledging that they’re going through something challenging. You might simply ask, “What support do you need? How can I help you?”

Feldman: How do you get better at that in your conversation? What are some tips? Let’s say I’m having a conversation and I feel like I’m drifting, and I need to get back into the conversation. How do you reconnect?

Schmid: It’s best to be honest. People know when you’re not listening. They see it in your eyes, they see it in your body language. They feel it. So if you’re drifting off, you say, “Sorry, I lost my train of thought for a minute. Something you just said made me think about something totally unrelated. Please tell me again what you just said.” It’s that simple. If we pretend that we understood, we’ll be totally off base about what they just said. What your client will be thinking is, “I saw he wasn’t listening. I could feel he wasn’t listening, and when he made that comment, that’s totally irrelevant to what we’re talking about.” They will understand if you’re honest. We’re all human.

Feldman: Are some people born great conversationalists? Can everyone be taught to be a great conversationalist?

Schmid: No one’s born a great conversationalist. When we understand what goes on in our brain that affects our conversation — the feelings, emotions, the actual brain biology, the neurobiology, the chemistry of conversations — we can learn the skills to be better at conversation.

We need to learn how to lead a trustbased conversation. If you’re willing to learn how to do that, you can learn not only the science but the skills to navigate conversations — even the hard ones.

That’s what I love about the work that I do. I think I’m pretty good at this, but I’m always getting better. In every conversation I have, I learn something. In the universe of conversations we’re having with one another — despite our differences and polarities — all of us can always get better.


Industry execs seek higher yields amid bleak economy

A major survey of insurance industry CIOs and CFOs revealed they expect a deterioration of credit quality and a recession this year but, for the first time, ranked increasing yield opportunities in the current environment.

The 12th annual global insurance industry investment survey by Goldman Sachs Asset Management found insurers are leaning heavily into fixed income and seeking to increase duration and credit risk.

More than half of global insurers surveyed plan to increase their allocation to private assets over the next 12 months, the insurance industry survey found. Across all asset classes, private corporate debt is the top asset class that insurers plan to allocate more to over the next year.

Twenty-nine percent of respondents plan to allocate more to private equity, and 28% plan to increase their allocation to infrastructure equity and infrastructure debt.

Full payouts spike for workers in this age group at just about every tenure level until you get to 15+ years. This suggests that life events may be playing a role in cash out behavior. These groups may be juggling multiple financial goals, such as saving to buy a house, saving for retirement or for college, but they are also carrying unprecedented levels of debt.


A U.S. District Court judge’s ruling that strikes down free HIV drugs and some cancer screenings under the Affordable Care Act isn’t a fatal blow to the ACA, although it does have implications. That was the word from a panel of KFF analysts.

U.S. District Court Judge Reed O’Connor, Northern District of Texas, issued a final judgement in a court case challenging the provision of the ACA requiring most private health plans to cover many preventive services without any cost-sharing for their enrollees. Having concluded in September that aspects of the requirement were unconstitutional and violated religious rights, the judge’s remedy in the Braidwood Management v. Becerra imposes new limits on the government’s ability to en force those requirements nationwide. The plaintiffs in the case Braidwood Management v. Becerra argue that the



billion from their bank accounts on a seasonally adjusted basis, according to Federal Reserve data.

But the banking industry was already facing challenges before the banks collapsed. In fact, total U.S. bank deposits declined year-over-year in 2022, according to data released by the Federal Deposit Insurance Corporation. That was the first time bank deposits declined since 1948, The Wall Street Journal reported.

preventive services requirement violates Article II of the U.S. Constitution, which vests the executive authority of the U.S. in the president but allows executive authority to be exercised by officers nominated by the president and confirmed by the Senate or by other “inferior officers,” as designated by law to be appointed by the president or heads of departments. Plaintiffs also argue that the requirement for them to cover HIV prevention measures such as PrEP drugs for free violated their religious freedom.

Sixteen percent of U.S. adults moved their money as a direct result of the SVB and Signature Bank closures, according to a survey by Morning Consult.


Inflation and price increases are fueling Americans’ concerns over the cost of living, with a CFP Board survey showing nine our of 10 Americans worry about how much it takes to afford life’s necessities.


As Silicon Valley Bank and Signature Bank collapsed, Americans withdrew $98.4

The survey found 63% of Americans are concerned about purchasing necessities, such as food and clothing, and 55% are concerned about paying their rent or mortgage. Americans also worry about the cost of living (89%) as well as inflation and price increases (87%). So how are they fighting back against these concerns? Survey respondents said they are buying items on sale (72%), buying cheaper brands (65%), cooking at home (64%) or buying fewer products (63%).

Older Americans are especially concerned about rising costs. Consumers 45 and older are more concerned than their younger counterparts about the cost of living (92% vs. 85%) and inflation or price increases (94% vs. 80%).

Source: Monster

10 InsuranceNewsNet Magazine » May 2023 NEWSWIRES
Most of the risks were hiding in plain sight. This wasn’t the finest hour for many players.
— Chase & Co. Chief Executive Jamie Dimon on the Silicon Valley Bank failure.
in 4 people said they would quit their current job for one that offers a four-day workweek.

Will their income potential survive a long retirement?

Clients are facing mounting risks that could significantly impact their financial wellbeing and enjoyment later in life – risks of inflation, taxes, market volatility, and the possibility of outliving their assets over a long retirement.

Fixed index universal life (FIUL) insurance provides death benefit protection, plus the opportunity to build accumulation value. FIUL does not provide a guaranteed income stream in retirement.

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the QR code to see how life insurance can provide a level of protection and the potential to complement a retirement income strategy.

The AI revolution_

The spotlight is on ChatGPT as AI seeks to reshape the world.

> We look at some of the first steps companies are taking to harness this new, now not-so-secret weapon to supercharge their business.

COVER STORY 12 InsuranceNewsNet Magazine » May 2023

Chat Generative Pre-trained Transformer, or ChatGPT, has become a household name. In the space of a few months, ChatGPT, an artificial intelligence chatbot developed by OpenAI and launched in November 2022, has taken the world by storm — including many corners of the insurance and financial services industries. Currently ChatGPT is all possibility, with many seeking to understand the reality of its capabilities — and its shortcomings.

The popularity of AI generative programs such as ChatGPT also can be seen in the sudden arrival of competitors, all long in the works but suddenly thrust into the spotlight due to ChatGPT’s notoriety. Google has launched Bard, to initial mixed reviews. Meta, Facebook and Instagram’s parent company, has launched Make-A-Video, an AI system that generates videos from text, and is planning other projects.

Others include IBM, with Watson, and Tesla. Essentially, there is a war taking place to see who will win the top spot in the AI world, much as Google won the search engine war years ago.

As the initial examination of these systems goes forward at high speed, many in the industry are trying it out. Their experiences inevitably have brought benefits, especially in the areas of idea generation, time savings and, to some extent, research, as well as in expediting mundane tasks including content outlines, editorial calendars, content briefs, FAQs, social media captioning and even search engine optimization.

We talked to some in the industry who have started kicking the tires of ChatGPT for these and other uses, as the power of generative AI becomes a time-saver, an ideation tool and, in some cases, an “assistant” for content teams.

‘An indispensable tool’

“In the fast-paced world of insurance marketing, AI has become an indispensable tool for creating compelling content,” said Greta Matiash , chief marketing officer and life insurance agent at Pivotal Insurance. “I rely on ChatGPT to

generate ideas, kick-start blogs and create social media captions. With its ability to provide a range of options and suggest commonly used SEO keywords, ChatGPT is a valuable asset in our content creation process. It even helps build out a content calendar for the month, which we can then customize to fit our events and timeline.

“However, it’s important to note that AI is just one part of the equation,” she said. “We still rely on fact-checking, research and customization to ensure that our content is unique, accurate and tailored to our audiences’ needs. AI is a powerful tool, but it’s the human touch that truly brings our content to life.”

“We will create blog posts, which are often informational content,” explained Ron Wadley, insurance agent and owner at Insurance for Texans Group, based in Bedford, Texas. “The blog posts will be about relevant topics of the day in insurance. What we have found over the last five years is if we are creating content around the questions and concerns that we hear our prospects and customers talking about, there are lots of other people that have those same questions and concerns. We create content around those items. It can be video, blog entries or information for our site.

“That all will get pushed to social channels, but if it’s on our website first, the SEO will generate traffic. Traffic begets leads and leads beget customers, which ultimately ends up in revenue for the business. We had done a lot of that through brute force over the last five years. Over the last 18 months, we were using Jasper and some other AI tools before we started using ChatGPT.

“One of the things that we’ve found with the AI tools and ChatGPT in particular is that if I have a question, I can first use ChatGPT to create an outline. I’ll ask ChatGPT, what kind of framework do I want to use? What are some key points that I want to make sure that I include? Our secondary piece of software that we use, called Frase. io, allows us to pull in things like headers, titles, key points that

THE AI REVOLUTION COVER STORY May 2023 » InsuranceNewsNet Magazine 13
Matiash Wadley

other high-ranking websites are using. We marry those two sources together to come up with a framework of what we want our content to look like.”, Wadley said, has some “algorithms that are built into their software that allows me to juice up things for SEO purposes.”

Wadley said he has found that ChatGPT is by no means perfect.

“If you don’t have some amount of subject matter knowledge, you will 100% get your behind burned. If you’re asking about what makes the sky blue, it’s probably going to get that mostly right. When you’re talking about the intricacies of insurance and financial services, it can be a very detailed answer. And if it has not been fed the right information, it could absolutely be wrong.”

Wadley said because conditions on policies in one state can be completely different from conditions in another state, “you have that regionality issue that can be in play. For example, I live in hail country, and what goes on here is vastly different than what you see in coastal Oregon, where they don’t have hail.

ChatGPT doesn’t know that, so you have to have some amount of subject matter knowledge to be able to leverage it: Is this giving me the right outline? Is this giving me the right things to consider?”

Because of the possible errors, Wadley said he’s wary of using ChatGPT to author complete articles that he would publish. “You can use it — and we have — to write an introduction, maybe a transition between two items. I tested something about health insurance the other day. I had it create an outline and then I had it write a full-blown article. It was 2,200 words and had a great SEO optimization score. I am scared to death to publish that.” To publish something written by ChatGPT, said Wadley, “you’re going to have to fact-check.”

Rayne Morgan, a content marketing manager with Policy Advisor, based in Vancouver, B.C., said that her team is leery of using ChatGPT for authoring complete pieces of content, too.

“We are using it for content, for social media, but also for our blog website

Four tips for writing ChatGPT prompts_

1. Be as specific as possible.

Specify your target audience, ideal word length, tone, what to include and what not to include, how you want it styled, etc. This helps increase your chance of getting output that's ideal or close enough to work.

2. Ask for multiple options.

Avoid having to go back and update your original prompt multiple times if you don't like the response ChatGPT gives you. Asking for multiple options increases your chances of getting something that works or just some fresh ideas.

3. Give context.

I've found that the responses I get if I explain my intention first are different – and more helpful – than if I start from scratch.

4. Give examples.

Until AI is capable of memorizing unique style guides, giving ChatGPT an idea of how you want something formatted or worded will help it give the output that you have in mind.

as well,” said Morgan. “Now when I say we’re using it, let me break that down. We’re not 100% reliant on it. The content team we have is pretty small. It’s just me

say, we’ll ask GPT the best way to phrase a certain thing. Or we’ll ask it, “How can I make it more friendly for social media? How can I make it more SEO friendly?”

and my colleague. We’ll have a meeting, we’ll put together a plan. For example, this is the social media post we want to have, these are the articles we want to have in a certain time frame — like in a week, two weeks, a month or however often. And once we brainstorm, then we’ll use ChatGPT like an assistant. We’ll say, OK, we have these ideas in mind of what we are going to do, and we ask ChatGPT to give some us ideas on the best way to do this.

“If we get to the point where we’re kind of stuck on what exactly to

Morgan said her team will also use it for brainstorming topic ideas as well.

“Let say it’s the month of May. We’ll ask ChatGPT, “What are some ideas that we can do?” Or if we want to do something for general insurance, what are some fun ideas that we could do? We don’t roll with everything that it gives us, but it doesn’t hurt just to plug it in and see if it comes up with something interesting.”

Morgan said she will also use analytics to unearth trends that may be good topic ideas. Once they have those topics, they may use ChatGPT to create content briefs.

“Because we’re such a small team, it

COVER STORY THE AI REVOLUTION 14 InsuranceNewsNet Magazine » May 2023
Now when I say we’re using it, let me break that down. We’re not 100% reliant on it. ... once we brainstorm, then we’ll use ChatGPT like an assistant. — Rayne Morgan
— Rayne Morgan See more prompt examples from Rayne on pages 16-17.

was a bit time consuming for us to kind of go through content briefs for every single article. We want to do two or three articles in a two-day span. It’s a lot for two people.” So, by helping with the content briefs, ChatGPT provides a valuable time savings for the team, she said.

Can ChatGPT author articles successfully?

“Financial advisors and insurance agencies can certainly utilize AI/ChatGPT for marketing purposes, but we always advise a more careful approach,” said Michael Maximoff, co-founder and managing partner at Belkins, a B2B lead generation company whose clients include financial advisors and insurance agencies.

“Generative AI should never be used for the sole purpose of creating and copypasting content in these industries due to the higher probability of generating incorrect information,” said Maximoff, adding, “Instead, in these sectors, we prefer to use AI/ChatGPT as a data research and organizational tool that helps us speed up the content production processes without having a direct impact on what is produced. Generative AI is extremely powerful as a search, organizational and data research tool, and its use far extends the casual ‘write me a paragraph about X’ approach that most marketers prefer, and we certainly tend to avoid it, especially in the financial/insurance sectors.”

Morgan said her team had tried to have ChatGPT write articles, without much success. “We said, OK, we don’t want our competitors cranking out like a hundred articles a day because they’re just using AI for everything. So, let’s take a stab at it and see how it comes out. And honestly, I mean, not knocking its uses — it’s definitely useful, it’s definitely groundbreaking — but it’s not at the level where it can just crank out articles that are just ready to go and perfect just yet. It failed on every level. It would just repeat itself often, and it had factual errors. Or I would say, “‘Give me 1,500 words’ and it would give me 700 words.”

“The process of going back and fixing it was way more time consuming than just writing it ourselves,” she said.

The art of prompt writing

Morgan said that writing prompts correctly to get the results needed has taken some patience and practice.

“It has been challenging. It usually takes a couple of tries to get exactly what we’re looking for. I’ll have to go back and edit the prompt to be more specific. I end up writing about a paragraph of prompt instructions to get exactly what I want. I find that sometimes I’ve had to justify my request. I’ll start by explaining myself, and provide more context. I find that its answers also change based on how well I explain what I need.”

“To give you a specific example, we recently did an article about how suicide affects life insurance.” First, said Morgan, she asked ChatGPT for some examples of the kind of audience that would relate to the topic.

“It stopped me. It said, ‘You know, suicide is a very heavy topic. Please seek mental help.’ And I had to explain to it that I’m in the insurance industry, I’m

earthquake insurance on his QuakeCov. com site. In that post, he warns others of the dangers of using AI-generated material. “I was surprised how much information was either totally or partially inaccurate,” he states in the post.

“So far, it’s crazy bad,” he told InsuranceNewsNet, adding, “I have loads of examples of inaccurate information. I’m scared, frankly, that others will try and use it and not edit it correctly. It will get better. I truly believe that — but it might be a while.”

ChatGPT and social media

As with a number of others interviewed for this article, Morgan said her team uses ChatGPT for helping produce captioning for social media posts.

“We use it for social media captions. We tell ChatGPT that we’re having this post rolling out for Women’s History Month. Can you give us a cute caption about Women’s History Month for LinkedIn about insurance. If what I ask is very general, I’ll find that it’ll say something that is completely not what I’m looking for. I would have to ask it

writing an article about this, and I’m looking for some kind of guidance here. And then it said that it understood the context and could give me more of what I was looking for. So, in writing the prompts, I start by explaining my context first, what I’m actually trying to do. And then I spend about a paragraph being extremely specific. For example, how many words do I want? What kind of language do I want? Do I want it readable at like an eighth-grade level, a 10th-grade level, or is it for social media? Do I want emojis? Do I want hashtags?”

“It can be a little bit challenging sometimes,” she added.

Scott Johnson, of QuakeCov and Marindependent Insurance Services, wrote a post about his experiences with attempting to have ChatGPT author an article on

specifically for ways that women can empower themselves with insurance. I can’t just say ‘Women’s History Month on insurance.’ It’s never just a one-shot kind of deal where it gives me the perfect caption, and I can go and roll with it.”

Morgan said she also is looking to do some email marketing using ChatGPT. “We would ask, what’s a fun way that we could promote a certain subject, like how can we promote critical illness insurance? Or like February was Heart Health Month. How can we kind of incorporate that into a cute little email about critical illness.” ChatGPT can help brainstorm ideas to help generate email content.

THE AI REVOLUTION COVER STORY May 2023 » InsuranceNewsNet Magazine 15
So far, it’s crazy bad. I have loads of examples of inaccurate information. It will get better. I truly believe that — but it might be a while.” — Scott Johnson

She said her team is also thinking about using ChatGPT for TikTok. “We haven’t started TikTok yet, but we’re looking at it. How can I put this topic into a cute video for TikTok for a younger audience? That kind of thing.”

Marketing and email campaigns

“As a financial expert, I am always looking for innovative ways to create effective marketing and social media campaigns,”

said Tommy Gallagher, former investment banker and founder of Top Mobile Banks, a site dedicated to digital banking.

“Recently, I have been using AI technology, such as ChatGPT, to help me in this endeavor. For example, I used ChatGPT to create a social media campaign focused on retirement planning. Using ChatGPT’s natural language processing capabilities, I was able to input the key messaging and target audience demographics. The AI system then

generated a variety of social media post options that were tailored to the specific audience and messaging goals.

“ChatGPT has helped with more than just social media campaigns. It has also helped with making marketing materials. The AI system can look at a lot of data and trends and come up with insights and suggestions that I can use in my marketing efforts. Personalization of messages and content is a major benefit of adopting AI technologies such as ChatGPT.

“This can be done by segmenting audiences based on different characteristics such as age, income level and spending habits, and then creating messages that are specifically targeted toward those segments. The system can also analyze an individual’s past interactions with a company and use that information to create personalized marketing messages that speak directly to their needs and interests.

AI also can help financial advisors optimize their social media and marketing campaigns in real time, said Gallagher. “By monitoring engagement and performance metrics, I can adjust their messaging and tactics to ensure maximum impact.”

Incorporating AI such as ChatGPT into marketing and social media campaigns, he said, can help reach a wider audience, personalize messaging and optimize tactics for maximum impact. “As the financial industry becomes increasingly competitive, using AI technology will be crucial for advisors looking to stay ahead of the curve,” said Gallagher.

“I have been using ChatGPT in my email marketing,” said Brandt Hudson, an independent insurance broker. “I find that it is a great way to give more information to those who need more information in the buying process. Also, as an agent, it allows me to get into contact with more people as well as help them be informed in the buying process.”

ChatGPT for SEO

When it comes to SEO, Wadley said the combination of ChatGPT along with Frase. io is very powerful. describes its AI tool as “an intelligent automation and

COVER STORY THE AI REVOLUTION 16 InsuranceNewsNet Magazine » May 2023
Gallagher Hudson ChatGPT prompt examples provided by Rayne Morgan

content optimization (content editor) tool that provides comprehensive insights (e.g., content gaps, target keyword, keyword research tool, content score).”

“This is where I lean heavily on the side of the house rather than ChatGPT itself. If I get stuck with a headline, that’s where the AI can be fantastic. ChatGPT or AI can do a fantastic job as far as the optimization of the article itself. has an algorithm that uses the results from all of the various webpages of the top 20 ranking pages for the keywords. It will compare your content based on those keywords, and based off of the number of headings, images and the length of the article. And it will give you a composite score to compare you against the other top 20 articles,” Wadley explained.

So what impact does this use of AI have on Wadley’s business?

“Why would I be so arrogant to think

that I could compete against [generative AI] in this space? Well, one of the things that we run into here in north Texas is the insurance companies are now pushing actual cash value on roof claims from hail, which is really bad for consumers.

“I can go in and I can optimize [for search engines] because I know what specific search terms people are looking for in that arena. I can optimize a long tail phrase and I can rank number one in the entire world for that long tail phrase. And it can put a customer in my lead pipeline almost every day.”

John Forcucci is InsuranceNewsNet editor-in-chief. He has had a long career in daily and weekly journalism. Contact him at johnf@innemail.

THE AI REVOLUTION COVER STORY May 2023 » InsuranceNewsNet Magazine 17
View all our past recordings and sign up for upcoming webinars at
InsuranceNewsNet’s Webinar Series Join InsuranceNewsNet’s award-winning editorial staff as we host in-depth discussions with industry movers and shakers. These free, live webinars will explore the latest trends and research in the annuity, life, health and financial industries. Interested in learning more about ChatGPT? Join us on May 10 for an exclusive webinar with Ron Wadley and Rayne Morgan. Join us live for your chance to ask questions directly, or if you can’t make it, view recordings of each webinar in our free on-demand library.
“The AI system can look at a lot of data and trends and come up with insights and suggestions that I can use in my marketing efforts. Personalization of messages and content is a major benefit of adopting AI technologies such as ChatGPT.” — Tommy Gallagher


18 InsuranceNewsNet Magazine » May 2023
Leadership Month
how advisors are gaining traction with social selling & online selling.
Combo PermTerm Life Solution You’ve Been Missing
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Policy Administration: How LIDP’s Titanium Is FutureProofing Life Insurers for Tomorrow and
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The Combo Perm-Term Life Solution You’ve Been Missing


Customers want certainty and a sense of control, and there are thousands of untapped whole life sales just waiting for you – one simple rider can amplify the product you’ve always known and make it an attractive sale for a huge range of potential clients.

It’s my team’s goal to partner with producers like you and help you succeed – and combining the strong guarantees of permanent coverage with additional term protection is one of the most effective ways to reenergize your whole life sales. Let’s start with a quick snapshot of the market from our friends at LIMRA and LifeHappens:¹

• Whole life insurance remains the most popular insurance product, with 65% of individual life insurance owners having permanent coverage

• It’s an especially popular choice among those making less than $100K a year and younger consumers, like Millennials and Gen Z

• Many of the customers who are most likely to buy whole life – younger, less wealthy clients – are underinsured; only 45% of Millennials and 52% of people making between $50-100K have any life insurance

See a pattern? There’s a large, underinsured pocket of the market made up primarily of people growing their family or building their career. These prospects are subject to more financial instability than other more established demographics, which is where our solution comes in. Assurity Whole Life with the Level Term Rider provides the stability and reliability that makes whole life an enduring favorite and combines it with enhanced protection when your clients need it most.

The beyond their permanent coverage – for a term, they can add up to 10 times their base policy benefit in affordable term coverage. And the term benefit is fully convertible to permanent insurance.²

Think about the possibilities: additional coverage for the duration of mortgage, until student loans are paid off, or while children are in school, with the option to convert the rider if it isn’t needed. It’s a perfect solution for the ideal whole life market we discussed above – people with their whole lives ahead of them.

Here’s where it gets even better. That basic sales concept will take you a long way, but when you match the combined power of permanent and term insurance with Assurity Whole Life’s other flexible features, you end up with versatile new options. You could combine the perm/term solution with our limited pay options to give clients new ways to pay off their coverage in 10 or 20 years, or by age 65. Or give them the chance to increase their coverage with the Paid-Up Additions Rider. And those are just the optional features – living benefits for chronic and terminal illness are built into every policy.³

It’s our goal to make your job easier and provide your clients with better protection – my team and I want to remove any possible barriers to more sales. Start by learning more about everything Assurity Whole Life can do at the webpage below, then give us a call to get started on the path to growing your whole life business.

LIMRA and LifeHappens, 2022 Insurance Barometer Study, 2022.

All or part of the benefit amount may be converted to a new policy of permanent insurance without submitting evidence of insurability for a period beginning on the first rider anniversary and ending on the earlier of two years before end of term period or the insured’s 65th birthday. Premiums for the new policy will be based on the insured’s gender, age, and Assurity’s rates in effect on the new policy’s date of issue and the underwriting classification risk under which the rider was originally issued. Accelerated Death Benefit Rider is included in states where allowed. The chronic illness benefit is included through issue age 75.
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Revolutionizing Policy Administration: How LIDP’s Titanium Is Future-Proofing Life Insurers for Tomorrow and Beyond

To remain competitive in the world of digital immediacy and convenience, more than 75% of life insurance companies want to enhance their users’ experiences. Whether they are looking for smoother, more streamlined processes for their agents and internal teams or looking to make their users’ experiences entirely web-based, these goals require an advanced policy admin system that is flexible, customizable and scalable.

Enter Titanium, a cloud-based, award-winning solution designed to meet the needs of insurance carriers. But Titanium is more than just a software product; it’s the means to modernize a carrier’s entire infrastructure so as not to become irrelevant as the industry evolves.

For this article, INN spoke with Matthew Segreti, chief technology officer and senior vice president of product development at LIDP. He shared how the company is changing the game for life insurers with a customer-first approach and a cutting-edge policy admin system, Titanium.

Legacy problems meet innovative solutions

Despite advances in technology, many life insurance companies continue to rely on outdated systems running on mainframes and using programming languages like COBOL. While some individuals may still possess the knowledge to operate those systems, expertise is quickly becoming scarce. As a result, it’s essential for life insurance carriers to modernize their infrastruc-

agents with access to critical information when they need it. With a robust agent portal that includes features such as e-apps and real-time illustrations, agents can provide clients with immediate answers to questions about policy values and other important details. The customizable dashboard gives agents access to all policy transactions, underwriting statuses, commissions and licensing information, and more, empowering them to provide exceptional service and support to clients.

Cashing in on cost savings

In addition to the many benefits of an all-in-one system, life insurance companies can also save on costs by adopting a cloud-native deployment architecture.

This approach allows for horizontal scaling of systems and provides flexibility in how the application stack scales when load is necessary. To address the challenges of heavy processing times at the end of the month or quarter, Titanium’s migration to containerization enables insurers to deploy the application stack to any cloud provider or even on-premises.

This technology allows life insurance companies to automatically scale their systems based on anticipated load,


to claims processing

The complexities involved in maintaining a life insurance policy over someone’s lifetime are vast, making it very dif ferent from managing a P&C policy, for example.

With Titanium, life insurance companies can streamline their operations across the entire policy life cycle, from product configuration to claims processing to everything in between. This comprehensive solution eliminates the need for third-party systems, such as ones used for illustrations or e-apps and includes all the necessary components to ser

Titanium’s all-in-one platform enables life insurance com panies to house all their data, making it easier to provide

reducing costs by eliminating the need to overprovision

In addition to the cost savings associated with cloud-na tive deployment, LIDP has set a goal for 2023 to make Ti tanium even more cost-effective by building it entirely on

This approach would eliminate additional costs for data storage because open-source databases offer the same flex ibility and security without the added expenses. By adopt ing open-source technologies, life insurance carriers can further reduce spending while maintaining the high level of functionality and security required for their operations.

With Titanium, life insurance companies can streamline their operations across the entire policy life cycle, from
2023 Virtual Advisor • Special Sponsored Section 20 InsuranceNewsNet Magazine » May 2023

Best-of-both-worlds approach

Despite the rapid pace of technological change, many life insurance companies have been slow to adopt new technol ogies, largely due to the difficulty of digital transformation — especially when it involves replacing a carrier’s current policy admin system. This core system is critical, and attempting to rip it out and replace it can be a daunting task for companies.

This common challenge drove the development of Titanium. A modern policy admin software system, Titanium takes the best-of-both-worlds approach to modernization. It enables life insurance companies to migrate and convert legacy data into a new policy admin system, or to start fresh. Throughout the modernization process, LIDP strives to make the transition as smooth as possible, providing a superior user experience.

Installation is as simple as pushing a button, and LIDP handles the integration and data validation while clients explore new features available with Titanium. To facilitate integrations, LIDP has created over 200 unique RESTful API endpoints, enabling different computer systems to communicate and exchange information with ease. This helps insurers take all the necessary “puzzle pieces,” such

stated Segreti. “Recently, a client was able to go live with a new product sooner than expected, and it tripled their sales expectations. This was really exciting for them, and Titani um helped facilitate that.”

This rapid time to market allowed the company to gain a competitive advantage and achieve outsized sales perfor mance. However, bringing a product to market is just the first step.

To establish dominance in the industry, insurers must also focus on improving engagement between agents, pro spective clients and policyholders, as well as ensuring ef fective communication between internal departments. Ti tanium’s features, such as instant notifications, can help with this effort, enabling insurers to deliver a seamless experience to customers and stay ahead of the competition.

A holistic approach that drives growth and success

LIDP takes a unique and holistic approach to problem-solving, recognizing that technology alone is not enough to solve the complex challenges the life insurance industry may face. That’s why they focus on developing a deep understanding of the life insurance business’s pain points,

as a general ledger system or a document management system, and ensure they are in place during the transition, accounting for every area of the business that the policy admin system touches.

“At our core,” said Segreti, “we believe a technology platform should never be the bottleneck to our clients’ growth and success. Our platform operates seamlessly in the background, providing the necessary infrastructure and support to enable life insurers to stay ahead as the landscape

Maintaining status as an industry leader

Life insurers need to modernize to enhance the user expe rience and also to grow and maintain their position as an

Part of that is bringing new products to market. How ever, insurers can face challenges with introducing new products because they are not configurable in the insurer’s current policy admin system. LIDP works with insurers to address these issues by taking their existing functionalities and seamlessly moving them to Titanium.

A common hurdle for carriers is the struggle to launch products quickly, often taking six months or more. With Titanium, however, actuaries can experiment with policy features and pricing and test new life insurance products, define the underwriting requirements, build the applica tion, and bring the product to market within just a few weeks, thanks to the system’s flexibility.

“Staying ahead of their competition and establishing themselves as an industry leader requires speed to market,”

enabling them to provide tailored solutions that address specific needs and drive growth.

LIDP’s team of experts is dedicated to identifying advancements and opportunities that can benefit their clients and the industry as a whole. They work closely with their life insurance carrier clients to turn innovative ideas into reality, leveraging their expertise and knowledge to stay ahead in a rapidly changing industry.

Through a holistic approach, LIDP delivers custom solutions that meet the unique needs of each client to help them achieve their strategic objectives and thrive.

“At LIDP, we are dedicated to supporting our clients and helping them navigate the challenges of the insurance industry. Titanium combines technology with our business expertise, empowering insurers to succeed in

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To learn more about how Titanium helps streamline your operations, reduce costs and improve customer to


CHE NORMAN’S passion for serving clients and her love of community inspired her to help found an organization for Black insurance agents.

the Fıeld A Visit With Agents of Change 22 InsuranceNewsNet Magazine » May 2023

Early in Chinyere “Che”

Norman’s insurance career, she worked with a female client who was living one of every future retiree’s biggest fears.

Norman said the woman, who was retired, was eating cat food because she didn’t have enough money for nutritious groceries. She also was paying $200 monthly for her Medicare supplement and prescription drug plan. Norman reviewed the client’s financial situation and moved her to a zero-premium Medicare Advantage plan.

“Now she had an extra $200 a month to buy healthy food,” Norman said. “This was when I started to realize how much helping someone with their insurance would affect the other areas of their lives.”

Norman is Georgia regional manager with Advocate Health in Atlanta, and she has worked in the Medicare space for 17 years.

Her work with Medicare clients began when she was a recent college graduate, working in an assisted living community

me. I was all in, and I realized I could pivot in different ways in this industry if I needed to.”

Eventually, the owner of the agency where she worked expanded his offerings to include life insurance, and Norman expanded her knowledge base as the business expanded. She soon acquired her securities license.

“We continued to elevate our offerings to clients,” she said. “I went from Medicare and small policies such as final expense life insurance to working with clients on all of the components of their financial lives. I wanted to make sure they were efficient on the health insurance side, and that led to more financial planning business. I wanted to help folks invest their money better.”

As Norman helped more clients find the best Medicare coverage for their needs, she branched out into helping them with issues such as Social Security maximization and making sure they had the right life insurance in place or positioning some of their funds in annuities when appropriate.

having lots of opportunity, I’m also an analytical person. In my younger years, I would make decisions quickly, and I saw it would trap me. So I realized it’s OK to step back and give myself time. I don’t have to be reaching all the time.

“Because if life is abundant and you have lots of opportunity, you really can sit back and receive. So for 24 hours, I need to think it through. This helps me to settle in on the decisions I make, instead of making quick decisions and second-guessing myself later.”

In those 24 hours, Norman determined the career switch was right for her.

But after about five years, she moved to Advocate Health, a field marketing organization, where she helps onboard and train agents. She has been with Advocate since 2022.

Making the move to coach

In the meantime, Norman made another career move and became a life coach in addition to her work in the insurance business.

In 2019, she started Tha Bridge, a financial accountability coaching company that aims to help people bridge the gap between who they are now and the life they desire. She said life coaching is a natural offshoot of her work in training and mentoring agents.

while planning to attend law school. A member of her church told her his brother was starting an insurance agency focused on the senior market.

“He said he knew I worked with seniors and told me, ‘I know you would love this,’” she said. “I met with his brother, and I never looked back.”

Norman said her work in the senior market fulfilled her desire to be an entrepreneur while helping others.

“Soon after I started working in this area, I saw that I could help people with so many things in their lives by starting with their health insurance,” she said. “The insurance business really called to

She also began to attract younger clients and helped them with their life insurance and financial planning needs.

The 24-hour rule

Eventually, Norman had the opportunity to move to the corporate insurance space, where she would manage other agents. But before she made that decision, she implemented what she calls her “24-hour rule.”

“I’m the youngest of three children in my family, and I’m the youngest of my maternal grandmother’s 39 grandchildren,” she explained. “I was born with a lot of opportunity, a lot of support, a lot of help. But even though I see myself as

“When you are training and onboarding and teaching agents, you are leading from the front,” she said. “With coaching, I’m able to lead more from the side or from the back and watch someone figure things out on their own. You give someone space to grow, to feel comfortable, to feel nurtured and to feel safe. You talk to them about their money, how to plan for the future, what options they have. And they’re more open and are better equipped to make decisions they can stick with.

“I lay it out for people and give them the space to chose the best route. And I coach them throughout it all.”

Norman said she chose Tha Bridge as the name for her coaching business “because it’s me standing in the gap.”

“If you can get who you are and understand your opportunity, then you can get to what you think you want as far as lifestyle and as far as money,” she said. “Once we do that life coaching around

STANDING IN THE GAP — WITH CHE NORMAN IN THE FIELD May 2023 » InsuranceNewsNet Magazine 23
Che Norman and Thomas Priester launched the Society of Black Agents in December 2021, and it has grown to 1,000 members.

the Fıeld A Visit With Agents of Change

who you really are and what you say you want, you may be inundated with looking at the lives of other people reaching for things that aren’t even naturally in your trajectory. But when you give people space to really get into who they are, out of that can be a more authentic financial plan, life plan and evaluation.”

Starting SOBA

Norman has worked with community cooperatives in the Atlanta area for a number of years. Her experience in that realm brought her to the attention of Thomas Priester, who she had met some years previously through their work in the insurance industry. Priester started KORE Financial, a brokerage firm in Atlanta that works with individuals, families and small-business owners to protect and grow their wealth through life insurance.

“He had tried to start some insurance groups in the past, where members would champion collaboration and connectivity over competition,” she said. “But we found too many situations where someone had a winning strategy or found a new market but was afraid to share that information with someone else. We all are driven to be so competitive. I think competition can be a good thing, but hypercompetition can kill careers and kill relationships.”

Norman said Priester approached her about starting a group of Black insurance agents and agency owners connecting and sharing best practices. “He knew I had a feel for community and I wanted to see us win as a Black community,” she said.

The two launched the Society of Black Agents in December 2021, and it has grown to 1,000 members.

SOBA provides training through webinars and calls, access to interviews with industry leaders, and digital marketing content to attract more clients, in addition to connecting its members with industry peers.

“We wanted to build up a force of individuals who trusted each other, who knew their craft and who are experts in their space,” Norman said. “But we also wanted to create a space where newer agents can come in and quickly attach themselves to folks who want to see them win and who know how to help them win. A lot of times, Black professionals really struggle to fit into the mainstream version of who they should be.

“With SOBA, it’s the opposite. We provide support, connectivity and guidance so someone can thrive in this industry on their own terms. We champion our

cultural differences, and we know our power. And we know that when we work together, we create more opportunities.”

Those opportunities extend to those outside the industry, Norman said. “We find there are so many people — mothers, fathers, grandmothers, young adults — who are interested in being better with their finances and then understanding that insurance is a foundational piece of all this. It’s all about leaning into the power we hold and affecting our community from a powerful place.”

Food as medicine

Norman enjoys travel, riding her electric bike and spending time with her extended family.

She also is serious about health and wellness.

“My family is really strong about health and wellness and about not necessarily running to the doctor for all our needs,” she said. “I am passionate about using your food as medicine. My sister is an herbalist, and I grew up with a father who is vegetarian. I love cooking real, whole foods.

“When we talk about wealth, we talk about health. And I believe we often miss that component of letting food be your medicine, and I would like to see more of a conversation around that.”

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

Like this article or any other?


24 InsuranceNewsNet Magazine » May 2023
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“When you give people space to really get into who they are, out of that can be a more authentic financial plan, life plan and evaluation.”


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1 in 10 middle-income consumers said they have put off buying or said they would put off buying needed insurance due to worsening economic conditions.

Life premium expected to maintain record levels through 2024

Enough positive variables are in play for LIMRA analysts to project record-level life insurance premium through 2024. Specifically, December 2020 changes to the IRS tax code criteria that cash value life insurance policies must meet to retain taxadvantaged status.

Fueled by the COVID-19 pandemic, life insurance premium hit record highs in 2021. That strong growth continued in the first half of 2022, then tailed off, according to LIMRA’s U.S. Retail Individual Life Insurance Sales Summary for Fourth Quarter 2022. Life insurance premium totaled $15.3 billion in 2022, roughly level with 2021.

Whole life new premium dropped 19% in the fourth quarter of 2022, compared with results from the prior year. Fourth quarter of 2021 WL premium experienced the strongest quarterly premium growth for WL in 30 years. Term new premium growth fell 5% in the fourth quarter, year over year. In 2022, term new premium was $2.8 billion, 5% lower than the 2021 results.

Compared with the 29% premium growth for indexed universal life in the fourth quarter 2021, IUL new premium fell 5% in the fourth quarter 2022. For the year, IUL new premium totaled $3.9 billion, up 13% over 2021 results. IUL held 25% of the total individual life insurance market in 2022.


Anyone connected to the life insurance industry knows that the number of Americans covered by life insurance has steadily declined for decades. The reasons behind that decline generated some sharp insights recently during a presentation at the National Association of Insurance Commissioners’ spring meeting.

The number of families reporting any life insurance coverage peaked at 85.4% in 1971. That number declined nearly every year since and is expected to decline in 2022 from 59.4% in 2021, said Andrew Melnyk, chief economist and vice president of research for ACLI.

The life insurance industry saw its second-largest increase in death benefits paid in 2020, Melnyk pointed out. The COVID-19 pandemic had an enormous impact on the industry. In fact, death benefits paid generally increased strongly throughout the history of life insurance in the United States, he added.


mortality and longevity risk of the individual, and financial information such as income and assets that determine insurable interest, suitability and eligibility for coverage.


Colorado is leading the way on regulation around insurers’ use of data with its first rules requiring life carriers to ensure the use of third-party data in life insurance underwriting does not discriminate against protected groups.

The proposed data discrimination rule would impose limits on life carriers’ use of external consumer data and information sources, algorithms and predictive models to ensure it does not result in discriminatory insurance practices.

Any carrier or insurance practice using consumer data besides traditional underwriting factors would have to ensure that the use does not detrimentally affect any group defined by race, color, national or ethnic origin, religion, sex, sexual orientation, disability or gender expression.

Traditional factors are medical information that has a direct relationship to the


Life insurers are increasingly compiling high-risk assets, and AM Best is watching closely, two directors assured a federal Department of the Treasury committee. The exposure to high-risk assets “is something that could be problematic for these companies, and the first signs that we see, we’re going to be all over these companies. Absolutely,” said Mike Porcelli, director for AM Best.

AM Best issues financial-strength ratings measuring insurance companies’ ability to pay claims. It also rates financial instruments issued by insurance companies, such as bonds, notes and securitization products. Its ratings are a crucial measure of insurers’ financial stability and reputation.

Two trends have regulators and some legislators concerned about life insurers taking on higher risk. For starters, a long low-interest-rate environment forced insurers to seek out riskier investments in order to make a return. Some life insurers are making deals with private equity to manage those investments. Some private equity firms are buying life insurers outright, attracted to the large capital in the form of policyholder premium. CNBC reported on insurers’ risky investments in failed banks such as Silicon Valley Bank as reasons why underwriting losses are soaring.

SOURCE: John Hancock

26 InsuranceNewsNet Magazine » May 2023 LIFE WIRES
Producers want to be comfortable with the person they’re working with. And often that’s someone who looks like them.
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12814 2.23S

5 questions to ask smallbusiness owners about their exit strategies

The use of key person life insurance is a critical aspect of a business continuation plan.

Exit and key person strategies are critical for the survival and continuation of most small businesses — and never more so than in today’s economy. These strategies also can play a vital role in helping founders derive maximum value from their company.

Yet, getting these strategies right isn’t always easy. In fact, according to the largest online broker site,, only between one-fifth and one-third of small firms posted for sale every year are actually sold. Likewise, many business owners are unaware of the options available to them when it comes to mitigating the risk of losing a partner or key employee.

Financial advisors play a valuable role in helping clients understand the details behind their most important financial decisions and then arrive at the best possible choice for them. It’s never too early to begin discussing exit and key person strategies. Here are five critical questions to ask your business owner clients.

1. Do they have a backup plan?

Many business owners figure that when they’re ready to retire, they’ll simply go right ahead and sell their business to a third party. But the reality is often rather different, either because the sale takes a long time or because the sale doesn’t happen at all.

Therefore, in the same way they have a business plan to guide the growth of their company, every small-business owner should have a plan that guides the company to conclusion.

This plan should include a backup option in case a third-party sale isn’t possible, such as passing the business on to a family member or grooming a partner, investor or key employee for a buy-sell agreement.

2. Are they using key person life insurance?

Every small company has at least one employee — the founder — and often others who serve as the bedrock for the company to function. The loss of this key person or employee can have an outsized impact on the business’s performance.

A life insurance policy for owners or key employees means if one of the people covered by the policy leaves due to disability or death or to pursue another career opportunity, those remaining with the company can use the cash value of the plan as liquidity to buy out that person’s share of the business. This mitigates the financial risk and ensures continuity. It also offers an extra incentive for key employees to stay with the company.

What is key person life insurance?

Key person insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away.

The business owns the policy, pays the premiums and is the beneficiary. If a key person dies, the business then collects a death benefit. That money can be used to help a business replace lost revenue during the search for a replacement.

28 InsuranceNewsNet Magazine » May 2023 LIFE
Source: Benchmark International

Business owners need help in planning for continuation

1. The majority of a business owner’s wealth is tied up in their business. Typically, about 90% of a business owner’s wealth is in their business.

2. Only about 30% of family-owned businesses survive the second generation, about 12% survive the third generation, and about 3% survive the fourth generation.

3 Over 50% of business owners will try to sell the business themselves.

4 50% of agreed deals never close due to the deal not being able to get through the due diligence stage.

3. Are they planning their exit already?

For most business owners, it feels strange to think of leaving the company when they’re just setting out or still in the midst of growing it. Even so, they should start planning their exit from Day One. Many owners, for example, will want to draw income from the business for their own benefit throughout their working life. But when it comes to sale, this can make it harder to prove the company’s value. Again, a good option here (especially for those not looking to sell for many years) is to use a key person life insurance policy. Over time, this will allow them to build a substantial cash value in a tax-optimal way. It will also make the business more attractive to buyers because it offers reassurance that if a key person were to walk away after acquisition, the policy could help fund a buy-sell agreement or contribute toward the cost of recruiting a successor.

4. Are they saving for retirement?

Running a small business is hard work, often leaving little time to think about anything else! Many owners may therefore

forget there’s more to life — and personal finance — than business, neglecting the crucial need to create economic value for themselves outside their company. A large majority of business owners don’t even save regularly for retirement, relying instead on their business as their biggest asset.

Yet ideally, owners should build a diversified financial portfolio that ensures they’re financially well prepared for exit no matter what. Whether it’s through tax-efficient savings vehicles, retirement accounts, solid insurance coverage or personal assets not tied to the business (such as real estate), it’s vital to ensure owners are actively planning for life after work.

5. Have they determined a valuation?

A key aspect of any exit strategy is the business valuation, so owners should consult a qualified advisor to determine this. There are also transition managers whose role is to assist sellers with their business exit strategies. Even the smallest companies can find buyers if the business is in a position to transfer value to a different owner — but this transferability of value is key. Businesses for which success

hinges on the unique drive, talents or social relationships of a single individual often don’t meet this standard, making a sale more unlikely.

Of course, there are many other ways small-business owners can build assets and cash value over time. It’s the advisor’s job to lay out those options and help the owners decide which one (or more) best suits the unique needs of their lifestyle and their company. While the answer to these five questions may be different for every small-business owner, what’s invariably true is that by discussing their exit and key person strategies with them now, we can significantly improve the likelihood of their leaving their company exactly how they want to in future.

Perry Goldschein, J.D., is a financial professional with Equitable Advisors. He may be contacted at perry.

Source: Benchmark International
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Annuity sales boom expected to continue, LIMRA says

Annuity sales busted through the $300 billion ceiling in 2022, smashing records on the way to nearly $313 billion in sales.

Expect those numbers to continue, said Todd Giesing, assistant vice president, LIMRA Annuity Research.

Baby boomers are continuing to age and looking for guaranteed income, so that customer base keeps growing, he said.

“For most product types, we look at the demographic there, and as we move forward, there’s simply going to be more Americans in those traditional retirement ages,” Giesing explained.

LIMRA is forecasting a small annuity sales dip in 2024 to $280-$300 billion, which is still higher than any pre-2022 year. From 2025-27, LIMRA projects $300 billion-plus in annual sales.

However, the plaintiffs’ funds were “never moved back to a blend of dividend stocks and bonds as disclosed until later in 2021, if ever,” the lawsuit reads.


are the greatest MYGA sales have been since Wink began tracking sales of the products in 2015.

“We’re excited for the future of this industry,” said Ryan Lex, executive vice president and chief distribution officer at Ibexis. “What we saw in 2022 was nothing short of amazing. The entire annuity space right now is on fire in a good way.”


A group of nine Texas plaintiffs claim they were misled by the illustrations for a fixed indexed annuity sold by Lincoln Financial. The group seeks class-action status for their lawsuit filed in federal court.

Plaintiffs say they signed a fixed indexed annuity contract with Lincoln in February 2020 expecting the consistent 6% gains illustrations showed. FIAs are popular with consumers because the 0% floor means they cannot lose money.

The FIA was tied to the 1-Year Fidelity AIM Dividend Participation Index. The plaintiffs say their actual returns were zero or near-zero for several years.

The lawsuit further claims that plaintiffs’ funds were moved out of the index and into Treasury securities after the market collapsed briefly in March 2020. The market rebounded quickly from that COVID-19-influenced setback and exceeded a 16% return by the end of 2020.

Lincoln did not respond to a request for comment.


Nearly all annuity lines are selling well, but one stands out above the others: multi-year guaranteed annuities.

MYGA sales more than doubled between 2021 and 2022. Experts point to the combination of a record-breaking drop in the bond market and the worst equity performance since 2008 with a rising interest rate environment.

Fourth-quarter sales were up 29.6% when compared to the previous quarter, and up 216.8% when compared to the same period, last year, Wink reported. MYGAs have a fixed rate guaranteed for more than one year.

Total 2022 MYGA sales were $103.7 billion, an increase of 105.5% from the previous year. This quarter and this year


The criminal trial of the Florida-based, self-styled “Annuity King,” Phillip Roy Wasserman, charged with annuity fraud and running a Ponzi scheme, was expected to continue into May.

Wasserman told InsuranceNewsNet that his defense team submitted a witness list of 104 names and they expect to call about 60 to testify. Wasserman was initially indicted in June 2020, but the government filed a superseding indictment in November of that year. Prosecutors allege that Wasserman led a $6.3 million financial fraud.

The three most serious charges – wire fraud, mail fraud and conspiracy to commit wire and mail fraud – all carry maximum sentences of 20 years. Wasserman maintains his complete innocence.

“We have absolute proof that the government misrepresented the numbers, but even if you take their numbers at face value, the case is a joke,” he said via email.

30 InsuranceNewsNet Magazine » May 2023
Our industry must work together to make it possible for more women to achieve financial and retirement security.
Terri Fiedler, president,
retirement services at Corebridge Financial
Source: Hearts & Wallets Only 43% of households nationally say they have a retirement plan in place and are contributing regularly.

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Explaining the nuances of annuities to clients

Clear communication and understanding the implications of annuities for clients of different income levels will help you match the right annuity to your clients’ needs.

In 2008, when the U.S. was navigating the Great Recession, annuity sales set a record when they reached $265 billion. That record was broken last year. Driven by market volatility and concerns about a possible recession, annuity sales surpassed $310 billion in 2022.

As worries about a recession linger, should advisors encourage their clients to join the trend and add annuities to their portfolios in 2023? The answer to that question, just like annuities themselves, is complicated. Advisors who weigh the value of annuities for their clients in the current investing landscape should consider their clients’ goals and understand the risks involved.

Carefully consider clients’ overall goals

Annuities are a great investment option currently because of the recent market downturn, which has been exacerbated by a wave of technology company layoffs. Annuities offer the benefit of reducing risk by providing a steady income stream, thus making retirement savings more secure and less reliant on stock market performance. Additionally, annuities are tax-deferred, and many investment gains can be transferred into annuities without suffering any taxes or penalties.

However, some clients may have investment goals that are not supported by the characteristics of annuities. For example, clients with short-term needs might prefer to invest their money in risky assets such as stocks, bonds or mutual funds with the potential for higher returns than the fixed rate offered by

most annuity products. Also, some clients with financial security simply want access to their savings and do not want their funds locked up in an irrevocable contract such as an annuity plan.

Another factor to consider is that annuities reduce liquidity. Clients who are heavily invested in annuities may not be able to access needed funds in a reasonable time


• Growth is tax-deferred.

• Guaranteed income for life.

• Keeping up with inflation.

• Protection from stock market volatility.

• Avoids probate.

• For long-term care needs.

• Medicaid planning.

frame if an emergency arises or other financial goals must be met. Cashing out annuities or transferring their holdings before a contract’s expiration date typically triggers high surrender charges or penalties.

Leverage indexed annuities to address inflation risk

One of the main risks for those using annuities as an income-producing option is inflation risk. Inflation decreases the value of funds over time, so it is important for investors to choose a form of annuity that can help them stay ahead of inflation, such as index-linked annuities or variable annuities linked to equity indexes.

Index-linked annuities provide a rate of return that is baked into a stock market index. Because they establish limits on potential gains and losses, index-linked annuities involve less risk than do non-annuity index funds. However, those limits could also keep investors from

achieving the returns one might receive from traditional index funds.

When recommending index-linked annuities or variable annuities linked to equity indexes, there are several factors that should be considered. They include the participation rate, loss floor, return caps and minimum guaranteed return, which could provide a profit even when the index shows a negative return. Advisors also should consider whether indexed annuities include provisions to lock in gains periodically, which can help investors preserve market gains in times of market volatility.

Clearly communicate the components of annuities

Annuities are complex investment instruments that comprise many moving parts. In order to help clients understand the nuances of annuity investing, here are the main components that should be explained.

» Fees: With any annuity product, buyers should pay special attention to the associated fees. It is important for advisors and consumers to be aware of all the fees that will be charged and to ensure that fees are reasonable, transparent and clearly outlined before making a purchase decision. Advisors should also examine the history of annuity fees from specific providers in order to get an accurate understanding of what clients can expect in terms of the costs that will be associated with the purchase.

» Surrender charges: Consumers should understand how surrender charges apply to their particular annuity and make sure that these expenses won’t impose major limits or restrictions on liquidity or access to funds. When researching potentially suitable annuities, consumers and advisors should look for products with flexible surrender charge schedules, which can include no longterm penalties or no additional costs associated with early termination.

32 InsuranceNewsNet Magazine » May 2023 ANNUITY

» Liquidity: Advisors should pay special attention to the degree of liquidity provided by a particular annuity so that consumers understand exactly how soon they could access their money in an emergency. Some annuities provide instant liquidity, while others may have more severe limits on when cash can be accessed through loan provisions or partial withdrawals. Knowing this ahead of time helps advisors and clients adequately plan for potential market movements.

» Inflation protection features: Most annuities offer protection against inflation, a feature that has become more common over time due to increasing consumer demand for good retirement income streams. Advisors should pay close attention to the various inflation adjustment indices used by different companies’ products in order to find the option that best aligns with a consumer’s financial goals and time frame.

» Tax benefits: Understanding what

savings and tax advantages can be taken advantage of through any specific product will help determine which option will save more money given its potential risk/return profile as well as any other available features.

Understand annuity implications for different income levels

Annuities can be beneficial for anyone, regardless of their income tax bracket. The main benefit of an annuity is income protection, which any investor can leverage for retirement planning. Generally, annuities are most beneficial for those who are not able to adequately save for retirement on their own or secure other forms of income.

However, the tax-deferral benefits of an annuity make it particularly advantageous for those in higher tax brackets because it empowers them to earn more cash value and lower their overall taxable income. Those in lower tax brackets may not

realize as much tax savings from investing in annuities and may want to consider other forms of investments with smaller fees and the potential for greater returns.

Overall, annuity benefits are most helpful for those nearing retirement who want a guaranteed stream of income for life. However, an annuity also can be beneficial for other clients, such as those needing life insurance coverage and those wanting to set aside money for future goals such as college tuition. For any investor, annuities can help protect against market swings, allowing the investor to have peace of mind knowing that their money is secure no matter what market conditions exist at any given time.

If your clients are looking for guaranteed income, accumulation potential or to leave a legacy, look to American Equity for a solution.

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Small and midsized businesses offer benefits at record levels

A possible recession and continued market volatility aren’t deterring small and midsized businesses from providing employee benefits at record levels, according to a survey by Principal. Business owners are offering benefits at the highest levels seen since 2008, said Nate Schelhaas, senior vice president for benefits and protection, and head of business owner segment at Principal.

Health and wellness offerings have grown significantly, added Schelhaas. These include comprehensive health, health savings accounts, employee assistance programs and emotional/mental wellness programs. Comprehensive health insurance remains the most common solution (offered by 62% of participants), the survey showed. EAPs and emotional/mental wellness programs expanded year-over-year. There was also significant growth in the number of owners who are offering a 401(k) plan and HSAs, which have grown by10 percentage points since last year.

There are many reasons for this rise in employee-benefits offering, explained Schelhaas. Business owners experienced significant competition for labor last year and recognized that benefits help them attract and retain the right talent. For example, he said, record levels (over 70%) of owners said that offering benefits improves workforce retention, recruiting and productivity.

benefits by providing inclusive benefits, flexibility and behavioral health care.

3. Employers are thinking about value when looking at increased cost growth.


employers, the survey said. This is in contrast to the 58% of Generation X employees and 49% of baby boomer employees who have used the benefits.

More insights from the survey include:

• Generation Z expects access to mental-health services and any historical barriers to access to be fixed. Leveraging mental-wellness resources is normalized for this generation.

• Millennials were raised to believe that mental health challenges are problematic but fixable.

• Generation X recognizes that access to mental health services can be problematic but just tries to get through it.


Inflation and a tight labor market are challenging employers to provide the best health care plans for their workers’ needs without further burdening those same workers with higher costs. On top of that, workers are demanding their employers provide them with more support for mental health and a greater work/life balance.

Those were among the key takeaways from Mercer’s 37th national survey of employer health plans. Health plan strategy reflects three major themes, Mercer said. Those themes are:

1. Inflation is driving health care costs and making affordability an even bigger concern.

2. Employers want to enhance

Employers will continue to prioritize enhancements to workplace benefits while minimizing cost-shifting to workers, the survey showed, with 64% of employers saying they plan to enhance benefits in 2024 while 48% will not raise any cost-sharing.


A majority of Generation Z and millennial workers say it’s “very important” for their employers to provide them with mental-wellness benefits, according to a survey by Securian Financial.

Fully 73% of Generation Z employees and 74% of millennial employees have utilized mental health benefits offered by their

38% of employees said they have not used any of their workplace mental-wellness benefits. 67% of them said they don’t believe they have serious enough issues to use the services.

Source: Securian Financial

• Baby boomers were taught to tough it out and not talk about mental health challenges.


As inflation has soared to historic highs, health care costs remained relatively stable, rising about 2% annually. But it appears that medical inflation is on the way up as demand for non-COVID-19-related health services recovers and health care providers seek to make up for rising labor costs incurred during the pandemic.

Prices for hospital services began to heat up in December and increased faster in January, to an annual rate of 5.5%, according to the Federal Reserve. Consumer cost increases for nursing homes ran at a slightly higher rate of 5.7% over the past year; dental services rose even faster.

What are some of the factors driving these higher costs? Hospitals are pressing for higher payments as their long-term contracts with medical insurers come up for renewal. In addition, greater market concentration caused by chains buying out smaller hospitals is helping to push medical inflation upward.

SOURCE: Urban Institute

34 InsuranceNewsNet Magazine » May 2023
health insurance premiums for ACA benchmark plans increased by an average of 3.4% in 2023. DID YOU
1. Dental insurance. 2. Maternity leave. 3. Paid family and medical leave. 4. Vision insurance. 5. Accident insurance. Source: Principal Employers’ top strategies for health care over the next 5 years: 1. Enhancing benefits (85%). 2. Managing high-cost claimants (78%). 3. Expanding behavioral health care access (73%). 4. Improving affordability (68%). 5. Managing specialty drug costs (66%). Source: Mercer survey
I’m very worried we’re looking at a big jump in [health insurance] premiums and out-ofpocket costs.
— Glenn Melnick, University of Southern California
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Help employers provide workers with benefits they actually want

The right workplace benefits help retain workers and improve the employee experience.

In the past few years, the labor force has been significantly bolder about stating their wants and needs at work. Plenty of changes in professional environments have proved this to be true. More options in terms of remote work, flexible hours and unique benefits have given workers more fluidity and negotiating power with employers. Employers are becoming more aware of the extra effort they must put into improving the employee experience and retaining top talent.

Employees have come to expect several workplace benefits as standard. These benefits include health insurance, life insurance, 401(k) plans and paid time off. However, to remain competitive in this changing work landscape, companies must start thinking outside the box and offering more unconventional and enticing benefits if they hope to attract

and retain top-notch employees. If your employer clients are not making changes now, their employee retention rates will be impacted.

Nontraditional employee benefits

When we think of nontraditional or unconventional benefits, our minds may jump to pingpong tables in the break room or Fridays when people are permitted to wear jeans. However, the unconventional benefits that employees actually want likely go beyond these surface-level office perks.

You and I both know that no one stays with an organization because of a pingpong table. The new world of employee benefits taps into what employees truly care about: work/life balance, a positive work culture, and health and wellness needs.

The new benefits that companies can offer their employees are limited only by creativity. Some unusual benefits that companies have tried include pet-friendly offices, vacation stipends, nap rooms and coverage for fertility treatments.

Many nontraditional benefits, such as gym memberships and subscriptions to mindfulness apps, speak to higher demand for attention to employee wellness and sound mental health.

To remain competitive in this shifting workplace, companies must consider these nontraditional benefits or run the risk of falling short of employee expectations and losing talent to more forward-thinking companies.

What do employees care about?

The number of Generation Z workers is growing. By 2025, approximately 27% of the workforce will be Gen Z, according to the World Economic Forum. This generation has upended the workplace.

Whereas the millennial generation placed a strong emphasis on recognition and finding meaning in their work, Gen Z was raised on technological advancements. They are more demanding and more aware of the benefits that come from tech, a healthy work/life balance and remote work options. These are workers who have taken online classes in college, know how to run a business

36 InsuranceNewsNet Magazine » May 2023

from their phones, and understand the concept of self-care.

Gen Z also strongly cares about having a positive impact, refining their skill sets and facing challenges head-on. They are a “work hard and play hard” generation that values and prioritizes mental wellness, and they are also incredibly “plugged in.” Catering to this rising generation requires that companies first understand that the workforce is changing, and then take steps toward meaningful actions that speak to those changes.

Giving these tech-savvy and selfaware Gen-Zers what they expect can solidify the company’s relationship with those workers and garner the best work from them.

Offering unique benefit packages along with the standard benefits that all employees expect is a win-win for both employee and employer. Businesses will get the most loyalty and productivity from employees who have a high level of job satisfaction — job satisfaction that comes from good pay and great benefits.

Both millennials and Gen Z highly value flexibility, a value that became apparent to employers during the pandemic. While remote work existed before the pandemic, the stay-at-home orders (and the rise of cloud computing and videoconferencing) drove home the point that most jobs could stand to be far more flexible and still remain productive. Companies offering hybrid or remote positions as a benefit are likely to be successful in attracting top talent.

The days of employees staying with a company through thick and thin their entire working lives are almost completely gone. In most jobs, the golden ticket of old — a pension — no longer exists. Companies will have to sweeten deals in order to retain a generation of workers who see no issue with being transient in search of better opportunities.

The impact of better benefits

Companies that place a strong emphasis on employee engagement and a wide array of benefits hold the best retention rates. Companies that believe the bare minimum in benefits should be acceptable and thereby foster a culture of low morale and a toxic environment are likely to see their bottom line plummet as their employees hit the road.

Forty percent of employers say they believe workers leave their job to find employment that offers better benefits.

More than half of American workers (54%) report being content with the benefits their current employer offers.

One in 10 workers would take a pay cut to have access to better benefits.

More than 30% of 18- to 41-year-olds are most concerned with having pet insurance available as a benefit.

Nearly 40% of 42- to 57-year-olds are most likely to want mandatory paid time off from their employer.

More than 80% of employees older than 42 are looking for roles that include employercovered health care.

Source: Forbes Advisor

Companies that have pivoted heavily into employee retention programs through beefing up their benefits packages have reaped significant rewards. One example, Charles Schwab, offers incredible financial-based benefit packages to their employees, including a robust bonus plan and complimentary financial advisors.

Buffer, a social media management company, holds an impressive 94% employee retention rate. They have laser-focused on creating a “fulfilling” work environment that includes sabbaticals, free books and remote work options.

These companies and others that rode the wave of changing employee expectations have found that staff productivity and, in turn, profits have continued to climb. This illustrates the positive impact of a robust benefits system, especially one that includes some nontraditional options.

Selling the idea of the nontraditional benefit

When approaching companies with benefits packages, you will want to show them the numbers on how these packages — along with nontraditional choices — positively affect their bottom line. Decisionmakers want numbers and statistics that

show how offering employees what they ultimately want helps the company.

As more attention is paid to how the workplace is changing and how employee wants and needs are shifting, companies will seek out benefits experts with something different to offer. They will want benefits specialists who are aware of the nontraditional offerings that elevate benefits packages beyond health insurance or a 401(k). Benefits specialists must make themselves aware of and study the countless options out there so they can educate and guide employers on how to best entice and retain talent.

There is no denying that the landscape of work looks radically different than it did even five years ago. Employees and job seekers have a lot of bargaining power with employers, more than they ever had before. Employers who are looking to keep their retention numbers high and thrill their employees will need to consider “outside the box” benefits to meet the needs of this new world of work.

Logan Mallory is the vice president of marketing at Motivosity. He may be contacted at


Employees cashing out 401(k)s risk a ‘danger zone’

The “danger zone” for employees fully cashing out of their retirement savings plans is 30-39 years old, according to a recent analysis based on more than 20 million Fidelity 401(k) participants.

The overall average age of Fidelity’s 401(k) participants is 44.6 years, and the average tenure on Fidelity’s platform is 8.5 years, the study showed. In addition, the average full payout (or “cash out”) was just $11,000 in 2022, but there were almost 1.1 million workers who took a full payout when they left their jobs.

The danger zone, according to the study, appears to be among participants who were 30-39 years old. Apart from those who had less than one year of tenure, the highest number of full payouts (nearly 70,000) occurred in this age range for workers who had 5-10 years of tenure.

Only 24% of pre-retirees think they have enough saved

How much is enough? Nearly one-quarter of working Americans between the ages of 60 and 67 believe they have enough money saved to support themselves after they stop working, according to Schroders.

Ready, set, CHAAARGE!

96% of Americans said credit card debt is their biggest financial concern.

Source: CFP Board

Working Americans at or over the age of 45 believe it will take $1.1 million in savings to retire comfortably; however, the majority of respondents (59%) expect to have savings of less than $500,000. Only 24% of respondents ages 60 to 67 said they had enough money saved, and 53% of older workers said they are concerned that financial stress will have negative impacts on their overall health.

Millennials are even more concerned than the generation ahead of them about their retirement readiness. Most millennials believe that the savings amount required for a comfortable retirement is slightly higher than older respondents said ($1.3 million vs. $1.1 million). However, only 29% of millennials said they believe they will reach $1 million in retirement savings. Millennials are also more concerned than seniors (64% vs. 53%) about financial issues impacting their health and quality of life.

Clear fees are No. 1

Americans cite “clear and understandable fees” as the No. 1 thing they want from financial service firms, with a higher importance placed on pricing considerations than at any time since 2010, according to a Hearts and Wallets survey.

The pricing of financial service firms continues to be murky for many consumers, the survey said. In 36% of saving and investing relationships with their financial service firms, customers do

65 percent against lifting retirement age for Americans in their 20s

A majority of Americans are opposed to raising the retirement age for younger Americans to shore up solvency for Social Security, new polling finds.

A new poll conducted by left-leaning firm Data for Progress, first reported by

Financial services MOST WANTED:

1. “Fees are clear and understandable.” (60%)

2. “Explains things in understandable terms.” (56%)

3. “Is unbiased, puts my interests first.” (54%)

4. “Provides clear, useful statements.” (53%)

5. “Has made me money.” (52%)

Source: Hearts and Wallets

Semafor, found that 65% of Americans surveyed were against raising the retirement age for Americans currently in their 20s.

By contrast, the poll showed bipartisan support for upping taxes on the wealthy to extend solvency for Social Security, as proposed in the Social Security Expansion Act, which was introduced by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), among others, earlier this year.

“The bill would also increase benefits for all recipients by $2,400 per year. This would be paid for by increasing taxes on wealthy Americans,” respondents were told.

The polling comes as the matter of solvency of Social Security has drawn more attention on Capitol Hill over the past few months.

not know how they pay. Twenty percent of relationships are reported as free.

“Free is clear on the surface and helpful for trial but can leave customers wondering how your firm earns money,” Laura Varas, CEO and founder of Hearts and Wallets, said. “Only 1 in 4 (27% of) customers understand ‘very well’ what their providers do to earn money, with little improvement over time.”

Financial facts and figures powered by
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Help clients achieve financial balance during all life stages

A series of strategies to help clients attain their goals, no matter their age.

hile each decade of life presents a new set of financial obstacles and opportunity for financial growth, what rings true for clients of all ages is that financial balance and compromise must be equally made. The wealth advisor’s role is to help clients find this balance within their finances and create a backdrop for them to make educated decisions at all stages of their life.

Here are some of the practices I’ve found work best when helping my clients navigate their finances. Collectively,

these strategies can work collectively to help clients build positive habits and make consistent progress toward the life they want to live.

20s: time is their greatest asset

WMany 20-year-olds who are managing their money for the first time find themselves overwhelmed by this sizable new responsibility. Between paying back student loans, developing their career, and finding a balance of saving and spending, it is easy for young adults to feel lost. However, members of this age group commonly overlook the fact that they hold the greatest asset: time.

The sooner an individual in their 20s starts saving for retirement and investing their money, the more opportunities they

will have to grow their wealth.

The first step a financial advisor should take when advising advising clients is to ask about their goals. Next, consider talking through the estimated cost of their desired lifestyle and what actionable steps are needed to secure this flexibility.

A recent Northwestern Mutual study found that 57% of people prioritize paying down debt over contributing to their savings account. Although paying down debt is important, financial advisors can encourage their clients to plan for their future strategically by taking a balanced approach to their finances.

For example, paying off student debt will happen over time, but it should not outweigh the importance of creating an emergency fund or

40 InsuranceNewsNet Magazine » May 2023 ADVISORNEWS

High anxiety over finances

A recent study showed a majority of consumers of all ages are anxious about their finances, particularly Gen Z and millennials.

Communicating with clients through a positive lens that is focused on progress planning versus perfection planning is a helpful approach to identify and build their good habits.

50s: portfolio diversification is key

Although portfolio diversification is important during any stage of life, it should be the focus when advising a client who is in their 50s. A financial advisor should discuss managing risk and ensuring there is an adequate mix of guaranteed and variable income streams. At this stage in life, a client’s portfolio should reflect a more conservative approach, and the stocks and bonds should be diversified across asset classes.

30s: keep long-term financial goals in sight

By the time an individual reaches their 30s, they may have experienced career milestones such as salary raises and promotions, or they may have experienced significant life changes such as marriage and children. A financial advisor should approach this age group by discussing the client’s goals for the future and reevaluating their current budget.

The next step is to encourage individuals in this age group to position themselves for long-term success by increasing contributions to their 401(k)s as their salaries grow and to rebalance their investments as needed. This is also a great time to introduce a Roth IRA to support additional savings with unique tax attributes.

Additionally, if these individuals are planning to expand their family, a financial advisor should discuss the benefits of a 529 account and how to fit this addition into their savings framework. It is essential for the advisor to encourage the client to strike a balance between maintaining their emergency savings fund, contributing to their retirement savings and starting a higher-education fund for their children.

Incorporating a multi-pronged approach of financial strategies with different tax characteristics and risk profiles allows individuals to arrive well positioned for their education and retirement funding goals with options and flexibility.

40s: retirement strategies

In an ideal world, an individual in their 40s has paid off their student loans, regularly contributes to their 529 account, has an estate plan in place and is on track for retirement.

However, a Northwestern Mutual study found that 4 in 10 people don’t think they’ll be financially ready for retirement. Additionally, that same study revealed one-third of Americans predict there is a 50% chance they’ll outlive their savings.

When advising this age group, an advisor should work closely with the client to understand what their retirement age goal is. If this is not realistic within the individual’s existing financial framework, an advisor can consult with the client on steps to better prepare for retirement. This includes advising the client on the lifestyle adjustments, if any, that must be made. Ultimately, it is up to the client to decide if they want to make changes to their current lifestyle to meet their retirement goal or retire at a later age.

Additionally, an advisor should help their client mitigate risk by identifying any variables that can potentially derail a well-funded financial plan. The goal is for the client to establish a sufficient foundation to lean on during times of market volatility.

A financial advisor should also discuss the client’s desired approach for long-term care planning. Although this can be a difficult conversation, creating a plan before something happens is essential to help protect the client’s savings against future unforeseen medical costs.

It’s important to recognize that no strategy on its own is enough to help an individual arrive well positioned down the line. Sustainable wealth is accumulated by optimizing various financial strategies and then using them as a road map to create a flexible future.

A well-thought-out financial plan will serve as a backbone to ensure that an individual’s finances are strong enough to withstand the unpredictability of the markets so the client can have peace of mind and enjoy the life they built for themselves.

All U.S. Adults 18+ Gen Z Millennials participating in a company-sponsored 401(k) match.
54% 66%
Source: Northwestern Mutual

How to love your practice — and how to make it love you back

An author and coach said serving clients “is a reflection of love.”

Financial services is the hardest career in the world — and that’s why you should love it.

Joe Templin is an advisor who is co-founder and president of The Intro Machine. He also is the author of Becoming an Introduction Machine, in which he discusses how to create a strictly introduction-based practice in 90 days. He described how to build a practice you love — and that loves you back — during a recent webinar.

“Serving your clients is a reflection of love,” Templin said. “I want you to love your business and to build a business that loves you back.”

Templin called the financial services business “the hardest career in the world.

“We work with people who don’t want

to talk to us, talking about stuff they don’t want to do, to then give us money that they want to spend on anything else,” he said. “Then we’re with them at their darkest time.

“But that’s exactly why you should love it. Because we’re there with them through the rough patches, and we’re there for the best parts of their lives. I get calls from kids who say, ‘You don’t know me, but you worked with my mom and dad, and I want you to know I just graduated from college because of you.’”

Templin told the audience that “if you’re not quitting this business every single day for your first couple of years, that means you’re not loving it hard enough.

“Because love and hate are twin emotions. There will be times when you hate this, but I want you to see why you should absolutely love being in financial services.”

There are several reasons not to love the business, Templin said. They include:

» Paperwork.

» Decreasing commissions.

» Lawsuits because of bad actors.

» Out-of-control compliance.

» Decline of training and standards.

But there are reasons to love the business as well, he continued.

» COVID-19 increased consumer awareness. Templin quoted the results of a 2021 Insurance Barometer survey that showed about 40% of the American population believe they need to buy life insurance or increase their coverage. “That’s more than 100 million Americans who said, ‘We want to buy your product; sell me life insurance.’ How many of you went out and sold 100 million policies? None of us. You have to be ready to sell it.”

» Only about one-fifth of those in the workforce own individual disability insurance, according to the Insurance Barometer, and that percentage continues to fall. “That means 80% of the workforce doesn’t have DI. That’s more than

42 InsuranceNewsNet Magazine » May 2023

200 million people who should buy it,” he said.

» Millennials want guaranteed income in retirement. “I think you might have a product in your arsenal that gives guaranteed income — it’s called an annuity,” he said.

» Generation Z is saving more than members of any other generation. “Because they lived through two recessions,” Templin said. “Where can they put their savings? We have some places.”

» Of baby boomers over age 65, 75% will need long-term care in their lifetime. “This is an opportunity,” he said.

» The greatest transfer of wealth is expected to take place over the next 25 years. “We’re talking about $30 trillion from one generation transferred to about 200 million people from the next generation,” he said. “That means everybody is a client.”

» Fewer agents per person. “That means there’s more business for you to write! Everybody wants you, and there’s nobody to take their orders,” he said.

» Technology leverage. Technology makes it easier to serve clients and write business.

» Greater awareness of the need for financial education. “There is so much demand for good guidance,” he said.

» The graying of the profession. The average of age of an advisor is around 55 years old, Templin said. “If you have a 22-year-old coming into your business, they are getting ready to inherit all this. And if you’re that 55-year-old advisor, you can still have 20 years of great production left. Find a young person to mentor. When they’re 35, they’re ready to take over, and you still have a share of the business for the next 15-20 years.”

The business of real love

“Our business is the business of love — real love,” Templin said.

He described love as “doing the right thing for others.”

“You advocate for the best version

of others. You say to your client, ‘That 2-year-old in the corner can’t say to you, ‘Mom, I think you should buy that life insurance because when you are in that car accident six months from now, I’m going to be OK and still go on to college.’ That 2-year-old is not saying that — you have to advocate for them. And we advocate for our clients.”

Finding ikigai

Ikigai is a Japanese concept that means “your reason for being.” Ikigai occurs when passion, mission, vocation and profession come together.

3. After-action debrief. After a client meeting, look back on what you can improve next time. “When you are good at things, you enjoy doing them more,” Templin said.

4. See more clients. If you aren’t seeing a lot of clients, you won’t know whether you like the business or not, he said. “If you’re a new agent and you’re keeping 1518 appointments a week for six months, you will love this business.”

5. Pursue knowledge. “Having more knowledge lets you find cooler things,”

Templin urged his audience to find their ikigai.

Templin listed several ways to “build the business you love that loves you back.”

1. Game time is not practice time. Too many people wing it with a client or prospect, he said. Prepare and practice what you will say in a phone call or in a meeting so many times that it becomes natural to you.

2. If you are in your first few years in the business, put practice time on the calendar. Spend 30 minutes a day practicing a skill. At the end of the year, that will total 190 hours of practice.

he said. He recommended learning about something not related to work in addition to studying for professional designations. “Having something you’re working at that’s slightly difficult and non-work-related will help you recharge your energy.”

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


Stuck in the middle

Editor’s Note: This is the second of a three-part series on the state-based insurance regulatory system. This month’s story summarizes the issues surrounding state insurance commissioners and the differences between elected and appointed systems.

In October, Treasury Secretary Janet Yellen announced that the Federal Insurance Office (FIO) would collect climate-related claims data from insurers.

The effort came weeks after Hurricane Ian smashed the Florida coast, with projected insured losses of more than $60 billion, according to trade group Insurance Information Institute.

More importantly, the data call provided the FIO with a rare opportunity to play a significant role in the insurance rulemaking cycle. Or, to fulfill its charter as spelled out in the Dodd-Frank legislation that created the FIO in 2010.

The FIO sought five years’ worth of ZIPcode-level data from 213 private insurers, collectively representing at least 80% of the homeowners’ insurance market in each state.

The plan encountered immediate resistance. Trade groups, insurers and the National Association of Insurance Commissioners all wrote letters objecting to the data call.

Oklahoma Insurance Commissioner

Glen Mulready added his own letter admonishing the FIO for not giving state regulators more time to respond with the data. Mulready reminded the FIO that state regulators are the final arbiters of insurance rules.

“FIO may collect data directly from insurers only after FIO ‘determines’ that the data is not available,” he wrote.

And so it goes. For the entirety of its 12-year existence, the FIO has compiled annual reports and appeared before a congressional committee every so often but has had muted real-world relevance in the U.S. regulation of insurance.

In 2019 and again two years later, a group of Republican senators filed a bill to eliminate the FIO. The opposition reliably returns to the same thread: The states control insurance regulation.

“Our bill will empower states and defend their proper authority to regulate the insurance industry,” Sen. Ted Cruz, R-Texas, said of the legislation.

State territory

In 1869, the Supreme Court held, in the case Paul v. Virginia, that “issuing a policy of insurance is not a transaction of commerce.”

As a result, states were left responsible for the taxation and regulation of insurance. That led to the formation of the

National Insurance Convention in 1871, which later became known as the NAIC.

In 1944, the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the commerce clause in the U.S. Constitution and that the federal antitrust laws applied to the insurance industry.

Very quickly, Congress passed the McCarran-Ferguson Act, which essentially returned the regulation of insurance to the states.

All was relatively good until the new century dawned. By the mid-2000s, insurers were distributing ever more complex indexed universal life insurance and variable annuity policies that taxed state insurance departments. Then the mortgage bubble burst and created the 200809 economic catastrophe.

Cut to 2010, and Congress responded with the Dodd-Frank Wall Street Reform and Consumer Protection Act. Although laser-focused on Wall Street and big banks, legislators snuck in creation of the Federal Insurance Office. The NAIC supported the creation of the FIO in testimony to Congress.

The FIO was handed a set of nebulous duties to:

» “Advise” the Treasury Department on insurance issues.

44 InsuranceNewsNet Magazine » May 2023 the Know In-depth discussions
with industry experts
Twelve years after it was created by Dodd-Frank, the Federal Insurance Office is still looking for its long-term role in the insurance regulation landscape.

» “Monitor all aspects” of the insurance industry.

» “Identify issues or gaps” in the regulation of insurance that could contribute to a systemic crisis in the insurance industry.

» “Receive and collect data” on and from the insurance industry.

Dodd-Frank also assigned international insurance issues to the FIO and, under Director Michael McRaith, that is where the agency focused much of its time and efforts in the initial years.

The International Association of Insurance Supervisors was just beginning a lengthy project to develop global international capital standards.

“There was a real push to create this sort of Team USA approach with the NAIC, the Federal Insurance Office and the Federal Reserve,” recalled Birny Birnbaum, executive director of the Center for Economic Justice. “There was also a set of issues with covered agreements, basically, agreements between the U.S. and the EU at the time regarding insurance and reinsurance.”

Louisiana Insurance Commissioner Jim Donelon served as president of the NAIC in 2013. The debate over capital standards turned into a yearslong battle, he said.

“Our greatest challenge was international and the effort of the Europeans to impose their Solvency II-based system of solvency regulation as the international standard,” he recalled. “We were adamantly pushing back to keep our riskbased capital standard as at least equivalent, if not accepted as the standard.”

The FIO ended up producing several concepts that were ultimately adopted by the NAIC, such as the covered agreements and permitted practices, an accounting practice that departs from the NAIC Accounting Practices and Procedures Manual and state-prescribed accounting practices.

First significant US study

The FIO’s first major initiative in the U.S. insurance market came with a 2017 automobile insurance study looking at affordability and availability.

The study found that 6 million people live in ZIP codes where auto insurance is unaffordable, including more than half of

the residents of underserved ZIP codes in five states: Michigan, New Jersey, Rhode Island, New York and Delaware.

Consumer advocates are growing frustrated with the slow updating of that study, announced in 2021. FIO Director Steven Seitz recently testified at an open meeting of the Department of the Treasury’s Federal Advisory Committee on Insurance, saying the auto study update remains a high priority for the agency.

Otherwise, FIO’s main contribution to the insurance world is its Annual Report on the Insurance Industry — a 65-page effort in 2022 — followed by an appearance before the Senate Banking, Housing, and Urban Affairs Committee.

In 2017, the Bipartisan Policy Center recommended a bigger role for the FIO. A think tank formed in 2007 to combine Republican and Democratic ideas, the BPC assessed the fallout from the 2008-09 financial crisis via its Financial Regulatory Reform Initiative. It included a study of the insurance industry regulatory framework as part of that initiative.

The BPC, which declined to make someone available for this article, concluded that the FIO is underutilized. It recommended that Congress elevate the FIO to a bureau within the Treasury Department or make it an independent agency outside of Treasury.

Additionally, the FIO “should be funded by assessments of U.S. insurers and led by a director with a six-year term who would be appointed by the president and confirmed by the Senate,” the report concluded.

The BPC study is peppered with recommendations for an expanded oversight role for the FIO, such as:

“Congress should request a report from FIO that assesses state legislative funding of [insurance] departments and recommends appropriate levels of resources. FIO should then provide Congress with supplemental reports ‘scoring’ the states on the extent of their achievement of these goals.”

Risky concerns

When given a forum to make bold policy statements on the many pressing

insurance issues, Seitz has thus far passed. In September, the FIO director frustrated several senators seeking answers during a Senate banking committee hearing.

The growth of private equity control over insurance assets is one of the biggest issues confronting regulators. Firms such as Apollo Global Management are investing billions of dollars from insurance funds in riskier investments. That makes regulators nervous.

Sen. Elizabeth Warren, D-Mass., sought reassurances from Seitz on the threat posed by private equity. In a September 2021 report, the FIO acknowledged that private equity investment in insurance brings with it more risk.

“Do you still agree with what you said?” Warren asked.

“It’s an issue that we are focused on in our office and we appreciate the changing investment portfolio of those companies,” Seitz said.

“In other words, there’s more risk?” Warren asked again.

“It’s an area of increased focus for our office,” Seitz said before Warren cut him off.

An exasperated Warren concluded her question time shortly thereafter by imploring the FIO and the NAIC to act to address private equity issues. “Enough studying,” she said. “It is time to act.”

Sources throughout the insurance industry say there is next to no chance that the federal government will achieve any takeover of insurance regulatory power anytime soon. It seems equally unlikely that the FIO is going to disappear.

Despite the anti-government fervor in some quarters of Congress, the bills to eliminate the agency have gone nowhere. The office will focus on several key areas, Seitz told senators, including the impact of climate change on insurance.

“FIO has a significant role to play,” Seitz said.


Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. Follow him on Twitter @INNJohnH.

May 2023 » InsuranceNewsNet Magazine 45

SECURE 2.0 provides new opportunities for advisors

Clients of all ages can benefit from the provisions of this bill, but they need you to help them take advantage of these features.

The year 2022 wrapped up with some significant retirement reforms known as SECURE 2.0. This legislation is a win for holistic financial security professionals across the board — leaders, advisors, brokerage firms and everyone in between. Many of the 90+ provisions encourage Americans and businesses to start saving earlier, saving more and saving more often — so that Americans can accumulate more retirement wealth and advance financial security. Here are just some of the most impactful provisions in SECURE 2.0:

» Increased the age to take required minimum distributions to age 73 effective now, and to age 75 in 2033, allowing more Americans to save more and build their retirement nest eggs.

» Increased catch-up contributions in employer retirement accounts from $7,000 to $10,000 to give more Americans, especially those nearing retirement, an opportunity to save more. Note that contributions must be made in the form of after-tax Roth contributions for those above a certain earnings threshold and becomes effective in 2025.

» Starting next year, beneficiaries of 529 plans have the flexibility to roll over unused balances, up to $35,000, into a Roth IRA and help kick-start retirement savings.

» Employees with student loans — whether these employees are professionals who accumulated excessive loans or recent graduates just starting a job — do not have to choose between paying off the student loan or contributing to a retirement

account. Starting in 2024, they can do both. Employee repayment of student loans will be eligible for an employer matching contribution to a retirement plan.

» Starting in 2025, it will be easier for long-term, part-time employees to participate in employer retirement plans by reducing the continuous time of employment from three years to two. This will allow employers to better retain their employees and permit more part-time employees to save for retirement.

» Penalty-free distribution from retirement plans to pay premiums on qualified long-term care insurance will provide flexibility for individuals contemplating holistic financial planning, effective 2026.

» SIMPLE, SEP and 403(b) plans progress more toward 401(k) retirement plans with increased contribution limits and availability of multiple employer plans.

» Auto-enrollment and auto-escalation starts in 2025 and will increase the number of workers saving for retirement.

With SECURE 2.0 now the law of the land, there are opportunities for financial security professionals to educate their clients and create new business strategies. The obvious opportunities lie with clients impacted in the following ways:

» Those near retirement where catch-up contributions, RMDs and long-term care

coverage might be needed.

» A young couple with a newborn or young child could benefit from a discussion on 529 plans and potential 529 rollovers into a Roth IRA. If the couple has student loans, the new employer matching contributions might be a windfall as the couple starts saving for retirement.

» Businesses can retain valuable employees in today’s economy and workforce environment by providing valuable retirement savings vehicles, even for eligible part-time workers.

As Finseca sees it, the passage of SECURE 2.0 was no small feat. Our members and government affairs staff worked with congressional decision-makers and tax law writers. Our alignment and strong partnership with sister trade organizations helped get SECURE 2.0 included in the final bill. The result further proves that speaking with one unified voice throughout the entire process produces tremendous results.

Again, SECURE 2.0 is a win for holistic financial security professionals across the board — leaders, advisors, brokerage firms and everyone in between. We hope you’ll share that success with your clients today!

Alex Kim is vice president, public policy, with Finseca. He may be contacted at

46 InsuranceNewsNet Magazine » May 2023
Finseca is the home of the top financial security professionals. This member-driven community serves as a credible source for the profession and provides exclusive access to the brightest minds in it. Many of the 90+ provisions encourage Americans and businesses to start saving earlier, saving more and saving more often.

Disability income insurance in a gig economy

Collecting the correct information about the gig worker’s health, occupation and income is crucial to getting them the right coverage.

Gig workers make up a growing portion of the workforce. During Disability Insurance Awareness Month, it’s important to understand the opportunities presented by the gig economy.

Your client’s health, occupation and earned income are the three pillars of the traditional underwriting process for disability insurance.

Health is obvious — does your client have a prior medical history that could influence the ability to secure disability insurance coverage? Things such as musculoskeletal issues or mental/nervous conditions for which they are currently receiving treatment? How about current medications or chronic issues that are problematic?

Occupation, again, is not hard to determine. Insurance carriers’ characteristics frequently determine the carrier of choice. Some carriers love to write policies on those individuals who take a shower before they go to work as opposed to the clients who take showers when they get home from work.

Earned income is the big issue disability insurance underwriters face with many gig workers. By definition, a gig worker is paid based on the completion of a project or task. They are not paid an hourly wage or salary. These individuals are considered quasi-independent contractors and are not subject to certain labor laws such as minimum wage or sick leave. Gig workers are required to provide their own health insurance and unemployment insurance and cover the employer portion of Social Security taxes.

Disability income insurance is intended

to insure an individual’s “earned income.”

For the gig worker, income will be defined by net income, after business expenses, but before taxes. For a gig worker with three to four years of history, this would not cause much of an issue. Stability would need to be demonstrated, along with solid validation that the gig worker is working a minimum of 30 hours per week.

For a field underwriter, the role of the agent is paramount. You will need to collect important data to assist the underwriter. Here is some information that is helpful to gather when working with the gig worker.

» Basic information: Name, date of birth, resident state, gender, nicotine use, other coverage currently in force.

» Work environment information: Current occupation and daily duties; hours worked along with where the client performs most of their duties; prior work experience.

» Financial information: Occupation and earnings from jobs prior to becoming a gig worker. Any prior education or training that is related to the gig work. Do they have a contract from the individuals or companies to whom they will offer their services? Providing this contract will be helpful for the underwriter.

» Medical information: Is the client currently on medications? Have they consulted a physician in the past five years? Height and weight information also would be helpful.

After you have gathered all this information, you then should share it with an underwriter prior to taking a formal application. Commonly referred to as an informal evaluation, this process will assist with any client conversations you have to help manage any future expectations if you were to submit a formal application.

As always, it is important to build a strong relationship with your underwriting team. Gig workers tend to know other gig workers in their communities. Having the knowledge and confidence to offer these individuals the right incomereplacement policies opens a remarkable opportunity for referral business.

Rick Cordaro, DIF, DIA, LUTCF, is disability insurance regional vice president with Principal Financial Group. He is a past president of the International DI Society and former trustee for NAIFA-Iowa. He may be contacted at rick.cordaro@

May 2023 » InsuranceNewsNet Magazine 47 INSIGHTS
Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.

Now really is the time to invest in online ecosystems

There are two seismic shifts oc curring that will have a profound effect on the way we do business.

It’s no secret that the COVID-19 pan demic brought immense changes to all Americans’ lives. For many, one of those changes was a heightened awareness of the need to protect their families against unforeseen circum stances. This significantly increased their intent to purchase life insurance.

This heightened awareness of life in surance — and how it can provide financial security for families — did translate into increased sales in 2022. According to the 2023 Insurance Barometer study, conducted by LIMRA and Life Happens, slightly more than half (52%) of American adults say they own some form of life insurance coverage (individual, employer sponsored, etc.). This is up from 50% in the 2022 Insurance Barometer study.

As we move into what I’m tentatively calling the “post-pandemic” world, what now? What are some of the lasting effects the pandemic will have on our industry and how advisors work?

I am not in the business of predictive sales models, but I am in the business of measuring consumer attitudes and behaviors — specifically concerning all things life insurance.

There are two seismic shifts occurring that will have a profound effect on the way we do business:

» Millennial and Generation Z consumers who grew up with access to the internet are at or approaching the ideal age to seriously think about individual life insurance policies.

» The pandemic forced almost all of us into online consumerism and transactions.

Every company has a website, and many have a social media presence. But is it enough?

Online activity within

Historically, the majority of Americans have preferred to purchase life insurance in person with an agent or advisor. As the use of technology has become nearly ubiquitous and people have grown accustomed to conducting meetings and transactions online, this trend has shifted. In 2011, 64% of consumers said they preferred to buy in person; by 2020, only 41% felt this way. In 2022, that number dropped to 33%.

Conversely, the idea of shopping and purchasing entirely online has gained in popularity every year — exacerbated by the pandemic. When we look at the generational differences, this shift becomes more pronounced. When the 8,185 Barometer study respondents were asked how the internet would factor into their buying process, only 5% of those under 40 said it would not have an impact at all.

It’s important to note that of those who indicated they had sought information about, purchased or attempted to purchase life insurance online, more than 60% said that they used a comparison tool such as SelectQuote or AccuQuote to better understand what they were shopping for.

As you can see, younger generations rely on the internet for information gathering and shopping. Participating in online meetings via video software and apps has become part of their daily lives. Just

as with other industries, financial services companies and financial professionals must make a concerted effort to become more accessible online.

Consumers most often mentioned the need for life insurers to be “more personable” online. Although “easier navigation” and “better comparison charts” are necessary, features such as live chat with knowledgeable staff and “policy quotes with clear explanations” speak to the expectation that online shopping and sales will replace face-to-face meetings in the future.

None of this should come as a shock to the life insurance industry or financial professionals. But it should spur discussion and potential investment for many. This shift is happening faster than many of us could have anticipated. It is safe to say that not keeping up with online technology may result in missed opportunities and sales.

Consumers routinely purchase houses, cars and fresh vegetables online. Many doctor’s visits now occur online. Why should buying life insurance be any different?

Stephen Wood is research director, consumer markets, LIMRA. He may be contacted at stephen.wood@

48 InsuranceNewsNet Magazine » May 2023 INSIGHTS
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.
Source: LIMRA

How to bridge the relationship gap with clients

An engaging client relationship includes the personal and the technical sides of finance.

Many financial professionals enter the business with a clear understanding of the technical side of finance. We can seamlessly calculate the amount clients need for insurance, prepare projections for a lifetime of fulfillment and develop amazing investment strategies to exceed anyone’s goals.

Although some advisors advertise their education and ability to provide comprehensive plans, the true value of a professional’s talent is in their ability to create an engaging relationship that can bridge the gap between the personal and technical sides of finance.

and their delicate emotions during life’s transitions is pertinent for sustaining client relationships. By practicing open communication and giving clients the space to do the same, you foster mutually beneficial, healthy relationships.

2. Trust

Trust is what grows when advisors are there for clients through thick and thin. Working as a fiduciary does not inherently create trust — it’s the consistency and

important to develop communication techniques and build a plan for interactions based both on your preferences and on theirs. For example, some advisors send cards regularly to clients who have opted in to receive them. Others take time to identify personal interests and share relevant information. When you establish and then act on a plan, clients will see how deeply they’re valued.

Theodore Roosevelt said, “No one cares how much you know until they know how much you care.” This could not be any truer in financial services. When working in this client service-oriented field, the advisor-client relationship must be a top priority.

However, it’s unrealistic to have a deep relationship or spend significant time with every client. So, how can we possibly bridge the relationship gap? Here are three variables to keep in mind to provide top-tier service.

1. Communication

Healthy communication includes the willingness to be direct while remaining focused on the clients’ needs and feelings. The ability to help clients label what they’re feeling about money, their goals

reliability throughout various life changes that build the foundation. Providing your clients with that sense of security will help them feel more comfortable confiding in you about potentially sensitive subjects. When your clients can fully trust you, you can help them reach and exceed their goals.

3. Relevant interactions

All clients have varying preferences around how frequently they would like their advisor to interact with them. It’s

When you strike that balance between a friendship and a healthy professional relationship via communication, trust and relevant interactions, both you and your clients will benefit. Giving clients that extra sense of security through a trusting relationship will help them feel comfortable and confident they’re working with the best possible advisor for them.

Renee Hanson, CFP, BFA, CEP, CDFA, CFS, ChFC, APMA, is a private wealth advisor with Affinity Wealth Advisory Group, a private wealth advisory practice of Ameriprise Financial Services. Renee is a 10-year MDRT member and Top of the Table qualifier. She may be contacted at

May 2023 » InsuranceNewsNet Magazine INSIGHTS
The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.
Theodore Roosevelt said, “No one cares how much you know until they know how much you care.”
When working in this client serviceoriented field, the advisor-client relationship must be a top priority.

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Articles inside

Perm-Term Life Solution You’ve Been Missing article cover image
Perm-Term Life Solution You’ve Been Missing
pages 2, 4-5
FINANCIAL MEDIA NE TWORK article cover image
page 5
Can AI help you grow your business? article cover image
Can AI help you grow your business?
pages 6-8
Louisiana insurance crisis sparks ‘most ambitious’ reform package to date article cover image
Louisiana insurance crisis sparks ‘most ambitious’ reform package to date
page 8
Medicare Advantage shows large profit advantage that new CMS rules look to cut article cover image
Medicare Advantage shows large profit advantage that new CMS rules look to cut
page 9
Life insurance illustration rules on the clock as full rework looms article cover image
Life insurance illustration rules on the clock as full rework looms
page 9
WINNING WITH WORDS article cover image
pages 10-13
Industry execs seek higher yields amid bleak economy article cover image
Industry execs seek higher yields amid bleak economy
page 14
QUOTABLE article cover image
page 14
Will their income potential survive a long retirement? article cover image
Will their income potential survive a long retirement?
page 15
The AI revolution_ article cover image
The AI revolution_
pages 16-18
Four tips for writing ChatGPT prompts_ article cover image
Four tips for writing ChatGPT prompts_
pages 18-22
The Combo Perm-Term Life Solution You’ve Been Missing article cover image
The Combo Perm-Term Life Solution You’ve Been Missing
page 23
Revolutionizing Policy Administration: How LIDP’s Titanium Is Future-Proofing Life Insurers for Tomorrow and Beyond article cover image
Revolutionizing Policy Administration: How LIDP’s Titanium Is Future-Proofing Life Insurers for Tomorrow and Beyond
pages 24-25
STANDING GAP IN THE article cover image
pages 26-27
the Fıeld A Visit With Agents of Change article cover image
the Fıeld A Visit With Agents of Change
page 28
Life premium expected to maintain record levels through 2024 article cover image
Life premium expected to maintain record levels through 2024
page 30
QUOTABLE article cover image
pages 30-31
5 questions to ask smallbusiness owners about their exit strategies article cover image
5 questions to ask smallbusiness owners about their exit strategies
page 32
Business owners need help in planning for continuation article cover image
Business owners need help in planning for continuation
page 33
ANNUITY WIRES Annuity sales boom expected to continue, LIMRA says article cover image
ANNUITY WIRES Annuity sales boom expected to continue, LIMRA says
page 34
QUOTABLE article cover image
page 34
Explaining the nuances of annuities to clients article cover image
Explaining the nuances of annuities to clients
pages 36-38
QUOTABLE article cover image
pages 38-39
Help employers provide workers with benefits they actually want article cover image
Help employers provide workers with benefits they actually want
pages 40-41
Employees cashing out 401(k)s risk a ‘danger zone’ article cover image
Employees cashing out 401(k)s risk a ‘danger zone’
pages 42-43
Help clients achieve financial balance during all life stages article cover image
Help clients achieve financial balance during all life stages
page 44
High anxiety over finances article cover image
High anxiety over finances
page 45
How to love your practice — and how to make it love you back article cover image
How to love your practice — and how to make it love you back
pages 46-47
Stuck in the middle article cover image
Stuck in the middle
pages 48-49
SECURE 2.0 provides new opportunities for advisors article cover image
SECURE 2.0 provides new opportunities for advisors
page 50
Disability income insurance in a gig economy article cover image
Disability income insurance in a gig economy
page 51
Now really is the time to invest in online ecosystems article cover image
Now really is the time to invest in online ecosystems
page 52
How to bridge the relationship gap with clients article cover image
How to bridge the relationship gap with clients
page 53