InsuranceNewsNet Magazine - July 2020

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The COVID-19 pandemic is giving agents, advisors and management teams a chance to educate young athletes on the perilous nature of their careers and their finances.


How Susan Neely And ACLI Are Keeping The Industry At The Table PAGE 8

George Nichols: How The Life Industry Can Cut Through Racism PAGE 30

Reaching The Emerging Millennial Market PAGE 42

Ready for the new normal Legal & General America launches a new digital application platform that gives agents a faster, easier way to insure more families.

How agents can use technology to thrive in a digital world. Page 12.

Life insurance through a new lens How agents are protecting more families in a digital world. It’s 8:12 a.m. on a Tuesday morning in April. Bryan Johnson pours himself a cup of coffee, sits down as his laptop boots up and checks the status of the bird feeder outside the window of his kitchen, which also happens to be his new office. As with many agents, Bryan had to adapt his business model quickly when his agency office temporarily closed down due to the COVID-19 pandemic — and it became impossible to meet clients face-to-face. After logging in, he sees three life applications completed from applicants he’d just Zoom conferenced 16 hours earlier. He also has an instant decision approval waiting for one underinsured client. His agency has moved more of its term business to Legal & General America’s new digital application platform, which offers an easy online application journey for clients and real-time status updates for him. Being able to conduct business digitally wasn’t top of mind for Bryan — until now. As he pours his second cup of coffee, he can’t imagine not using this technology that improves the life insurance process for him and his clients. Turn to page 12 for more information about this new, comprehensive digital platform that, in our changing world, is already becoming a game changer for term life insurance.

d e ir a p Im r u o Y e v a S to w Ho Risk Clients Up to 85% on Term Conversions ds I want to help the millions of insure ative that are like me, so I created a lucr program for agents. rts when Hi, I’m Andy Hyman. My story sta




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and U.S. Patent No. 10,650,468, Term Life Insurance, 06/04/2019 to ted Rela ods Meth and em 20 U.S. Patent No. 10,311,520, Syst Life Insurance Policies, 05/12/20 d Matching and Conversion of Term Systems and Methods for Automate


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JULY 2020 » VOLUME 13, NUMBER 07





By John Hilton

By Michael Naumann Employers report reduced workers’ compensation claims after offering their workers an accident or short-term disability plan.

Hall Of Fame, Fall Of Shame All the talent in the world doesn’t immunize a professional athlete from the potential for financial disaster.


6 Key Regulations Come Into Focus

By John Hilton The need for more realistic IUL illustrations might mean amendments to Actuarial Guideline 49 are in the near future.

INTERVIEW 8 On The Front Line For Life Insurance

Susan Neely, CEO of the American Council of Life Insurers, is leading the organization through some choppy waters as the life insurance industry meets tough challenges. In an interview with Publisher Paul Feldman, Neely the fights that still lie ahead.

38 The Right Benefits Lead To Lower Workers’ Comp Claims



24 Small Town, Big Practice

42 Reaching The Emerging Millennial Market



By Susan Rupe Brian Heckert and his team at FSM Wealth Management prove you can create a planning powerhouse no matter where you are located.

30 How The Life Insurance Industry Can Cut Racism’s Deep Roots By Steven A. Morelli How can the industry spark the kind of change that’s really needed? George Nichols, president of The American College, shares his thoughts.

By Craig Hawley Millennials have been described as both invincible and overwhelmed. But more of them are seeking professional financial advice.

46 Save Your Skin In 3 Easy Steps

By Peter T. Dziedzic Jr. Don’t let your skin pay the price for your summertime fun.


34 A nnuities Begin To Even Out After A Wild Springtime Ride By Susan Rupe Income annuity carriers made some fast and furious changes to their products as the COVID-19 pandemic sent shock waves through the financial industry.


48 Hiring To Bridge The Generation Gap

By John Pojeta Making the right hire goes beyond finding someone with the right skills.



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


Ashley McHugh Sarah Allewelt Samantha Winters David Shanks Sapana Shah Trevor Alford

Copyright 2020 All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail editor@, send your letter to 275 Grandview Ave., Suite 100, Camp Hill, PA 17011, fax 866.381.8630 or call 717.441.9357. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 717.441.9357, Ext. 125, or Editorial Inquiries: You may e-mail or call 717.441.9357, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to or call 717.441.9357, Ext. 125, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 275 Grandview Ave., Suite 100, Camp Hill, PA 17011. Please allow four weeks for completion of changes. Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects in, or untimeliness or inauthenticity of, the information published herein.


InsuranceNewsNet Magazine » July 2020

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Threat Reassessments


hen I left for the night from my first newspaper editing job, I had to be careful. It was usually after midnight, in the mid-1980s, when things were still a little rough in the New York City metro area. I drove my undependable, rattling Volkswagen Jetta through rough neighborhoods and on a stretch of Interstate 95 that could get a little dicey with drunken drivers. Although I was wary of many things, I was not wary of police officers. I found out one night that for a black reporter who sometimes covered the late cops shift, his worries were the opposite of mine. If I saw a cop, I might relax. If he saw one, he tensed because the odds were good that he was going to get pulled over. The newspaper was in Stamford, Conn., and although it might be hard to believe for people who know the “Gold Coast” city of today, in those days, downtown was a little sketchy. South Norwalk, where the black reporter lived, was a little sketchy as well, and he had to cross the Wonder bread-white town of Darien to get there. One night, before he left work, he disclosed that he would often get pulled over as he crossed Darien. When that would happen, he would wait behind the steering wheel, make no sudden moves and show that he was a reporter at The Advocate, which was enough to convince the police to send him on his way. One night, he was pulled over twice in the tiny town. I lived in Bridgeport, which sometimes involved an unnerving ride home in the wee hours of the morning for other reasons. The city itself was dangerous, but I-95 was a highway of horror where I would see things like a speeding pickup truck with its bed fully engulfed by flames. So, yeah, I was happy to see a cop. Perhaps it was naïve of me, but I did not realize that this reporter had another layer of anxiety because of the very people I looked to as protectors.

Central Park Five case, in which five black teenagers were wrongfully convicted of raping and beating a jogger. In Los Angeles, the Rodney King beating case put the spotlight on police abuse and ushered in the age of video evidence. With that, all of America could see what people of color had been saying about their treatment at the hands of police, the latest being the excruciatingly long eight minutes and forty-six seconds during which a Minneapolis policeman used his knee to crush George Floyd’s neck as blithely as if he were squishing a bug. Of course, not all police officers do this. But so many black Americans share these experiences that parents consider it their duty to have “the talk” with their sons. This is not the birds and the bees talk that white parents are having with their boys — this is the talk about how to behave if they are pulled over by a police officer.

Parallel Lives

Why am I writing about this? I could be discussing how the life insurance and financial services industry can help break the cycle of inequality — and that is true and vitally important. As Nichols is quoted as saying in the article, these industries can help build the habits and wealth that

Maybe I was surprised because we were in a somewhat progressive area, and we all seemed to be moving past racism. Or so it seemed at that moment in the mid-’80s. Soon after, New York City would erupt with a string of racial incidents culminating in the 4

InsuranceNewsNet Magazine » July 2020

Walking Warily

And it does not matter what level of success the family might have attained or what neighborhood they live in. George Nichols knows that. He is the president of The American College of Financial Services, a position he took after a highly successful career in many fields, including a couple of decades as a top-level New York Life executive. Nichols is featured in an article in this month’s magazine. He describes his experience of being black in a predominantly white world. He is a friendly, warm guy who is hard not to like. But he lives each day with the understanding that he represents a threat to people in his environment who do not know him. The article describes the precautions Nichols takes to make sure he does not run into trouble while taking a fitness walk around his upscale neighborhood. He is concerned that an encounter gone wrong with police or an armed neighbor might get him killed. Do you know what I worry about during my walks? Whether my plantar fasciitis will act up and cause me foot pain.

can elevate generations of black Americans — and in so doing lift all of America.

I am talking about this because a basic understanding has to come first. I used to chafe at the term “white privilege.” I felt anything but privileged in my life as the only child brought up by a single parent in an era when that was unusual. My first-generation Irish mother worked hard to move up the ranks in a corporation, even though she hadn’t even graduated from high school. As for me, I had to overcome hearing and vision impairments. Yet two generations after my grandparents arrived from Ireland and Italy, I graduated from college, have had a respectable career and feel comfortably, thoroughly American. But here is George Nichols, who by any measure has had remarkable success in his life, and yet he fears for his life just walking around his neighborhood. I was not a model teenager by any means, and I had my share of run-ins with the law. I was never roughed up or arrested, even though I recall being a bit obnoxious on an occasion or two. When I told one of these stories to a close friend who is Puerto Rican and grew up in the Bronx, her eyes widened and she said, “That’s white privilege.” I had thought of these incidents as young foolishness, but I realized that there was no way a kid of color would have made it out of those situations without an injury or a criminal record or both.

History Matters

We can talk about change all we like, secure in the knowledge that we are not the racists, that we are not the problem. But as well intentioned as many of us are, we can’t begin to institute real change until we understand that we have two Americas, and most white people live in the one that offers the promises and dreams laid out by our slave-owning forefathers. Blacks live in the America that did not acknowledge them in the Constitution and did not even recognize them as citizens until 1868 with the 14th Amendment. The strands of history are in our hands. What will we make of them? Steven A. Morelli Editor-in-Chief


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Key Regulations Come Into Focus The need for more realistic IUL illustrations might mean amendments to Actuarial Guideline 49 are in the near future.


By John Hilton

tate insurance regulators are determined to make changes that will result in more realistic indexed universal life illustrations. That means amendments to Actuarial Guideline 49. A pair of different groups within the National Association of Insurance Commissioners worked steadily throughout May and June to send a new AG 49 to the Life and Annuity Committee for its July 10 call. The work to retool and tighten AG 49 is just one of two key regulations that are nearing the finish line. The Securities and Exchange Commission has declined to delay the June 30 effective date for its Regulation Best Interest, which sets out new rules for brokers.

Runaway Illustrations

AG 49 was adopted by the NAIC in 2015 to rein in IUL illustrations that were showing consumers unrealistic returns. Critics say insurers almost immediately got around the new rules by offering IUL bonuses and multipliers. The IUL Illustration Subgroup had been working on tightening AG 49 for months when the Life Actuarial Task Force sent this mandate to members in October: Designs with multipliers or other enhancements should not illustrate better than nonmultiplier designs. Regulators and industry representatives have been working ever since to find language that would find a happy medium between allowing carriers to be creative and satisfying this mandate. The task force voted in May to work off language proposed by the American Council of Life Insurers. In doing so, regulators rejected an alternative proposal that would have delved deeper into AG 49. Not everyone was happy with that decision. 6

InsuranceNewsNet Magazine » July 2020

“Everyone is moving to a best-interest standard, and I don’t think the current industry practices as they relate to IUL are anywhere close to meeting a best-interest standard,” said Larry Rybka, president and CEO of Valmark Financial Group. “And I think the life insurance industry needs to clean up its own house.”

insurance for Minnesota, who chairs the IUL Illustration Subgroup. The task force cleared one issue in June when members voted to limit any changes to IUL illustrations to new policies only. Applying illustration changes to old policies would create a lot of potential confusion, on replacement policies, for

“Everyone is moving to a bestinterest standard, and I don’t think the current industry practices as they relate to IUL are anywhere close to meeting a best-interest standard.” — Larry Rybka, CEO, Valmark Financial Group

The ACLI proposal starts with the market cost of hedges to create the hedge budget and a supplemental hedge budget. An additional formula is used to produce the crediting rate cap for the benchmark index account. Birny Birnbaum, executive director of the Center for Economic Justice, in a May comment letter said the ACLI version was not consumer friendly. “It is beyond baffling why regulators would prefer the ACLI approach — overly complex, untethered to reality and virtually impossible for regulatory or consumer accountability — to develop a maximum crediting rate,” Birnbaum said.

Could Revisit Guideline

But many regulators countered that a time crunch necessitated a smaller fix to AG 49. “If we happen to see further abuses or aggressive behavior on the illustrations side, those proposals could be part of what’s ahead in the future,” said Fred Anderson, deputy commissioner of

example, said Brian Bayerle, senior actuary for ACLI. Consumers could end up seeing something completely different from an illustration that was appropriate when the initial policy was purchased, he explained. “I don’t necessarily think we ended up with [AG 49 changes] that industry loves,” Bayerle said. “I think we have a policy that industry can live with. We do think the best path forward is to apply this to policies on a going-forward basis.” Again, Birnbaum was in opposition. “It’s nonsense,” he said. “How can somebody claim with a straight face that a consumer is going to be confused by getting better information than they got previously?” As this issue went to press, the task force was deciding between three options for establishing a policy loan interest credited rate. The group was expected to send a final amended AG 49 to the A Committee on June 25. If the A Committee votes to adopt the

KEY REGULATIONS COME INTO FOCUS INFRONT changes, the amended AG 49 will go to the Executive and Plenary Committee for a final vote. That would be the last vote before the new rules go to the states for possible adoption.

Regulation Best Interest

The SEC’s Reg BI is expected to be the rules brokers will adhere by the time this issue hits mailboxes. There could be a snag in Chairman Jay Clayton’s timeline, however. On June 2, a three-judge panel of the 2nd U.S. Circuit Court of Appeals heard arguments challenging Reg BI. It often takes weeks for an appeals court to render

whether the firm or its personnel have any disciplinary history. The court case was filed by XV Planning Network and reflects the disappointment of financial advisors that the broker-dealer standard was not raised to the fiduciary level. At the oral argument, counsel for the plaintiffs argued that Reg BI does not meet the expectations of the Dodd-Frank Act. Congress required the SEC to “harmonize” the investment advisor and broker-dealer regulations, they argued. In Dodd-Frank, Congress authorized the SEC to proceed with rulemaking to address the standards imposed on brokers

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its decision. In the meantime, brokers need to be ready to comply. Reg BI imposes a “best interest” standard of conduct on broker-dealers when making a recommendation to a consumer for any securities transaction or investment strategy involving securities. A broker-dealer acts in the best interest of the retail customer at the time the recommendation is made by not placing his or her own financial interests ahead of the interests of the retail customer. A firm satisfies Reg BI by complying with four obligations: disclosure, care, conflicts of interest and compliance. The client cannot waive Reg BI protections. In addition, Reg BI requires a Form CRS be delivered to clients. Essentially another disclosure, Form CRS is to include services received, the cost of services, potential conflicts of interest and

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and advisors for providing personalized advice, taking into consideration the findings of a staff study. The advisor community maintains that Congress intended the SEC to extend the fiduciary duty imposed on investment advisors to broker-dealers, and the SEC fell short. Eight states represented by the New York attorney general’s office joined the XY Planning side, advocating the view that Reg BI was contrary to law and exceeded the SEC’s authority. I n s u r a n c e N ews N e t 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.

July 2020 » InsuranceNewsNet Magazine


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On The FRONT LINES For Life Insurance How Susan Neely and ACLI are keeping the industry at the table during this crisis


InsuranceNewsNet Magazine » July 2020

his year has been the worst of all possible worlds for life insurance, an industry that depends on predictability. Historically low interest rates are making it painful even to attempt projecting returns that will support products and sustain remotely attractive crediting rates. Meanwhile, the COVID-19 pandemic is hitting the primary age demographic that the industry serves, upsetting mortality tables. To top it all off, the faceto-face meetings that drive the industry’s sales are either banned or unwanted. Pack all of that into a locked-down national capital filled with constant knockdown partisan battles and you have a good idea of what the American Council of Life Insurers is dealing with these days. But ACLI has a seasoned pro as its president and chief executive officer, Susan Neely, who has been working in government and trade associations for nearly four decades. Neely was one of the architects of the Department of Homeland Security in the George W. Bush administration. Although she started with ACLI just about two years ago, she had been involved with health insurance in the past as an executive with the Health Insurance Association of America for nearly a decade, leaving to help with the 9/11 response. While with the association, Neely led the “Harry and Louise” advertising campaign that so famously helped end President Bill Clinton’s effort to revamp health insurance in 1994. The life insurance industry could not have asked for a more able defender than Neely in these times of historic challenges. In this conversation with Publisher Paul Feldman, Neely discusses the challenges the industry faces and the fights that still lay ahead. FELDMAN: What does the ACLI see right now as the biggest challenge to the life insurance industry? NEELY: Let me start in general first and then go into more specificity, particularly as COVID-19 has changed the trajectory of lots of things and increased some of the stressors on the industry. Generally, one standpoint is our work with policy makers and regulators at the state and federal levels to make sure they understand the value proposition of this

ON THE FRONT LINES FOR LIFE INSURANCE INTERVIEW industry. There’s not the understanding there needs to be of how critical we are to individual Americans’ economic and financial security. This is the bedrock of our value proposition — the guarantees we provide people, those long-term promises — that’s our competitive differential with any other parts of the financial services industry. We think there’s a great need for policy makers at all levels of government to understand that better. We are on a systematic and aggressive track to try to raise the understanding of that and partner closely with others to make that happen. They should know things like we pay out $2.1 billion a day to individuals across our range of products, from life insurance for retirement and annuity payments to shortand long-term disability and long-term care. That’s a remarkable number — compare that to what Social Security pays out every day, $2.7 billion. Somebody had said we’re like the wingman of Social Security, but I’d say we’re an essential part of the social safety net in this country, and that’s just not well understood. And it needs to be, particularly if you add to the COVID-19 context of the devastating impact the shutdown of the country has had on individual Americans’ financial security. We were already on a campaign to make sure the policy makers understood that better, and we are even more so now. One-third of the small businesses in this country have life insurance, and that’s a source of emergency cash right now. That’s sustaining to them. Forty-seven percent of the private-sector workforce is covered by short-term disability policies. Congress, as it looks to provide financial support to individuals to help them get through the pandemic crisis, doesn’t need to be disrupting the part that the private sector is already taking care of. That’s one big challenge in general, and it’s something we think about every day. Then you get more specific: What are the challenges ahead? Low interest rates — we’ve been in a low interest-rate environment for the last decade. And that’s only become more acute because of the pandemic and the Fed moving rapidly to rescue the economy. Now we’re at virtually zero interest rates, which as you know has an impact on the credit spread. With these economic conditions, it makes it harder

to maintain the affordability of products and still be there to make those long-term promises and guarantees that are back to what our value proposition is. That is an ongoing concern, then related to that is the impact COVID-19 has had on fixed income investments. First and foremost, risk-free rates with U.S. Treasury rates are at historical lows. The impact of those stressors are going to be around for a while. We’ve been working with LIMRA to help our shared membership understand the impact as they make business decisions, while also

the consumer and protecting the consumer, as they should be. These kind of innovations — I don’t even know if you’d call them innovations anymore, they’ve been around a while — but these kinds of temporary accommodations have been really important to the industry, and we’d like to make those permanent. With licensing, we had a whole group of producers in waiting who had finished all their classroom requirements and just needed to sit for the exam and complete the final steps. We went to bat, along with AALU and NAIFA and said, “Look, we

“Somebody had said we’re like the wingman of Social Security, but I’d say we’re an essential part of the social safety net.” engaging with regulators around regulatory accommodations and changes that can limit some of the stressors they face. Those are things that are here to stay, and we’re going to be concerned about those. FELDMAN: How has regulation been affected by the crisis? NEELY: In these early stages, we have sought regulatory accommodations to allow companies to operate as essential services, and that’s led to important changes. If you think about your readership, important changes are allowing business to continue to operate and write policies and pay benefits. E-signatures and e-notarizations are things that we’ve long wanted, and I think agents have long wanted because the consumer wants them. Regulators are always conservative about erring on the side of what’s good for

need to try to accommodate this and have the ability to at least license these producers temporarily so they can get to work and earn a living and take care of their families.” Now, some of those accommodations have proven to work fine. Those are some changes we seek to make permanent. Is there a way to license producers that doesn’t require a face-to-face as it did pre-pandemic? Those are some of the changes we see. We have a list of objectives that have been developed by ACLI and LIMRA and our shared members as part of a task force. FELDMAN: How are the challenges different now from what happened after the 2008 crash? We also had the low-interest rate scenario then. NEELY: I think what helped the companies navigate through the crisis in 2008, and July 2020 » InsuranceNewsNet Magazine


INTERVIEW ON THE FRONT LINES will continue to help them, is that we are a cautious, conservative industry by nature. Our 30-year promises, 40-year promises, 50-year promises ... it’s just baked into the industry’s DNA. We are very, very cautious about overextending. We’re highly regulated at the state level, and that oversight ensures that we’re operating prudently and able to make good on those promises that we make to consumers. We believe all of that will continue to be important to the industry’s success. But as I said earlier, we’ve gotten through the stressors with low interest rates and the collapse of Treasury bond yields that will add to the challenge going forward. We also have the pandemic, which is different than the housing bubble. So, we’ve got CDC data that makes it clear that older Americans have been hit hardest by the pandemic. This is an unprecedented disruption to mortality data. It’s created some uncertainties and is going to make it difficult for life insurance to set premiums, at least in the near term. That’s something that must be figured out as part of the business going forward. Certainly, we’ve heard the rumor that there’s a 40% to 50% increase in demand for life insurance, so it’s a great time for producers in the business. Underwriting, at least in the short term, is difficult until there’s better understanding of the pandemic and what it’s doing to age bands and mortality and morbidity rates. FELDMAN: What do you see as some of the greatest challenges for distribution right now for carriers? NEELY: I think the greatest challenges for distribution for the carriers is some of the things I mentioned, in terms of working virtually, as we’re all moving to either cancel face-to-face meetings and conferences or make them virtual. I’ve heard people say over and over that we’re fundamentally a people business. We all go into it, whether you’re a producer or work in a company. Even at ACLI, we go into this business because we want to help people and we like to engage with people. That’s an immediate challenge for distribution — the ability to meet with people face to face. We are doing our best to take care of some of the operational challenges. We’ve sought regulatory accommodations 10

InsuranceNewsNet Magazine » July 2020

“The need for candidates and incumbents to raise money is not going away, so we’re going to do a fundraiser by Zoom.”

around electronic signatures, notarization and temporary producer licensing. These are things that we’d like to see become permanent. That will be the lemonade out of the lemons, so to speak. Those can be pluses, but this difficulty of seeing people is a challenge to distribution and one I know that they are seeking to navigate. It is not an easy time for that. FELDMAN: What would you like to see Congress do in this recovery in the life insurance and the retirement space? NEELY: In terms of Congress, there are immediate recovery packages or response packages. With the CARES Act, we were very engaged there on a couple of fronts and are actively engaged. We’re going to host our first Zoom fundraiser for House Minority Leader, Kevin McCarthy (R-Calif.), so that will be

interesting. The need for candidates and incumbents to raise money is not going away, so we’re going to do a fundraiser by Zoom. We are actively talking to him and all members of leadership about what’s fairly certain to be another response package, and we have things that we think would be important to the industry to be included in that. We’re very vigilant on paid medical leave so that it doesn’t become a platform for government encroachment of what the private market is doing so effectively through disability insurance. We’re deep in those conversations, trying to be part of the solution. We know that people who don’t have any means of support need to be taken care of temporarily, but we don’t want to see the private market upended in that regard. Back to the immediate concerns, if you

ON THE FRONT LINES FOR LIFE INSURANCE INTERVIEW look forward a little bit to where the policy debate’s going to go in this country, I guess we’d use the phrase that we “accelerated the inevitable.” We’re already deeply concerned about the retirement savings gap — people with inadequate retirement savings, aging of the population, and the fact that Social Security is a key part of the retirement social safety net. Social Security will not have adequate funds by 2034, 2035. Plus, you have 60 million people in the gig economy who don’t have the ability to access workplace retirement savings. All of that was already a concern; it’s going to be even more of a concern going forward. We are so thrilled that the SECURE Act passed Congress with strong help from the producers who were such valuable spokespeople before Congress. We’ll be working with them again around the opportunities to advance policies to help build the retirement savings gap. Senators [Rob] Portman (R-Ohio) and [Ben] Cardin (D-Md.) are really some of the big thinkers. They have legislation that we have been supporting. There are elements of their legislation that we would like to see advance as it relates to improving the market for annuities, helping address student loan debts, that kind of thing. Retirement security will be a big area of focus going forward. Paid family medical leave, that was already an issue gathering steam before COVID-19. Right now, it’s taken on a certain area of focus around protecting and supporting people who aren’t working. That debate around how we provide income replacement while people are taking care of family needs is only going to intensify going forward. Again, the private market has a big, big role to play. We want to make sure we’re part of that and able to advance solutions. FELDMAN: What do you see on the annuity front that you’d like to move forward? NEELY: In the Portman-Cardin proposal, we’ve got a provision that would modify the requirements to minimum distribution rules to support retirees who have partially annuitized their retirement savings. There’s another provision that would provide retirees greater flexibility to use longevity annuities to protect their income later in life.

CARES Act Provisions

The CARES Act enacted in March expanded access to retirement funds for those impacted by COVID-19, illness or financially. The law allows penalty-free withdrawals from defined contribution plans and makes practical changes to required minimum distribution rules. Life insurance companies are taking additional actions to assist policyholders, including: • Temporarily waiving fees on coronavirus-related retirement account withdrawals. • Not charging plan sponsors for amending their plans to implement the CARES Act. • Forming dedicated teams to provide education and other support to plan participants. • Providing guidance and webinars to help customers and financial professionals navigate the CARES Act. Life insurers, as large investors in the economy, are making accommodations under current accounting and RBC guidance to defer required payments under their investment agreements, such as delaying required mortgage payments for commercial and farm mortgages. Small businesses account for nearly half of private-sector employment, and nearly one-third of small-business owners have life insurance policies with cash values they can use for liquidity needs. — ACLI Those are some of the things we are supporting, but there has always been a debate around what the required minimum distribution age should be for when you have to take your retirement savings. We argue now, particularly as a result of the impact of the pandemic on people’s retirement savings, that if you are close to retirement, why not give somebody more time to not have to take a distribution on their retirement savings? Those are some of the things. Jill [Kozeny, ACLI vice president of public affairs], what would you add to that? KOZENY: It really builds on SECURE and goes deep into the existing retirement system to turn up the dial to help people save more, help small businesses even more, expand plans for lower income Americans who don’t have coverage at all, and build in more flexibility for people who already are

retired in terms of using their retirement savings dollars. It works within the existing retirement system and amps it up in every way possible, very astutely so. Both Sen. Portman and Sen. Cardin are very, very committed to this issue. And so their bill reflects all of that deep knowledge and long-term thinking about how to enhance every policy possible to secure retirements for all kinds of Americans. GO ONLINE to read Part 2 of this interview in which ACLI CEO Susan Neely discusses the elections and whether to expect an aggressive campaign along the lines of the “Harry and Louise” campaign that she led, and is credited with helping stop the 1994 effort by President Bill Clinton to reform health care insurance.

July 2020 » InsuranceNewsNet Magazine


Empowering agents to grow in a digital world Legal & General America unveils a digital application platform that gives agents and their clients a best-in-class experience. everyone,” said Mark Holweger, president and CEO of Legal & General America. It’s a win-win for customers and agents.

More than two years before the worst pandemic in modern history brought a sudden and profound change to our daily lives, Legal & General America was white-boarding ideas for how to simplify the life insurance process and make it easier for agents to protect more families. Forward thinking has always been a hallmark of its legacy of process and technology innovation — but company leaders didn’t realize just how important and relevant those ideas would be today. The big idea: a smart, fast and easy way to service clients. Fast-forward to 2020, when that foresight and preparation is proving essential — especially for distribution partners and their customers in the wake of COVID-19. Legal & General America launched its digital application platform* midway through 2019 in a company-wide effort to protect uninsured or 12

InsuranceNewsNet Magazine » July 2020

underinsured Americans and meet consumers’ growing dependence on technology. “Working hand-in-hand with our distribution partners, we built our platform to make it easier for people to protect what matters most. The platform brings the life insurance application online, further automates the underwriting process and makes doing business better for

The digital application platform offers smart, reflexive questions written in plain language — making it easy for customers to complete the application online at their leisure. The flexible and simple online application takes as little as 11 minutes to complete — perfect for many consumers who are working from home, taking care of kids or aging parents, and otherwise don’t have more than 15 minutes to spare on any given day. There's also a good chance for approval without the need for exams, labs or APSs (for younger, healthier applicants). The platform is tailored for agents who want to give their clients superior service while still offering the same low-cost, high-value pricing and product options that Legal & General America has offered for decades. Now agents can serve these customers quicker and more efficiently — moving them through the process faster, which frees up more time to prospect for new customers.

The digital application platform: • Gives clients an easy-to-complete digital application • Collects relevant information with reflexive questions • Reduces the need for exams and labs for eligible applicants • Quickly obtains requirements and makes decisions in real time • Keeps agents and clients informed, and offers self-service options • Reduces cycle time even if exam- and lab-free underwriting are not available

An all-in, company-wide new way to do business. While other companies are offering partial solutions with limited enrollment programs that may only serve a small portion of the market, Legal & General America’s new platform is much broader than just an electronic application. “We’re integrating this comprehensive platform into all our business processes and using technology that allows us to quickly enhance the process from start to finish. We developed it with transparency and flexibility at all levels to improve outcomes for everyone — especially as we release future capabilities,” said Brooke Vemuri, head of change and transformation at Legal & General America.

“The online application has been great. It's taking my clients much less time to complete the process, and being able to do it on your own schedule without having to make an appointment is wonderful! Much faster and more convenient.”

— Agency Partner

The best is yet to come: evolving our technology and processes. The platform will continue to be enhanced in phases throughout 2020. Partners can look forward to new API solutions that make sharing data more readily available, including real-time status feeds.

It takes as little as

11 minutes

for clients to finish the application

At the end of the day, what we do together as an industry is to serve and protect people. By simplifying the life insurance process, we can make it easier for agents and advisors to reach more consumers and help them plan for life's most uncertain moments while giving them a faster, better experience.

More than


of customers who start the application online finish it All statistics based on platform experience Q1 2020.

Visit to access more information about our digital application platform, including training guides, videos and more. *The new digital application is available for Banner Life business only at this time and is not available in New York. Legal & General America life insurance products are underwritten and issued by Banner Life Insurance Company, Urbana, Maryland and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states and in DC. William Penn products are available exclusively in New York; Banner does not solicit business there. Clients who do not fit all automated underwriting eligibility requirements may need to submit additional information like a paramedical exam or other labs or medical records. For broker use only. Not for public distribution. The Legal & General America companies are part of the worldwide Legal & General Group. For broker use only. Not for public distribution. 20-161

July 2020 » InsuranceNewsNet Magazine



GDP Takes Biggest Quarterly Drop Since 2008 GDP fell 5% in 1Q 2020 GDP fell 8.4% in 4Q 2008

GDP Fell 5% In 1Q The nation’s economic numbers were worse than predicted for the first quarter of SOURCE: U.S. Department of Commerce

the year, with gross domestic product dropping by 5%, more than the 4.8% originally predicted by the Commerce Department. A devastating March brought down two previous months of normal growth, as COVID-19 shutdowns brought most businesses to a halt. The second quarter is expected to see a much steeper drop, which some estimates have put as high as an annualized 40% However, the Commerce Department predicts an economic rebound in the third and fourth quarters, provided there is not a second wave of COVID-19. The Commerce Department said it expects the economy to shrink between 5% and 6% for 2020, warning that double-digit unemployment will continue into the following year.


Federal Reserve Chairman Jerome Powell is asking Congress for more fiscal stimulus — appropriate money — to prop up businesses, households, and local governments in the wake of the COVID-19 financial crisis. But Powell also thinks the central bank he heads needs to do more. In prepared testimony to the Senate Banking Committee, Powell said the Fed is “committed to using our full range of tools to support the economy in this challenging time.” So what exactly does that mean? Think of the Fed like a plumber. Its job is to make sure money keeps flowing through the U.S. financial system. When the system gets clogged — by, say, a pandemic — the Fed whips out its monetary policy tools to unclog the flow of money, and to make it cheaper and less risky to borrow and lend. That’s what the Fed did in mid-March, when it cut interest rates to zero. Since then, the Fed has kept money flowing by adjusting banking rules, buying up Treasury and mortgage bonds — and the list goes on, said Mark Zandi, chief economist of Moody’s Analytics. And the Fed is about to get money out to small and midsize businesses through its new “Main Street Lending Facility.” But one thing the Fed can’t do, DID YOU




QUOTABLE So the stock, bond markets, credit markets broadly are functioning well, and they still have some more room to maneuver here if they need to. — Mark Zandi, chief economist of Moody’s Analytics

Zandi said, is pump money directly into the economy to get things going again. “Now that the country has lost a lot of jobs, people are very nervous and feeling a lot of uncertainty,” Zandi said. “And that’s more difficult for the Fed.”


Franklin Templeton Investments fired an employee following a confrontation in New York’s Central Park that was caught on video and sparked a discussion on race. “We do not tolerate racism of any kind,” the firm said in a statement. Amy Cooper was the head of insurance investment solutions at Franklin Templeton. In a video shared widely on social media over the weekend, Cooper was shown calling police to report a black man threatening her and her dog while she was walking her dog offleash in a section of Central Park requiring dogs to be leashed. The man, Christian Cooper, asked Amy to leash the dog. Instead, she was seen grabbing the dog by its collar and dragging it by its harness while using her cell phone to call police and falsely report the man was threatening her. Christian shot cell phone video of Amy as she dragged the dog and called police.


For property/casualty insurers and reinsurers, Hurricane Katrina produced $61.9 billion in insured catastrophe losses in the U.S. — the highest annual insured catastrophe loss tally ever. COVID-19 is poised to beat the record, AIG’s CEO said during a recent earnings call. The insurer set aside $419 million for catastrophe losses in the quarter, with $272 million of that estimated to be for losses related to COVID-19. And the worst is yet to come, said CEO Brian Duperreault. “We believe COVID-19 will be the single largest CAT [catastrophic] loss the industry has ever seen,” he added. COVID-19 is much worse than Katrina was because the pandemic is everywhere AIG does business, said Peter Zaffino, president and chief operating officer of the company. Pandemic losses in the first quarter came in many areas, he added, including travel and related accident health, contingency, commercial property, trade credit, and workers’ compensation. AIG also projected business interruption insurance losses.

More than 1 in 4 Americans are raiding their retirement accounts following a COVID-19-related job loss. Source: MagnifyMoney

InsuranceNewsNet Magazine » July 2020

Charles Small SportsChrome/Newscom


Rod Mar/MCT/Newscom

The COVID-19 pandemic is giving agents, advisors and management teams a chance to educate young athletes on the perilous nature of their careers and their finances. BY JOHN HILTON Former NFL running back Eddie George went back to school for his MBA after retiring from football. He heads up Edward George Wealth Management in Nashville, Tenn. George is counseling clients to wait out the economic upheaval related to the pandemic.


ddie George was mature enough as a high school senior to opt for another postgraduate year at Fork Union Military Academy. It made him smarter and more disciplined than most of his 18-year-old peers. But it did not immunize him from the potential for financial disaster. In George’s case, it appeared in the form of an unscrupulous advisor to

Patrick Kerney went from the NFL trenches to running his own insurance agency. The Connecticut native says he always had a good sense about making money and protecting it. Since retiring in 2010, Kerney has helped younger players be better prepared and informed.

whom the future NFL star nearly trusted his signing bonus. George had received a $2.9 million bonus with his rookie contract as the 14th pick in the 1996 NFL draft. He ultimately did not give his business to the advisor in question, who was later charged with running a Ponzi scheme. “I didn’t know what I didn’t know,” said George, who would earn nearly $30 million over a nine-year career. “I didn’t know anything about the SEC, FINRA,

Broker Check, or looking at any information on the background on this guy. I just knew that he had other famous people, other famous athletes, so if they’re with him then he must be OK.” The experience hardened George on the ever-present financial dangers lurking to trip up young athletes who become instant millionaires. From rogue advisors to profligate spending to poor investments and planning, athletes face many threats to their wealth. July 2020 » InsuranceNewsNet Magazine


COVER STORY HALL OF FAME, FALL OF SHAME Add in the short careers — the average NFL career us about three years — and it becomes clear that financial advice and planning are crucial for professional athletes, said Shaun Melby, founder of Melby Wealth Management in Nashville, Tenn. “More than likely, they are not as experienced with money as they would be had they reached their peak earnings later in life,” Melby said. “Because of that, they have a difficult time setting boundaries. The best advice I could give an athlete is to hire a ‘No’ person. This could be a business manager or financial advisor, but their main job is to tell people, and the athlete themselves, ‘No.’” Some athletes respond to the opportunities and challenges money provides — Eddie George, for example. After a standout career that saw him earn four Pro Bowl trips as a running back for the Tennessee Titans and the Dallas Cowboys, George returned to school and earned an

MBA from Northwestern University. He has several business ventures, including serving as managing partner of Edward George Wealth Management Group in Nashville. A full-service registered investment advisor firm focused on high net worth clients, George endorses annuities and said his own portfolio includes one. “It’s worked well for me,” he said. “But it just really depends on the person’s situation and their long-term goals and objectives, and how it fits their lifestyle now and how it affects them in the future.” While he does not have any athletes as clients, yet, George rarely passes up opportunities to mentor them. “Don’t be in such a rush to jump at every business opportunity or rush to jump into the best-looking house and live this lifestyle,” George said. “Do it slowly and methodically because the goal has to be generational wealth versus living a rich lifestyle.”

Reaching Out

Patrick Kerney tries to help young football players whenever he can, working pro bono to teach them basic financial concepts like dollar-cost averaging and how the S&P 500 can make money for them with little risk. These are topics he is passionate about. In fact, Kerney, an 11-year veteran of the NFL, helped the league run its personal finance boot camp for players in 2015-16. Dozens of players and their wives participated in session that included “Building Generational Wealth,” “Planning and Building Your Portfolio,” and “Examining Wills, Trusts, Estate Planning.” “It’s something I care a great deal about and have invested a lot of human capital into,” said Kerney, who heads up Kerney Insurance Agency in Greenwich, Conn. “I’d love to see more guys have the humility to learn from it, but it’s a tough argument to get them to listen to.”


Alex Rodriguez Age: 44 Career Earnings: $480 million in baseball contracts. Claim to Fame: Hit 696 home runs; considered the best player in MLB during his prime years. Financial Fame: Vastly expanded his wealth through shrewd investments via A-Rod Corp.


InsuranceNewsNet Magazine » July 2020

HALL OF FAME, FALL OF SHAME The 30th pick of the first round in the 1999 NFL draft, Kerney starred as a pass-rushing defensive end for the Atlanta Falcons. In February 2007, he moved on to the Seattle Seahawks and a six-year, $39.5 million contract. Growing up in Connecticut, Kerney said he had a strong education on the value of both work and money. “I understood how hard it was to make eight bucks an hour,” he said. “So, when I got some money in my pocket, it was harder to pry out than from most just because I think I respected the dollar more than most guys.” Kerney’s rookie contract paid him $5.6 million over five years. He found a mentor in the Falcons’ locker room — fellow defensive end Lester Archambeau — who helped steer him to good financial decisions. At the end of his career, Archambeau, a Stanford graduate, walked by Kerney’s

locker one day and asked the rookie if he “liked money.” Kerney answered in the affirmative, and Archambeau tossed him a copy of The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. The 1996 book by Thomas J. Stanley and William D. Danko uses research to analyze millionaires. The authors compare the behavior of those they call UAWs (Under Accumulators of Wealth) and those who are PAWs (Prodigious Accumulator of Wealth). “It just affirmed the fact that truly wealthy people aren’t the ones running around showing it with cars and multiple homes and jewelry and all the outward material goods, but really have built an asset base that creates awesome passive income flows and a level of security that people who have high spend will never have,” Kerney said. Following his retirement from the NFL in 2010, Kerney graduated from


top-ranked Columbia Business School with an MBA in finance and studied the insurance agency model before opening his own in 2018. Kerney Insurance offers lines of commercial, personal and life insurance coverage.

‘I Want To Do Deals’

According to a 2015 study by the National Bureau of Economic Research, close to 16% of the NFL players in the study who were drafted between 1996 to 2003 also filed for bankruptcy within just 12 years of retirement. Sports Illustrated surveys put the number as high as 60% for the NBA. The financial hurdles are the same across all sports: short careers, feelings of invincibility, rogue advisors and peer pressure. Kerney saw it during his 11 years in NFL locker rooms. “A lot of these young guys get this idea that ‘I want to do deals. I want to start

Brian Orakpo/Michael Griffin Age: 33 (Orakpo); 35 (Griffin) Career Earnings: Orakpo ($60.5 million); Griffin ($42.5 million). Claim to Fame: Starred as teammates for many years with the Tennessee Titans. Financial Fame: Co-owners of a successful Gigi’s Cupcakes franchise in Bee Cave, Texas. July 2020 » InsuranceNewsNet Magazine


COVER STORY HALL OF FAME, FALL OF SHAME a business,’” Kerney said. “I saw a hunting camp, car washes and restaurants. So not only are you in a low-probability world of starting up businesses that are going to eat away your capital, you’re also now spending your time that you can’t put toward football.” Many advisors are using the COVID-19 pandemic to drive home financial lessons about planning and emergencies. Professional athletes can learn as well, Kerney said. Most of the young athletes know only a world of fabulous stock market gains, he noted.

literally out of nowhere to win the 1991 PGA Championship. The ninth and final alternate for the tournament, Daly was a surprise late entry and drove through the night to reach the Crooked Stick Golf Club course near Indianapolis. Despite not having played a practice round, the middling pro played well from the first tee. Daly won fans quickly with his naïve demeanor, mullet and long drives and went from an unknown to an international golf star. Daly would go on to win another major, the British Open in 1995, and 20

Patrick Kerney makes a point during the NFL’s personal finance boot camp for players and spouses.

One of Kerney’s financial musts is to have 12-18 months’ worth of expenses in an emergency fund. Most athletes are living off their emergency funds, or other savings, for the foreseeable pandemicpaused future. Real life is verifying the wisdom of the advice. Otherwise, the pause gives athletes a chance to evaluate their financial situation, their goals and who is handling their money. “Hopefully, with what’s happened with the economy and the stock market, they realize risk is real and realize that no matter how nice the suit is, a business card or the person that they’ve employed, that they’re not a magician, and that it’s time to take a harder look at that person,” Kerney said.


Fondness for drink and a gambling addiction are the demons that combined to derail professional golfer John Daly. A pure Southern country boy, Daly captivated sports fans when he came 18

InsuranceNewsNet Magazine » July 2020

times total across several different tours. At 54, he remains an active player on the PGA senior tour and won $324,000 in 2019. His career earnings across several tours is pegged at $14.2 million by Yahoo Sports. But a true picture of Daly’s career finances is difficult due to profligate spending, which includes gambling losses that Daly estimated at a staggering $55 million in 2014. He has also been married four times. Author of John Daly: My Life in and out of the Rough, the golfer claims he drank a fifth of Jack Daniels each day when he was 23 and on the PGA Tour. Daly battled his alcohol problem until 2008, when he claimed to have stopped drinking. But Daly found some success in business and has likely earned much more off the course due to his outsized personality. In addition to various endorsement deals, Daly owns a golf course design company and a partnership in Loudmouth Golf clothing. Daly has slowed down considerably in his 50s and has said he now plays only the $50 or $100 slot machines.

Insurance products issued by MINNESOTA LIFE INSURANCE COMPANY. Insurance policy guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Please keep in mind that the primary reason to purchase a life insurance product is the death benefit. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements. SecureCare may not be available in all states. Product features, including limitations and exclusions, may vary by state. SecureCare Universal Life Insurance includes the Acceleration for Long-Term Care Agreement. The Acceleration for Long-Term Care Agreement is a tax qualified long-term care agreement that covers care such as nursing care, home- and communitybased care, and informal care as defined in the agreement. This agreement provides for the payment of a monthly benefit for qualified long-term care services. This agreement is intended to provide federally tax qualified long-term care insurance benefits under Section 7702B of the Internal Revenue Code, as amended. However, due to uncertainty in the tax law, benefits paid under this agreement may be taxable. Please ensure that your clients consult a tax advisor regarding long-term care benefit payments, or when taking a loan or withdrawal from a life insurance contract. The death proceeds will be reduced by a long-term care or terminal illness benefit payment under this policy. This policy has exclusions, limitations and reduction of benefits, under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, call or write your producer or Minnesota Life Insurance Company. These materials are for informational and educational purposes only and are not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. Securian Financial Group, and its affiliates, have a financial interest in the sale of their products. The purpose of this material is the solicitation of insurance. An insurance agent or company may contact you. Policy form numbers: ICC17-20103, 17-20103 and any state variations; ICC17-20111, 17-20111 and any state variations. Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. Securian Financial is the marketing name for Securian Financial Group, Inc., and its affiliates. Minnesota Life Insurance Company and Securian Life Insurance Company are affiliates of Securian Financial Group, Inc. For financial professional use only. Not for use with the public. This material may not be reproduced in any way where it would be accessible to the general public. 400 Robert Street North, St. Paul, MN 55101-2098 ©2020 Securian Financial Group, Inc. All rights reserved. F87549-124 2-2020 DOFU 2-2020 ICC20-1087609


Your clients want benefits, not hassle. That’s why SecureCare Universal Life offers a cash indemnity benefit for long-term care. There’s no fine print about how the benefit can be used. No restrictions or receipts. Just cash.1 And the care they choose.

Help give your clients freedom today. Call 1-888-900-1962 to get started.

1. Monthly cash benefit will be paid upon the insured being certified by a licensed health care practitioner as a chronically ill individual. July 2020 » InsuranceNewsNet Magazine



Dennis Rodman

One of the most eccentric sports figures in recent memory, Dennis Rodman made a lot of money and spent a lot of money. A five-time NBA world champion, Rodman is best remembered for a dizzying array of hair colors while playing alongside Michael Jordan on a Chicago Bulls team that won three straight titles from 1996 to 1998. Known as a rugged, defense-first player, Rodman led the NBA in rebounds seven years in a row and made the All-NBA Defensive First Team seven times. Off the court, Rodman, now 59, grew up fatherless in a very poor section of Dallas. His lack of direction and discipline surfaced in a series of controversial incidents, often designed to get attention. He was frequently suspended by the NBA, once for head-butting a referee. Rodman also wore a dress for a publicity stunt during which he claimed to be

marrying himself, alleged that Madonna tried to get pregnant by him and had a nine-day marriage to model-actress Carmen Electra. Unsurprisingly, this erratic behavior did not promote good financial decisions. Rodman earned approximately $27 million at his peak, according to Spotrac. com. But these days, Celebrity Net Worth and other sites estimate his net worth to be about $500,000. Rodman once avoided child support payments by claiming he was “sick and broke.” Married and divorced three times, Rodman eventually owed $860,000 in child support. He reportedly spent millions of dollars on a heavy-metal record collection that filled his $8.7 million Malibu estate. But Rodman’s financial downfall was not all his own doing. He was one of many athletes scammed by a woman, Peggy Ann Fulford, posing as a financial

Tom Putt/STL/Icon SMI

Nicole DeBoom Age: 48 Career Earnings: N/A Claim to Fame: Swimmer and triathlete. Won the 2004 Ironman Wisconsin, wearing a prototype of her first-ever running skirt. Financial Fame: CEO of the company she founded, Skirt Sports, which took only three years to surpass $1 million in sales.


InsuranceNewsNet Magazine » July 2020

advisor. Fulford, who is serving a 10-year prison sentence, gained trust by claiming to have a degree from Harvard and bragging of success on Wall Street. All lies, investigators later determined.

Marion Jones

For one brief, shining moment, Marion Jones stood atop the track universe as the fastest woman in the world. The year was 2000 and the place Sydney, Australia, where the sprinter won five gold medals at the Summer Olympics. Also known as Marion JonesThompson, the Belizean-American would go on to play professional basketball for the Tulsa Shock in the WNBA during 2010-11. But the intervening decade saw Jones fall far and hard. Jones’ problems began on Dec. 3, 2004, when Victor Conte, the founder of the BALCO lab, appeared on ABC’s “20/20” and said he had personally given

HALL OF FAME, FALL OF SHAME COVER STORY Jones four different illegal performanceenhancing drugs before, during and after the 2000 Olympics. Journalists later cited evidence and testimony from Jones’ ex-husband, C.J. Hunter, who claims to have seen Jones inject herself in the stomach with the steroids. At the time, nothing came of the charges, as Jones passed all drug tests. But trouble was lurking. In October 2007, Jones admitted to lying to federal agents under oath about her steroid use prior to the 2000 Olympics and pleaded guilty in federal court. Around the same time, Jones was linked to a check-counterfeiting scheme that led to criminal charges against her coach and a former boyfriend. Documents showed that a $25,000 check made out to Jones was deposited in her bank account as part of the alleged multimillion-dollar scheme. Jones was stripped of her Olympic medals and served six months in prison

in 2008 to satisfy all charges. By that time, her financial troubles had also caught up to Jones. During her peak racing years, Jones received $70,000 to $80,000 per race, plus $1 million a year in endorsement deals from brands like Nike. Jones was heavily in debt by 2006, the year a bank foreclosed on her $2.5 million mansion near Chapel Hill, N.C. She was also forced to sell two other properties, including her mother’s house, to raise money. After retiring from professional sports, Jones settled down with her husband, Obadele Thompson, and their three children: Monty, Amir and Eva-Marie.

HALL OF FAME Alex Rodriguez

The popularly tagged A-Rod is one of the most talented and accomplished baseball players of the past 30 years. His post-

sports career in business is on track to match or top that. On the field, Alex Rodriguez, 44, was a polarizing player opposing fans loved to hate. Early on, much of that had to do with how easily he succeeded and the tough negotiations that led to a then-stunning 10-year, $252 million contract with the Texas Rangers in 2000. Later, he generated controversy by dabbling in steroid use in two separate incidents. Rodriguez was suspended by Major League Baseball for the 2014 season. When on the field, A-Rod produced eye-popping numbers. He finished with 696 home runs and 2,086 RBIs, making 14 All-Star teams and winning the Most Valuable Player award in 2003, 2005 and 2007. Were it not for the taint of steroids, he would be a cinch first-ballot Hall of Famer. Rodriguez displayed his shrewd business acumen long before he retired following


John Daly Age: 54 Career Earnings: $14.2 million from golf, much more in offcourse earnings. Claim to Fame: Won two golf “major” tournaments, including the 1991 PGA Championship as the ninth alternate. Financial Shame: Claims to have lost $55 million to gambling. July 2020 » InsuranceNewsNet Magazine


COVER STORY HALL OF FAME, FALL OF SHAME the 2016 season. Following the 2007 season, he opted out of his original monster contract and signed an even bigger 10-year, $275 million deal. According to Spotrac, A-Rod has made more than $450 million in MLB salary to date, which included $5 million in combined 2019 deferred payments from two of his former clubs. Rodriguez’s primary business ventures are made through A-Rod Corp., established in 2003. The firm oversees extensive investments in real estate, sports and even capital management funds. Its creative investments include Sonder, a home-rental company Rodriguez described to CNBC as “kind of a richer man’s Airbnb,” and Acorns, the microinvesting app that lets users invest their spare money. Rodriguez is engaged to actresssinger Jennifer Lopez, forming a power duo who partner in some business

Bildbyran/ZUMA Press/Newscom

Dennis Rodman Age: 59 Career Earnings: $27 million from his NBA contracts. Claim to Fame: Was part of five title-winning teams and led the NBA in rebounding seven times. Financial Shame: Racked up $860,000 in child support arrears.


InsuranceNewsNet Magazine » July 2020

ventures. According to a recent report, Lopez and Rodriguez are worth a combined $700 million.

Brian Orakpo and Michael Griffin

Ex-athletes do a lot of different things with the money and time they have upon leaving their games behind. But not many ex-football teammates partner to open a cupcake shop. That’s exactly what Brian Orakpo and Michael Griffin did in 2018, when their Gigi’s Cupcakes franchise opened in Bee Cave, Texas. The pair — longtime teammates on the Tennessee Titans — are joined by a third friend and partner in the business, Bryan Hynson. Gigi’s Cupcakes is a Nashville-based franchise that has more than 100 stores in 23 states. Griffin told ESPN that he and Orakpo were involved in all aspects of planning and building the business.

“We can talk football all day. But we had to learn about business,” Griffin told the network. “Learning how to start up an LLC to getting someone who is going to be working with your account to financing, just a lot of things we take for granted being professional athletes.” The three partners described an intense three-week period working from 6 a.m. to 8 p.m. learning how to open the shop, decorate, bake every cupcake they sell, be the cashier and close the shop. More time was spent learning the financial side of things. The partners came up with a clever marketing tool in 2018 when they filmed a Microsoft Surface Pro 6 commercial about their Gigi’s franchise. Since then, they have continued to make funny YouTube videos to keep the momentum going. “Cupcakes are a great business,” Orakpo says in their commercial.

HALL OF FAME, FALL OF SHAME COVER STORY “As long as you don’t eat the profits,” Griffin chimes in.

Nicole DeBoom

As of press deadline, professional triathlete Nicole DeBoom was seeking a partner for her women’s sports apparel firm Skirt Sports. The business was hit hard by COVID-19, and adding a partner is just another shrewd business move for DeBoom, who spent the past 15 years building the company into a successful niche retailer. “We’ve had a trifecta [of challenges] over the past six months,” DeBoom told The Daily Camera in Boulder, Colo. She described those challenges as distribution partnership “setbacks” with Amazon, tariffs on imported materials to make the apparel, and COVID-19. But challenges are nothing new for DeBoom. Growing up outside Chicago, she played every sport possible. At 16,

she qualified for the Olympic trials in the 100-meter breaststroke. But swimming was not to be her sport. After graduating from Yale with a degree in sociology, DeBoom transformed herself into a triathlete. The sport is a test of endurance, with many miles of swimming, biking and running. She turned pro in 1999 and began winning races. But it wasn’t long before DeBoom realized she didn’t have the right training and racing clothes. “I decided that I would turn the women’s fitness clothing market upside down and create something that had never been done before: a running skirt,” DeBoom says on her website. “My goal was to inspire and motivate myself and other women who couldn’t find what they wanted in the market.” Skirt Sports opened for business in 2004, and DeBoom remains the CEO. Success in sport and business came

quickly, with DeBoom winning the 2004 Ironman Wisconsin wearing a prototype of her first-ever running skirt. In 2007, the company surpassed $1 million in sales, and business remains strong, even as COVID-19 brings new challenges. “I’ve encountered obstacles big and small, caused by me or out of my control, through the ever-changing world of women’s athletics, and I continue to persevere, even when the future is impossible to predict,” DeBoom said in a January interview with Authority Magazine. InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton@innfeedback. com. Follow him on Twitter @INNJohnH.


Marion Jones Age: 44 Career Earnings: Received $70,000 to $80,000 per race, plus $1 million a year in endorsement deals from brands like Nike. Claim to Fame: Won five gold medals at the 200 Summer Olympics. Financial Shame: Fell heavily into debt and served six months in prison, in part for her role in a check counterfeiting scheme.

July 2020 » InsuranceNewsNet Magazine


the Fıeld

A Visit With Agents of Change


BIG PRACTICE Brian Heckert and his children prove you can have a national footprint no matter where you are. BY SUSAN RUPE 24

InsuranceNewsNet Magazine » July 2020



SM Wealth has its headquarters on Wall Street. That’s Wall Street in Nashville, Ill., a town of 3,200 people in the southwestern part of the state. Brian Heckert, the firm’s founder, not only knows everyone in town, but is related to almost all of them. Despite its location in a rural corner of the Midwest, FSM Wealth has expanded through acquisition and through its use of virtual technology to create a planning powerhouse. Many of FSM’s team work

Brandon Heckert

remotely. But whether they are working in California or in Kentucky, their goal is to give every client the best service and experience possible. FSM Wealth also stands out for the makeup of its team. At a time when many advisors worry about who will continue their practice after they retire, three of Heckert’s four children are active in his business. Sons Michael and Brandon are advisors, and daughter Erin Soria is director of marketing. But although the family members are close, they don’t spend their workdays tripping over each other. Michael works remotely from FSM’s office in Lexington, Ky., and Brandon works remotely from San Jose, Calif. FSM Wealth also has physical offices in Springfield, Ill., and Janesville, Wis. The company has five advisors and more than $400 million in assets under management. “We do business across 34 states. We have a national footprint,” Brian said. “Some of that is from acquisitions. A lot

of it is by design.” Before FSM Wealth made the move to virtual client meetings, Brian would drive 60,000-65,000 miles a year to go on appointments. “So I always had worked a wide area. I used to spend more time traveling than I did in front of clients. Now it’s the opposite.” Brian, 56, has spent most of his career in a multigenerational practice. He started in the life insurance business in 1985 at age 21, working for an advisor whose son and daughter also were in business with

Erin Soria

him. “They did life insurance, they did financial planning, they did 401(k)s and retirement plan administration.” In those early years, Brian worked mostly with older clients and with business clients “because I didn’t want to work a lot of evenings.” Relating to older clients was easy, Brian said. “You just have to show up and care,” he said. “I think a lot of younger advisors feel intimidated dealing with older clients. But most of the older generation simply want honest answers, and they want someone who will be around when they need them. They always want a younger doctor and a younger advisor. I never looked at my age as a disadvantage. I always looked at it as an advantage because I had time to work with them, to build a clientele and do what they needed, where a lot of the older advisors didn’t have the patience or time to work with them.” In 2001, Brian bought out the firm’s

partners and acquired a third-party administrator. He eventually went on to acquire 12 other companies. The growth continued even as Brian spent six years on the Million Dollar Round Table’s executive committee and was the organization’s 2016 president. “Even though I spent about 60% of my time running the organization, our firm still came within a couple of percentage points of doubling our business during that time,” he said. Brian said that in 2011, about 60%65% of his firm’s business was in 401(k)

Michael Heckert

administration and 30%-40% was in insurance and investments. Today, the 401(k) business makes up about 30% of the firm’s activity, with the rest driven by investments. FSM Wealth offers financial planning, retirement planning, investment management, risk management, estate planning, succession planning and higher education planning. The 401(k) business “drives a lot of our rollover opportunities, and a lot of our planning opportunities,” Brian said. All of his company’s 401(k) plans offer their participants what he called “full financial planning.” “It’s not a gap analysis, where they sit down to figure out how much they should put into their 401(k) plan,” he explained. “They’re offered a virtual meeting, whether they’re a $30,000-a-year employee or a $3-million-a-year employee. What this allows us to do is help more people. Not everybody becomes an investment client, July 2020 » InsuranceNewsNet Magazine


the Fıeld

A Visit With Agents of Change

but everybody builds a reputation base and a referral base for the firm.” Brian said his firm’s leadership decided several years ago to become more of a feebased, full financial planning firm. They began using financial planning software that could take clients from problems to

even if they’re half a country away.” Another factor in FSM Wealth’s success is its team approach with clients. Advisors conduct joint meetings with clients, letting clients know there are multiple professionals looking out for them. Brian described his firm’s clientele as

ferent routes before ending up in financial services. The children’s entry into the firm didn’t occur haphazardly, though. It reflected Brian’s dedication to planning. “In order for a firm to grow, it has to be built upon a team approach,” Brian said. “If everybody’s doing everything,

“I think a lot of younger advisors feel intimidated dealing with older clients. But most of the older generation simply want honest answers, and they want someone who will be around when they need them.”

FSM Wealth has its headquarters on Wall Street in Nashville, Ill.

solutions. “We have a presentation that we use to show people, you have an issue? Here’s how we help you solve your issue.” In 2010, FSM Wealth began making the move to virtual meetings with clients. “We’ve been an early adopter of technology and we’re paperless, but what we’re most proud of is that whether a client comes into the office or is having a virtual meeting, the meetings are identical,” Brian said. “You sit down with a live advisor and a screen. What we’ve done is eliminate the inefficiencies of travel and paper preparation. Our presentation is digital. We can give our clients instantaneous service because we don’t have to schedule a trip to see them.” Brian said his firm’s model includes using support staff to free up advisors to spend more time with clients. “It’s similar to a surgeon’s office, where they do surgeries all day long. But the preparation, making sure the tools are in the right spot, are all handled by other professionals. In our model, the advisor can advise and not have to worry about the things that take time away from seeing clients. We’ve been able to add value for clients, 26

InsuranceNewsNet Magazine » July 2020

mostly blue-collar or gray-collar workers. “We work with everyone from individual 401(k) participants who are just starting out to the employers who are putting those plans in place. Our average client has an average rollover balance somewhere between $250,000 and $500,000. And they’re mostly ignored by a lot of advisory firms because they have a big 401(k) balance and maybe $20,000 of investable assets, but they have no direction. So by helping those clients, all of a sudden a few years go by and now they have a half-million dollars in their plan, they retire, they may inherit some money, they’re looking for additional advice and they call us. “I would rather take on ten $250,000 clients than one $2.5 million client who is high-demand. We have some very good clients on the upper end, but we found that most people in the $250,000 range need advice and have nowhere to go because everybody’s going after that million-dollar client.” Brian’s children who joined him in the business are making their own mark on the firm, although some of them took dif-

then nobody has the time to do anything. So we developed areas of responsibility based upon strengths and based upon knowledge.” Brandon, 26, began working for a financial company in 2014 and joined his father’s firm in 2017. He moved to San Jose two years ago and has been working virtually ever since. Moving from a town where everyone knew him to a large city and starting from scratch was a challenge at first. “I was nervous that honestly that it wasn’t going to work out, and that I wasn’t going to be able to produce as much,” Brandon said. “We already had been doing a number of remote client meetings before I moved here, so that gave me a little bit of comfort. But the way I started to grow was that through our company’s acquisitions, we have a lot of different clients who weren’t aware of what we do on a larger scale. Maybe they had a life insurance policy with us or a 529 plan, but they weren’t getting the full experience. So I would ask them if they wanted to do a virtual review. That really took off.” Brandon said he and the other advisors


began reaching out to clients who hadn’t been contacted in a while or who had only one contract with the firm, let them know about the changes occurring in the company, and asked for a virtual meeting. “Now I’m doing 10 virtual meetings a week. I think my mind was the only boundary, with me thinking I couldn’t do it. Once I realized that doing these virtual meetings is not that hard and I can get the clients to agree to them, business is going on as usual.” Michael, 31, was a civil engineer before joining FSM Wealth in 2018. He focuses on the firm’s 401(k) and planning divisions, and said his engineering background serves him well as he builds financial plans for clients. “When I was in the civil engineering field, I worked as a project manager for a construction company on construction

“So my brothers and my dad realized that they had a position for me with marketing. Since I started, I also became more involved in some of the overhead and administrative responsibilities and human resources responsibilities.” A fourth Heckert child, Christopher, is a civil engineer and not involved in the financial services business. Steven Plewes is a business coach who has worked with the Heckert family. He said that each family member has a different strength. “Brian is a visionary. He isn’t afraid to take a risk, and he’s not afraid to fail. He’s OK with releasing control. Once he sets his vision, he allows people to rise to that vision. Michael is an implementer. He thrives on structure. Brandon is a natural salesperson. And Erin is the enforcer; she holds everyone accountable.”

“If everybody’s doing everything, then nobody has the time to do anything. So we developed areas of responsibility based upon strengths and based upon knowledge.” sites,” he said. “So my job was to keep track of the budget, keep track of the schedule and organize all the different subcontractors. And so, in general, what I do hasn’t changed. I still have a project. I still have a deadline, I still have a budget, and I’m still working with the different vendors to get the products that we need.” Michael said a big part of his role is to oversee the planning software used by the firm. “I work on building the financial plans and coming up with different scenarios so we can stress-test all the different plans for clients.” Erin, 34, became director of marketing in July 2019. She spent 13 years as an interior designer before joining the firm. “I was ready for a bit of a life change and ready to slow down a bit,” she said.

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Brian said that he may have opened some doors for Brandon, Michael and Erin, but “it’s their abilities that have taken them this far. “They have a lot of strengths that I don’t have. And my goal is to free up their ability to do what they do best and get out of their way.” 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 Follow her on Twitter @INNsusan.

July 2020 » InsuranceNewsNet Magazine



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Term Life Premium Up 8%, Offsetting Tough 1Q Term life insurance new premium rose 8% in the first quarter,

Shares Of Life in 1Q


35% Whole life 24% Term Life 24% IUL 10% Fixed UL 7% Variable UL

with 40% of term life writers reporting double-digit increases, according to LIMRA data. The increase in term premium is the highest since the second quarter of 2007. SOURCE: LIMRA Outside of term life sales, most of the remaining life insurance products posted sluggish first-quarter sales, LIMRA reported. The total number of individual life insurance policies sold in the first quarter fell 1%, compared with the same quarter of the prior year. Universal life new annualized premium fell 3%, driven primarily by a decline in fixed UL sales. Total universal life held 34% of the total U.S. life insurance market. Indexed UL new annualized premium decreased 2% in the quarter, with 40% of IUL writers reporting positive growth. IUL represented 70% of UL and 24% of all individual life premium. Whole life new annualized premium dropped 1% in the first quarter, the second consecutive quarter of declines. WL premium represents 35% of the total individual life insurance market. This is the lowest market share for WL since 2015. Welcome to the team!


Other parts of the business world may have ground to a halt because of COVID19 restrictions, but agent recruiting wasn’t one of them. LIMRA found all the companies it surveyed are still recruiting agents. But even though COVID-19 has presented challenges to getting newer agents licensed, LIMRA found that 65% of the companies it surveyed said they are not focusing their recruitment efforts on more experienced agents. Companies are training and sourcing candidates in both new and traditional ways. They’re currently using more virtual conferencing, telephone interviews and virtual classrooms, while also continuing to use traditional methods like ZipRecruiter, LinkedIn and Indeed. In some cases, companies have had to delay the start dates for inexperienced agents who still needed to pass exams in order to sell insurance. Most companies, however, have continued to onboard new recruits. DID YOU





COVID-19 led to social-distancing practices and volatile market conditions that caused disruptions in many life insurance companies’ processes. LIMRA worked with the Society of Actuaries and Oliver Wyman to find out the potential effects of the pandemic on the insurance industry. Distribution (social distancing) Pricing/new business profitability In-force profitability Reserves and capital Customer demand/value proposition Product design Regulatory constraints (Nonforfeiture, 772) Regular bandwidth Liquidity Other

91% 89% 77% 60% 51% 46% 43% 37% 37% 11%


They found that about 90% of the companies they surveyed rated distribution/ social distancing as a concern, while 89% were concerned about pricing/new business profitability as a concern, and 77% were worried about in-force profitability. There also have been changes in underwriting for life insurance products. Twothirds of respondents have changed their underwriting process to address the lack of access to traditional paramedical testing. Of those who have changed, about

Life insurance is the one form of insurance that we’re all guaranteed to use at some point. That’s why I think it’s just on people’s mind more so during times of crisis. — Josh Butler, president of Butler Benefits and Consulting, Amarillo, Texas

two-thirds are using attending physician statements in place of fluid requirements, two-thirds are increasing automated/accelerated underwriting limits and about one half are using telephone or FaceTime screenings.


COVID-19 has had the biggest short-term effect on life insurance in two ways: 1. Insurers extending grace periods for paying premiums. 2. Placing a greater emphasis on accelerated underwriting. Those were among the insights from Nancy Bennett, senior life fellow with the American Academy of Actuaries. COVID-19 has prompted a number of insurers to voluntarily extend grace periods, while some states have mandated those extended grace periods. Accelerated underwriting already was gaining traction in the life insurance world before COVID-19 hit, but the restrictions placed on nonessential medical treatment as a result of the pandemic have moved accelerated underwriting more to the forefront, Bennett said.

Magic Johnson’s life insurance company, EquiTrust Life, will provide $100 million in loans to small businesses owned by women and minorities. Source: The Wall Street Journal

InsuranceNewsNet Magazine » July 2020


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How The Life Insurance Industry Can Cut Racism’s Deep Roots American College President George Nichols relays his own experience to help others understand the struggle in black communities.

“At my age and at my level of success, I still have to calculate how I make sure I’m not perceived as a threat.”

By Steven A. Morelli


eorge Nichols knows that when he does his four-tofive-mile walk every day, he is not the president of The American College of Financial Services. He is not the former top-level executive of New York Life. He is not the former Kentucky insurance commissioner. He is a threatening black man. People who know Nichols would likely see him as the affable 60-year-old man and capable leader he is. But Nichols knows that is not what many other white people see. “At my age and at my level of success, I still have to calculate how I make sure I’m not perceived as a threat when I walk into an environment where I may be the only black,” Nichols said. His is the only black family in his upscale neighborhood, so he knows the drill when he goes for his walk. He strides briskly, doesn’t look at anybody’s house too intently, greets everybody and wears bright colors so the neighbors can recognize him. But that does not mean every police officer driving through the neighborhood recognizes him. Like a month or so ago during his walk when Nichols was wearing the hood up on his jacket in the rain. He saw a police car approaching, so Nichols put his hood down for the police officer to see it was him, while Nichols hoped it was an officer who would recognize him. “I knew that’s what I needed to do to be safe, so he could see it was me,” Nichols said. “But then I also thought if he’s one 30

InsuranceNewsNet Magazine » July 2020

who sees me all the time, he probably looked at me and said, ‘Why the hell does he have his hood off? It’s raining.’ But in my world, I have to think about that.”

In His Skin

Nichols has to be aware of his skin color whenever he is in a predominantly white environment, which is most of the time. If he has a complaint or an issue in a store or restaurant, he makes very sure his tone is as even and gentle as possible. When he gets on an elevator with a lone, unknown white woman, he makes certain to appear as unthreatening as he can be. Nichols clearly does not relish speaking about these experiences, most likely preferring to talk about American College initiatives and how to advance the insurance and finance industries. But the death of George Floyd, the man killed by a policeman who knelt on his neck for nearly nine

minutes, pushed Nichols to speak out. In a letter Nichols wrote and posted on American College’s website, he lamented witnessing yet another injustice in a long line of them. And while he condemned the destruction wrought by the riots, he said it can’t be surprising that rage is boiling over. He hoped that this time there might be a better outcome. “I really hope our nation is ready to listen,” Nichols wrote. “But, more importantly, I hope that those marginalized and mistreated for so long are heard and understood. Because this is bigger than a commitment to hiring a few more people of color or setting up a diversity council or cloaking the systemic struggle black people face with a program that means well, but stops a few steps short of feeling uncomfortable.” That is why he is venturing out of his own comfort zone to speak about the ex-

HOW THE LIFE INSURANCE INDUSTRY CAN CUT RACISM’S DEEP ROOTS LIFE perience of what it is like to be black in America, no matter how high on the ladder that person has climbed. And Nichols had a lot of climbing to do, rising from a childhood spent in a Kentucky housing project. It was in fact a white policeman who opened the first door of opportunity for him. Nichols was a sixth-grader in early 1970s Bowling Green, Ky., where segregation was still a fact of life. The relationship between African Americans and

was a discussion around having a conversation,” Nichols said. “And there were companies that had that conversation. And I applaud those companies.” But when crisis after crisis passed without real change, Nichols had to wonder what’s the point of the conversation? “When we have it, are you listening?” Nichols asked. “And even if you’re listening, did you really hear me?” And what is it that he wants people to hear? One is to recognize the inherent disadvantage that black Americans suffer.

be CEO? Is that the reason? It’s hard for me to believe that.”

Taking Steps

Nichols, as the American College president, and the leaders of other key life insurance organizations signed a letter pledging to work together against racial inequality. It was signed by the leaders of the American Council of Life Insurers, the Association for Advanced Life Underwriting, the National Association of Insurance and Financial Advisors, and

“There are four black CEOs of Fortune 500 companies in the U.S. — four. We make up 12% of the population. And on the Fortune 500, we have four. I know a lot of blacks who work their butts off, and they’re smart. And you tell me we only have four.” the police was as fraught as it was everywhere else. But not every white cop was the same. This one opened the gym after school to get the kids off the street and onto the basketball court. This policeman also saw that not every black kid was the same. “He noticed how good I am,” Nichols said. “And he tells the varsity coach. And then the coach comes down and sees me. And then he goes back to his white neighborhood and tells his friends that there’s this sixth-grader that is coming up who’s really a great basketball player. So my name is out there. So when I arrive in junior high and my hometown that now has a mixture of white kids and black kids, and white kids have heard about me.” That first open door led to others that allowed Nichols to show his stuff athletically and intellectually as he attended college, rose through professional ranks in health care and health insurance, and eventually became the state’s first black insurance commissioner. From there, he became a key executive at New York Life for decades before becoming the president of The American College of Financial Services. During his career, he has watched racial incidents erupt, call attention to injustice and then fade. “During Trayvon Martin, during Ferguson, during Michael Brown, there

Nichols is aware that white people often look to him as an example proving the rule that anyone can succeed in the U.S. if they apply themselves. But he wants people to understand that he is the exception, not the rule. “Someone is sitting there saying, ‘Oh my God, George! You’ve had an unbelievable career. You’ve made it. You have a nice home. You have a nice car. I don’t understand how all these issues are there,’” Nichols said. “Well, wait a minute. You can’t disregard going all the way back to slavery and not understand the implications of that.” The implications are the hundreds of years of inherited inequality, with generation after generation passing through slavery, Jim Crow and institutional disadvantage. If it were only a matter of hard work, there would be far less inequality today. “If that were true, then would you expect to see more diversity when you look at an organization or any other thing that we do in this country?” Nichols asked. “I read an article today that said there are four black CEOs of Fortune 500 companies in the U.S. — four. We make up 12% of the population. And on the Fortune 500, we have four. I know a lot of blacks who work their butts off, and they’re smart. And you tell me we only have four. Is it that blacks don’t want to

LIMRA, LOMA and LL Global. The letter is one of many public statements issued on the issue. But what can organizations, companies and individuals in life insurance do? “I think that where a lot of organizations commit dollars, which I’m so grateful for, in investing in the black community, I’d really like to see not just the gift, but the commitment,” Nichols said, adding that includes guidance. Nichols had some steps: » LISTEN: Listening to hear means not just waiting for the crowds to say their piece and go away. It is understanding that life is fundamentally different for black Americans, from inferior prenatal care all the way through the stages of life underserved by health care, education, the legal system and business. It is not for a lack of trying to pull themselves up by the bootstraps; it’s for the lack of bootstraps. » COMMIT: Companies and individuals can recognize that they can make a difference. Nichols credits a long line of white men, starting with that police officer who helped him by giving him an opportunity. » INVEST: The dollars are important, but so are the time and attention. A committee and a report are not going to get the job done. July 2020 » InsuranceNewsNet Magazine



George Nichols says young advisors of color need help from mentors and study groups, which tend to be diverse in business types but not in race, ethnicity or gender. Behind him in the board room of The American College in King of Prussia, Pa., is a painting of Davis Gregg, the longest-serving president of the college, who greatly expanded the institution during his tenure between 1954 and 1982.

» SHOW UP: Black communities are traditionally underserved by businesses ranging from supermarkets to financial services. Recruiting African Americans and other minorities is a start, but if those groups don’t see the organizations in their communities, those efforts are less likely to permeate. Nichols said while the money that organizations donate is needed, change will happen with authentic attention, the kind he got when he was coming up — “The fortune that I have had in getting mentors who said, ‘I’m going to bring you in. And I’m going to help develop you. And instead of saying, go left instead of right, I’m going to teach you why left is better than right, or why right is better than left.’” In recruiting efforts, quotas are not always effective because the focus is on the number rather than the goal, Nichols said. Many companies have recruiting 32

InsuranceNewsNet Magazine » July 2020

programs, and many of them don’t work well. It is time to rethink those approaches, he said. “Most successful financial advisors I know are probably part of a study group,” Nichols said. “And they’re part of a diverse study group — not diverse in ethnicity, or even gender sometimes, but diverse in business practice. Well, if we have historically not had a lot of black financial advisors, and they can only create study groups among themselves, how much do you think they’ll learn? So, could we get some of those white financial advisors?” The most important part of the list is the “showing up.” Successful recruiting is an important step, as is serving black and other minority communities. But serving is not just a matter of making sales. “People, organizations, financial services firms, see today that the spending power of the black community is huge,” Nichols said. “So, they want a piece of

that. But in addition to taking a piece of it, I’d like to see them do more to help grow it, because another part of the challenge for the black community is an economic issue. And we have to help them. And that’s knowledge.” Part of The American College’s mission is spreading financial literacy, and Nichols wants that to expand to financial well-being. Life insurance has a long history in black communities of providing low-face, final expense insurance. In fact, one of the few white people Nichols ever saw in the projects was a debit agent who came by with a small book to collect $2.68 for his mother’s $500 whole life policy. That tradition should grow into the generational wealth that has helped sustain advancement in white communities, he said. Even in his own case, he learned the important basics but not the secrets to wealth that sustains generations. “Here’s what George was taught: Get a job, pay your bills, put some money in insurance and hope you have a little bit left to save it. What stock market are you talking about? What investment are you talking about? I mean, what insurance plan are you talking about? My parents said, ‘Just have enough insurance to bury you.’ They never said, ‘And one of the best ways for us to transfer wealth, despite what we may have done in our lifetime, is life insurance.’ We didn’t discuss it that way. It was a burial policy.” The life insurance industry has the opportunity to be a fulcrum for deep change spanning generations by teaching skills and values. “You help people learn and develop on their own, and help them grow and develop on their own. And so we make gifts, and again, those gifts do great work,” Nichols said. “But if we abide to do this through understanding and empathy, you have to actually be in it to understand it.” Steven A. Morelli is editor-in-chief 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 smorelli@


1Q Annuity Sales Mixed As Pandemic Stings

All Deferred Annuity Sales


31.2% 18.9%

SOURCE: Wink’s Sales & Market Report


Some annuity products resisted the Fixed Annuities 1.3% first-quarter economic devastation by Multi-Year Annuities posting good sales numbers. Structured Annuities Indexed Annuities Variable Annuities Deferred annuity sales, in particular, remained strong in the first quarter at $52.7 billion, a slim 1.1% decline, according to Wink’s Sales & Market Report. The pandemic effects came late in the first quarter, industry sources note, and their impact might be seen in second quarter results. “It is amazing that annuity sales are only down in the single digits, given the devastating effects that COVID-19 has wreaked on the annuity industry,” said Sheryl J. Moore, president and CEO of Moore Market Intelligence. Variable annuity sales in the first quarter were $20.7 billion, a decline of 3.1% as compared to the previous quarter, and an increase of 15.1% as compared to the same period last year, Wink reported. Multi-year guaranteed annuity sales in the first quarter were $9.9 billion, up 9% when compared to the previous quarter, and down 32.4% when compared to the same period last year, Wink reported. to “offer the simplicity and lifetime income stream of a defined benefit plan, combined with the flexibility and choice of a defined contribution plan,” the company said in a news release.


Annuities in retirement plans have long held promise, and one firm is closing deals to make it happen. And it’s the biggest firm in the business. BlackRock reached two recent deals with Brighthouse Financial and Equitable to offer annuities in retirement plans. Plan participants will have the option to use a portion of their plan account balance at retirement to purchase a fixed individual retirement annuity that will provide guaranteed lifetime income, the insurers said. The annuity option will be available to U.S. employers to provide to their employees through their defined contribution retirement plans. BlackRock’s LifePath Paycheck seeks DID YOU



We’ve seen crediting rates going back up but maybe not where they once were preMarch.


— Jamie Branyan, annuity product and operations manager with CANNEX

unanimously approved the measure in February. Livingston was a financial advisor and franchise owner of Ameriprise Financial in Peoria, Ariz., from 1992 to 2012. He is a lifetime member of the Million Dollar Round Table. Insurance executives are generally happy with the best-interest rules, which impose obligations of care, disclosure, conflict of interest and documentation on producers selling products in the state.


States are slowly embracing bestinterest rules for annuity sales endorsed by the National Association of Insurance Commissioners earlier this year. Arizona is bidding to become the second state to adopt rules based on the NAIC model. The Arizona House of Representatives sent a best-interest regulation to Gov. Doug Ducey in late May. Ducey had not signed the bill as of press deadline. The Arizona House voted 36-24 to approve the measure, sponsored by Sen. David Livingston (R), District 22. The Arizona Senate


Fidelity National Financial, the leading provider of title insurance and closing and real estate settlement services, completed an acquisition of FGL Holdings, a leading provider of fixed indexed annuities. Under the terms of the agreement, Fidelity issued approximately 27 million shares of FNF common stock and paid about $1.8 billion in cash to former holders of FGL shares. The deal became official June 1.

Prudential introduced its first indexed variable annuity product, FlexGuard. Source: Prudential Financial

July 2020 » InsuranceNewsNet Magazine



Annuities Begin To Even Out After A Wild Springtime Ride


nnuity carriers are always making changes to their products. But those changes came fast and furious during the month of March, as the COVID-19 pandemic sent shock waves through the financial industry. Will the changes be permanent? Will there be more of them? CANNEX held a webinar to give an overview of fixed annuity product changes in response to COVID-19. “The onset of these changes was both extremely rapid and severe — much more than we saw in the 2008 financial crisis,” said Tamiko Toland, head of annuity research for CANNEX. March 13 was the day when CANNEX started to see the wave of changes hit the annuity market, said Jamie Branyan, annuity product and operations manager with CANNEX. “From March 13 to March 20, we saw 12 companies change their fixed indexed annuity rates,” he said. “And from March 23 to March 30, we saw 13 companies change their FIA rates.” Compare that with the week before March 13, when six companies changed their rates. In a further comparison, the second week of February and the second week of January each saw four companies change rates. “My point is that we really started seeing three times the amount of changes we normally would see during that period,” he said. “So, in the course of two weeks, we saw 25 changes. It was coming fast, it was coming furious.” The first thing carriers changed was the crediting rates, Branyan said. “We also saw fixed rate annuity product clo34

InsuranceNewsNet Magazine » July 2020

with those products also can impact what changes a carrier can make quickly and what changes it may have to refile. Looking at fixed annuities, Branyan said CANNEX has seen product closing and credit rates drop — some down all the way to the minimum. “We’ve seen deposit bands close, so if a product has a low band and a high band that offer different rates, we’ve seen a lot of the lower bands close and keeping the

SPIA Pricing During COVID-19

Monthly Income Payment* ($10 increments)

By Susan Rupe

sures, and changes to income riders and closures.” Branyan said insurance companies and distributors were taking different approaches to their annuity products in the midst of the COVID-19 turmoil. “Some of these responses were probably determined by the diversity of their current product offerings — the better mix they have between fixed and variable products. The more diverse that is, the


SPIA pricing took a dip in late March, but rebounded over the next two months.

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Carrier A

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Carrier C

Carrier E

Carrier D

y-18 Ma

Carrier F

*Single life with 10-year guarantee, CA, 65-year-old male, 1 month deferral, non-qualified fund, $100,000 premium

DIA Pricing During COVID-19 Monthly Income Payment* ($20 increments)

After a wild month of changes, there are signs that some annuity carriers may be ready to bring some products back to market.


DIA pricing dropped for much of March but quickly rebounded.

9 2 2 3 3 6 4 r-0 r-0 ar-16 ar-2 c-0 an-0 eb-0 eb-2 De J F F Ma Ma M M

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Carrier B

Carrier C

4 6 0 0 7 r-3 r-0 r-13 pr-2 pr-2 ay-0 y-11 ay-18 Ma Ap Ap A A M Ma M

Carrier D

Carrier E

Carrier F

*Single life with 10-year guarantee, CA, 65 year-old-male, 5-year deferral, non-qualified fund, $100,000 premium

more options they have in the changes they can make and what products they can use to make those changes.” In addition, Branyan said, the amount of business a carrier already has on the books, the risk profile of those products and the filing strategy they have used

higher bands open,” he said. CANNEX also has seen guarantee periods close, so that multiyear guaranteed annuities that previously had anywhere from two to five crediting options have gone down to two. The message from distributors of some annuity products Branyan said, is that

ANNUITIES BEGIN TO EVEN OUT AFTER A WILD SPRINGTIME RIDE ANNUITY “the rates are not where we want them to be, so we want you to remove the product from your platform because we no longer want to promote the product. When the rates do come back, we’ll let you know and we’ll turn it right back on.” Now some carriers are returning the products to the market, Branyan said. There are some signs that the annuity market may be taking some baby steps back to life. “We’ve seen products working their way back to being competitive,” he said. “We’ve seen crediting rates going back up but maybe not where they once were preMarch. And we’ve seen income rider rates going up on certain products. But interestingly, we’ve also seen them decrease on other products. “Depending on the block of business and the different levers that the insurance company has to be able to pull will determine where they will tamp down to be competitive versus which product they are pulling back down during this time. “We’ve also seen a carrier shut down a product and three weeks later come to us


and say we’re ready to sell it again.”

their rates take a dramatic drop during the March 16-March 23 weeks compared with the months of December and January, Dundas said. But although DIA rates stayed relatively flat through May, she said, they are beginning to climb back to middle ground. The rates on most carriers’ DIAs haven’t returned to the highs they saw in December and January. Except for changes in pricing, Dundas said she has not seen major COVID-19related changes to income annuities “because carriers are mostly controlling this product through their rate updating, so they’re able to submit their rates and adjust to the market as quickly or as often as they need to.”

Income Annuity Pricing Took Roller-Coaster Ride

Income annuity carriers also made changes to their products at an accelerated rate in March, said Amanda Dundas, CANNEX business analyst. “Carriers that only update, say, every 1-2 months saw an increase of up to 2-3 updates in the month of March alone,” she said. Forty percent of the carriers that list their products on the CANNEX exchange increased the frequency of their changes in March, while 18% made changes in April. Single premium immediate annuities hit a sharp rate decline in the weeks of March 16 and March 23, Dundas said. At least three carriers spiked their rates downward and then the week of March 30, about half of the carriers had a spike upward. “As we continued into April and May, we saw prices begin to follow their own path, with some ending up just under where they were in January and one actually higher than it was in January,” she said. Deferred income annuities also saw

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.






July 2020 » InsuranceNewsNet Magazine



1 in 4 Know Someone Who Lost Coverage Nearly one in four people know

• 68% of respondents do not know their health insurance options if they were to lose coverage. • 46% think “Medicare for All” would be the best health insurance option for those who are uninsured. • 22% know someone who has lost his or her health insurance during the pandemic. • 8% have lost their health insurance during the pandemic. SOURCE:

someone who has lost their health insurance during the COVID-19 pandemic, but 68% said they don’t know what their health insurance options are if they lost their coverage, according to a recent survey. Forty percent said it should be the government’s responsibility to ensure that people have coverage during a health pandemic. Respondents of all ages believe health insurance directly correlates with COVID-19 treatment: 56% think those with insurance are receiving better care than those without insurance, and 33% believe seniors who have a Medicare Advantage plan are getting better COVID-19 treatment. In terms of treatment, more than 90% of respondents say the COVID-19 vaccine should be free for everyone; 78% say they will get the COVID-19 vaccine; and 64% say the vaccine should be required. Forty percent of survey respondents avoided going to a hospital for a health problem other than COVID-19 due to fear of being infected.


Many Medicare recipients could find themselves paying less money for insulin under a deal announced by the Trump administration. Medicare recipients who choose a drug plan offering the new insulin benefit would pay a maximum of $35 a month starting in 2021, and this would result in an estimated $446 in annual savings. Fluctuating cost-sharing amounts that are common now would be replaced by a manageable sum. The insulin benefit will be voluntary. Medicare recipients who are interested in the benefit must be sure to select an insurance plan that provides it during open enrollment. The stable copay for insulin is the result of an agreement, brokered by the administration, between insulin manufacturers and major insurers, Medicare chief Seema Verma told the Associated Press. DID YOU




10-Year Trends in Disability Data



Musculoskeletal issues are a bigger driver of long-term absence from work today than ever before. Long-term disability claims for these conditions rose 40% since 2010, according to Unum. The problem is even more pronounced in men, where these claims rose 62% over the past decade. One in two adult Americans live with a musculoskeletal condition — the same number as those with cardiovascular or chronic respiratory diseases combined — the World Health Organization reports. The cost of treatment and lost wages related to musculoskeletal conditions is estimated at $213 billion per year. “We often see these issues among

QUOTABLE If this pandemic has done nothing else, it has shown how critical access to health care is. — Kansas Gov. Laura Kelly

workers who have jobs that require heavy lifting, repetitive motion or prolonged sitting,” said Marcy Ledford, director of health and productivity at Unum. “Aging can also be a factor, as well as lower activity levels, obesity or co-morbid conditions.”


Cancer deaths declined more in states that expanded Medicaid under the Affordable Care Act than in states that did not, research found. The ACA permitted states to expand Medicaid eligibility and offer subsidies to help people buy health insurance. Twenty-seven states and Washington, D.C., did that, and 20 million Americans gained coverage that way. The other 23 states did not expand Medicaid benefits. Researchers looked only at deaths in people under age 65, who stood to benefit from the change because those older already were covered by Medicare. The cancer death rate fell throughout the U.S. from 1999 to 2017 in that age group, but more in states that expanded Medicaid - 29% versus 25% in states that did not. In states that expanded coverage, the change meant 785 fewer cancer deaths in 2017.

About half of Americans said they would get a COVID-19 vaccine if one were created. Source: Associated Press

InsuranceNewsNet Magazine » July 2020

Source: Associated Press-NORC Center for Public Affairs



o t g n i n n a l P ? s e i t i u n n a l sel ! s i h t e e s a t t o g You

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Visit and discover the easy route to compliant, prolific annuity production.


Accident insurance can help an employer’s workforce fill the medical gaps created by HDHPs.

The Right Benefits Lead To Lower Workers’ Comp Claims Voluntary accident and disability insurance can help your employer clients reduce their costs.


By Michael Naumann

igh deductible health plans are becoming a way of life for many working Americans. In 2019, 52% of employers offered at least one high deductible health plan. Today, roughly one in four covered workers has an individual medical plan deductible of at least $2,000, the seventh annual Guardian Workplace Benefits Study revealed. The high, and often unexpected, out-of-pocket medical costs are taking a toll on working Americans, particularly those in middle-to-low income households earning less than $40,000 annually. The Workplace Benefits Study revealed that three in five working Americans would have to borrow money to pay for a $3,000 medical bill, and two in five workers revealed they delayed a medical treatment, avoided an X-ray or blood test, or skipped a doctor’s visit because of the potentially high out-ofpocket medical expenses. As more employers opt into an HDHP, benefits such as accident and disability insurance can yield positive 38

InsuranceNewsNet Magazine » July 2020

outcomes for an employer, such as risk management and improving financial wellness among employees. In fact, we are seeing that these benefits are resulting in employers reducing their workers’ compensation claims. This is notable. Despite a downward trend in overall workers’ comp claim frequency, claimant fraud has been on the rise the past few years among certain workforce segments. Specifically, the Workers Compensation Research Institute found that workers in HDHPs have a greater likelihood of reporting off-the-job injuries as workers’ compensation claims.

Our research showed that nearly one in five employers with an HDHP report an increase in illegitimate workers’ comp claims since 2017 — almost three times as many as those without an HDHP. And the industry sectors that were more likely to report an increase in questionable claims included hospitality (31%), government (22%), health care and social services (17%), and construction (15%).

An Actionable Strategy For Brokers

Brokers and benefits consultants have an opportunity to coordinate their services between the group benefits and

The right insurance impacts the way workers file claims


Average decline in workers’ comp claims among large employers after offering a voluntary accident or short-term disability plan SOURCE: Guardian Life’s seventh annual Workplace Benefits Study

THE RIGHT BENEFITS LEAD TO LOWER WORKERS’ COMP CLAIMS HEALTH/BENEFITS risk management sides for their clients by proposing voluntary accident and disability insurance as a solution. We have seen this voluntary benefits strategy work, particularly among industries with higher-than-normal workers’ comp frequency and costs. To provide context, our research showed that 46% of employers reported a decline in workers’ compensation claims after offering accident or short-term disability insurance — 42% reported declines of 50% or more, while another 22% cited declines between 25% to 49%. More specifically, one in four employers experienced a decline in workers’ compensation claims after offering voluntary accident insurance, and one in eight experienced a decline after offering shortterm disability insurance. This alone makes it worthwhile for brokers and benefits consultants to consider proposing an actionable strategy for clients who need help reducing questionable workers’ comp claims. By facilitating a risk transfer, it will help a client address a challenge and drive down costs. But for brokers and benefits consultants, it also will help your firm drive supplemental health growth, increase client lifetime value, and reduce the impact of lost workers’ comp revenue in states where workers’ comp premium rates have decreased. So what should you be thinking about? How can you help your client reduce their workers’ comp claims? » Income protection with shortterm disability insurance. Guardian’s research found that Americans with disability insurance are most likely to acquire it via their employer (93%) versus on their own (7%). This poses an opportunity for brokers to educate employers about the value of short-term disability insurance, which replaces a portion of an employee’s income if they are too sick or too hurt to work due to a covered illness or injury. We also recommend having a conversation with employers about a holistic, integrated plan that includes not only disability but absence management as well. This integration ensures that the company has a plan in place for how they manage an employee’s leave, coupled with a return-to-work plan.

Employers reporting reduced WC claims after offering an accident and/or short-term disability plan 23% <50



50 – 499

500 – 999



SOURCE: Guardian Life’s seventh annual Workplace Benefits Study

» Offer accident insurance to help cover medical expenses. Whether it is voluntary or fully employer funded, accident insurance can help an employer’s workforce fill the medical gaps created by HDHPs. It is also the most affordable of all the supplemental health benefits and easy to understand. If an employee has an accident, they receive a lump sum cash benefit to help offset the medical costs associated with the treatment of the accident. Most important, it helps employees deal with unexpected circumstances that require medical attention and not have to worry about how they will pay for the additional expenses. » Educate employees. Employees need to understand what their employer is offering them and how it helps increase their financial wellness. Simply put, how does the benefit help them financially? In the case of accident insurance, key points to cover when educating a workforce about accident insurance include off-job accident product benefits; ease of filing an off-job accident claim; benefit payout time frame and cash benefit is paid directly to the employee, not to the provider, among others. In the case of short-term disability, most employees don’t understand it serves as income protection for either an injury or illness. And let’s face it, the name alone causes confusion among employees. As a result, a defined communications and engagement strategy is critical. Along with effective communication and training for employees and their

managers, accident and short-term disability benefits offer several advantages as part of an overall risk management strategy. They can quickly address questionable workers’ comp claims, improve workforce health productivity and help reduce employee financial stress and anxiety. These are all critical in helping a company meet the needs of its workforce while contributing to cost containment. Today’s employers are facing numerous challenges. Whether it’s reducing workers’ comp claims, controlling costs or recruiting talent, effective benefits strategies are paramount to their success. We found that employers who made voluntary benefits an important part of their overall risk management strategy reported better results. They reduced workers’ compensation claims (29%) compared with those without a welldefined voluntary benefits strategy (14%). Most important, employers paying all or part of the cost for an accident or shortterm disability are likely to see even greater results, since a larger proportion of the workforce will own the coverage. The time is now for brokers and benefits consultants to consider a risk transfer strategy that is a win-win for both the employer and the employee. Michael Naumann is western U.S. practice leader, Guardian Life. Michael may be contacted at michael.

July 2020 » InsuranceNewsNet Magazine


Financial facts and figures powered by

New And Old Investors Shovel $$$ Into Stocks

Although some advisors might have worried that the plummet in the equities market earlier this year would chase away investors, the opposite has happened. Not only are current investors throwing

Stocking Up!

Percentage increase in stock purchasing by income groups after receiving stimulus checks, according to Envestnet Yodlee.




money into the markets, but also young people who have never invested are adding to the pile.

Online brokers saw an influx of new investors. The big brokers, Charles Schwab, TD Ameritrade, E-Trade and Robinhood, saw new accounts grow as much as 170% in the first quarter, according to CNBC. “New investors who sense a generational-buying moment but do not have much background in the equity space,” Citi chief U.S. equity strategist Tobias Levkovich said in a note to clients. “We have heard anecdotally about younger individuals with less market experience viewing the March plunge as a unique time to start portfolios

and often crowding into the tech arena, purchasing the stocks whose services or products they know and use.” $100,000-$150,000 Individual brokers also saw a flood of new clients, according to data from Fidelity Institutional, which is a custodian for brokers-dealers and registered investment advisors. B/Ds and RIAs opened >$150,000 more than 100,000 accounts in the first quarter, a 25% increase over the first quarter of 2019, according to On Wall Street, which added that other institutional custodians were reporting similar increases.


Online Brokers See Spike In New Accounts During Coronavirus New Accounts Q1 2020

New Accounts Q1 2019

Year-OverYear Increase

Charles Schwab




TD Ameritrade









When Coke Says The Fizz Is Gone …

Coca-Cola CEO James Quincey told CNBC that the COVID-19 impact on the economy is just starting, just when everybody was ready for a refreshing break from the relentless bad news. “The economic impact of the lockdown is just starting to begin,” Quincey said in an interview, adding that 40

InsuranceNewsNet Magazine » July 2020

U.S. Starts Selling 20-Year Bonds

The U.S. Treasury in May auctioned its first batch of 20-year bonds since 1986 and found plenty of buyers, with $50 billion sold, even at the rate of 1.22%. The current maximum is 30 years. The rate was about 50 basis points over the venerable 10-year bond, creating another option for a safe, long-term security. “The 20-year bond fits more easily into the existing market structure,” said Lou

Crandall, chief economist at Wrightson ICAP. “This is a way of taking advantage of long-term interest rates that are low by historical standards without introducing a wild-card such as an ultra-long bond, which would have had more growing pains.”

Goldman Cancels Gloomy Prediction

Goldman Sachs had predicted the S&P 500 would dip to 2,400 by the end of June, but that was back in early March when the index was sliding like ice melting off the roof. But when the index bounced back up over 3,000 by late May, Goldman issued a “never mind.” “The powerful rebound means NEVERMIN D our previous three-month target of 2,400 is unlikely to be realized,” Goldman analyst David Kostin said in a report. “Monetary- and fiscal-policy support limit likely downside to roughly 10%.” Its downside projection is now 2,750 and upside is 3,200.

he is expecting a really extended U-shaped recovery rather than the V everybody is hoping for. Expect downward pressure on prices, he said. “We’re gonna have to recognize that coming after this virus crisis will be the economic impact and hangover of the lockdown, and there will be a much greater focus from the consumer on affordability or getting the prices lower,” Quincey said.

Hasn’t the price of a liter of Coke been the same price for, like, a decade?

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Advisor Authority


Invincible Or Overwhelmed?


Reaching The Emerging MillennialAdvisor Market ADVISOR AUTHORIT Authority

Another key difference betwe WhileMILLENNIAL nearly two-thirds of Mill Advisor ADVISOR AUTHORITY half of Gen Xers say they have2 Authority Millennials and Generation X: Targeting th advisors has been steadily inc

Even before the COVID-19 pandemic, millennials were feeling stressed by debt and finding the right advice. • Craig Hawley


illennial investors are vital for your future success. They are a significant force in our economy — driving change and leading new trends. They’re the most educated generation of Americans thus far — poised to grow more wealth and inherit upward of $30 trillion in what many call the Great Wealth Transfer. But as a new normal is pounding markets and putting pressure on the economy, what do you need to know to earn millennials’ trust and win their business? The opportunity to reach these emerging investors is huge. Start by understanding their top concerns and closing their knowledge gap. Maintain meaningful relationships by focusing on what matters most to these younger investors and communicating on their terms.

Millennials and Generation X: Targeti 61% and the volatility index spikes to new


highs, advisors must help millennials stay the course and avoid the urge to move to Another key and Gen Xers X: Targeting the Emerging Market of Newdifference cash. The between cost of healthMillennials care has60% also been GENERATION While nearly offor Millennials say have a finan Investors,” also showed that MILLENNIAL they havetwo-thirds top of mind millennials year they over year been thinking about their — and and isthey likelyhave to become more urgent amid Additiona halffuture of Gen Xers say anXadvisor (48%). wrestling with big issues. a global pandemic. advisors has been steadily increasing—rising to 61% in 201 MILLENNIAL 59% 61% Despite their young age and positive 48% mindset, millennials say that saving Close The Fiduciary enough for retirement has been among Knowledge Gap 60% 54% DOyears YOU HAVE their top three financial concerns year Millennials consider of experience 61% AN AD 52% Yes over year. It remains to be seen whether the No. 1 factor when choosing an adviMILLENNIAL GENERATION X BA 59% this changes long term, but assuming sor, according to the Advisor Authority 48%




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Invincible — Or Overwhelmed?

InsuranceNewsNet Magazine » July 2020




In 2019, before the COVID-19 pandemic, millennials had a more optimistic financial outlook than other generations of investors had. Nationwide’s fifth annual Advisor Authority study of about 1,700 financial advisors and individual investors nationwide revealed that nearly twothirds of millennials (64%) had an optimistic financial outlook compared with roughly half of Gen Xers (49%) and baby boomers (57%). Yet, millennials said they were overwhelmed by outsized student loan debt and had strong concerns about volatility, a bear market and a potential recession. Our most recent Advisor Authority special report, “Millennials and Generation


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20182016 46% 2019 *Caution: small sample size (<100) 2017 study. The second most popular 2018factor is 52% offering personalized2016 advice for a holistic 2017 52%

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Base: Qualified Investors: Millennial (n=165); Generation X (n=213); Baby Boomer Q800. Do you have a financial advisor? we return to a more stable environment, Q800. Do you have a financial advisor? 39% there remains a significant 41% opportunity to help them develop smart habits now to financial picture. save more for the future with the power In fact, generations of investors “Make sure you all listen. It doesn’t matter if you’re a Millen 2016 40% 46% of tax deferral. Protecting assets has also agree on thoseto two points. So whatwho makes everybody wants find somebody gets them, wh 48% No their top three been among concerns. As millennials different ofAnd that's an 58% issues, and can help them from solve investors problems. stocks plunge into bear market 41% territory other generations? Whereas Gen Xers,

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Jen Dawson, CFP® Managing Director, Hemington Wealth Management

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ADVISOR AUTHORITY 2019: The Future o

Millennials and Generation X: Targeting the Emerging Market of New Inves

But the factors influencing their decision to work with a financial

boomers and mature investors consis- solutions and products you recommend agriculture, and clean water and water priorities. While morescarcity. Millennials Gen Xers as cite so tently say that a fiduciary standard is values and theand fee structures you use. Take thisthan into consideration among their top three considerations in and increased use of mobile technology you build portfolios more directlycite a (19% to vsalign 4%), fewer choosing an advisors, millennials don’t. The Importance Of Social with millennials’ values. targeting Millennial investors, this You may reflect an important knowl Maybe millennials don’t know what they Responsibility also have an opportunity to help More than one-third of Millennials (39%) and more than of Gen Xers (52%) still don’t hav educate them on benefits ofyounger working with an advisor who don’t know. Millennials’ reasons forthe choosing an advi-half clients develop a strategy for put Many younger investors simply expect sor reflect strong differences in their valcharitable giving that fits their annual The opportunity to tap into the market of emerging investors is huge. So, what do you need t an advisor to do what’s right for their cli- ues and priorities. For example, 20% of budget and financial plan. Work with ent. As a survey from Edelman Financial millennialsMILLENNIAL cite socially responsible invest- them toGENERATION identify a cause they’re truly pasBA Engines more than of con- year ing among top both three factors influenc- and sionate about. Help them choose wiselymatte Whenrevealed, choosing an half advisor, over the year Millennials Gen Xers say experience sumers mistakenly believe that all finan- ing their decision to work with an advi- to investXin an organization that is fiscally 31% and 47%) and both of these generations also include personalized advice for47% a holisticand financ cial advisors are legally required to put the sor — more than double the percentage healthy, accountable, transparent 35% 49% Advisor experience results-oriented. There are many and 25%) among their top two or three. MILLENNIAL GENERATION X useful BA 37% 41% resources to help with 31% 43%this, including GuideStar, BBB Wise Giving 31% 47% Alliance, 49% Charityadvisor Navigator and GiveWell. 28% with35% 25% But the factors influencing theirAdvisor decision a financial also reflect strong d experienceto work

Q930 Version #3: Top 8 answers with


Q930 Version #3: Top 8 answers with






31% 43% values and priorities.Holistic While more Millennials than socially responsible investing financial picture 26% Gen Xers cite 26% Think And Communicate 20% 37% and increased use of mobile technology (19% vs 4%), fewer cite a fiduciary standard (18% vs 2 Differently 28% 25% 23% 16% Build and maintain relationships with milpicture 18%an important targeting Millennial investors, Holistic this financial may reflect knowledge gap—and an importan 26% 26% 27% lennials through consistent communica20% 37% Fee-based fiduciary 16% an advisor 29% educate them on the benefits of working with who theirtheir clients’ bestThese interest tionputs that reflects preferences.

Q930 Version #3: Top 8 answers with truncated an

Experience Wins The Day TOP 8 FACTORS FOR CHOOSING AN ADVISOR In Reaching Millennials Q930 Version #3: TopGENERATION 8 answers with truncated answ MILLENNIAL BABY BOOMER standard


Fee-based fiduciary 17% standard


18% 16% 18% 17%


digital natives favor27% mobile technology, 22% 29% with 19% saying it influences their decision to work12% with20% an advisor, compared 22% with just 4%12% of Gen Xers and 5% of boomers, according17% to12% Advisor57% Authority. 12% Pick up the phone before you decide 16% 17% 49% whether to BOOMER schedule a meeting. Our BABY 52% 16% 8% that millennials study showed are be50% 8% phone 57% calls (34%) over ginning to 9% prefer 9%49% 22% face-to-face 13% communication (33%). And 13%52% 26% they are tired16% of email. Only 8% preferred 16% 50% 28% this form of communication with their 11% 20% 11% advisor in 22% 2019, down from 21% in 2016. 13%13% 26% Your communication should always 20192019 2019 2019 19%19% 28% 18% center on 20% education. Millennials are like9% 9% 22% ly 2018 to do their own research online. 2018 And 2018 2018 34% 4% 18% there is plenty of information out there 4% 29% 11% and from2017 —2017 but is it22% accurate a reliable 11% 2017 2017 11% 34% source? Establish 11% 15% 7% your own online pres29% 2016 2016 7%25% ence — using LinkedIn, blogs, podcasts 2016 2016 15% and videos to truly communicate on 11%— 9% 16%earn their trust and 25% 9% millennials’ terms, 16% 15% 11% 16% win their16% business. 11%

19% Millennial clientsHighlighting look to an advisor’s historical X 18% 18% 31% 47% TOP 8 FACTORS FOR CHOOSING AN ADVISOR performance experience as the top reason choosing 19% Highlighting for historical 15% 35% 49% 18% Advisor experience whom to trust with finances. MILLENNIAL GENERATION X 37% theirperformance 41% 15% 20%43%


Advisor experience

Holistic financial picture

26% 47% 31% 20% Socially 35%responsible 26% 32%49% 28% 25% Socially responsible 37% 23% 41% 32% 23% investing 16% investing 31% 43% 23%

26% 20%

Holistic financial picture 18%

Fee-based fiduciary standard

16% 18% 17% Fee-based fiduciary


18% 27% 19% 19% 22% 16% 29% 18% Increased use of Increased use of 18% 18% 20% 17% mobile tech 12%17% 17% mobile tech 22%8%


18% 19% 18% Highlighting historical15%

Highlighting historical performance



13% 25% 37% 28% 13% Working client’s with client’s14% 23% with Working 16% 14% 16% 26% 26% 16% family/children 27% family/children 20% 13% 13% 29% 37%

8% 12%

18% 12% 16% 17% 19% 12% Reducing fees for 25% 16% 16% 18%Reducing feesyounger 17% 26% for clients 25% 15% 16% 32%


8 1 7% 1

7% 7% 7% 6% 6

5% 5 4% 4 5% 5 3%


3% 10 3% 3 1%3 11 5%

26% younger clients 1% 20% 8% 8% 15% “**” = <.5%, “-” = 0% 32% 11% 26% 9% 20% Source: Nationwide Advisor Authority study 8% 8%10% 4%5 Craig Hawley is head of *Caution: small sample size (<100 Socially responsible 9% Qualified Investors:10% Millennial (n=165); Generation X (n=213); Baby Boomer (n= 32% 26% 13% 9% 7% “**” = <.5%,Base: “-” = 0% Nationwide’s Annuity Socially responsible Q930. Which of the following would make you more likely/influenced you to work8% w investing 32% 13% *Caution: small 7%10% sample size (<100 23% 16% up to three. best interests of their clients first. Only of Gen Xers and boomers, and five times Distribution. He may be investing



10%(n=165); Generation X (n=213); Baby Boomer9% Base: Qualified Investors: Millennial (

21% understand the difference between a more than matures. contacted at make craig.hawley Q930. Which of the following would you more likely/influenced you to work 13% 11%11% 7% up to three. 13% who 7% 5% “fiduciary” and a “financial advisor” This generation proactively seeks 13%13% Working with Working client’s with client’s14% 7% 14% 7% 9% 2019 2019 may be a fiduciary or may operate under a vestments that advance sustainable de2019 2019 2019 2019 16% 19%19% 7% family/children 16% 7% 6% family/children different standard of conduct. velopment and9% create 13% 9% a positive impact. 13% 6% 10 6% 2018to a recent report from 2018 2018 Show millennials what you can bring to 2018 According Cerulli, Like this article or any other? 2018 2018 19% 5% 0 Take advantage of our award-winning the table and demonstrate four of the top five sustainable invest19%the meaning 4% 4% 5% use of 18% 11% 4% 2% 2017 are 11% 2017 2017 journalism, licensure and reprint options. Increased useIncreased of of serving their best interests. attract ing themes related to environmental 18% To 4% 2017 2017 2017 17% 11% 5% 0 mobile tech Find out more at 17% 11% mobile tech and retain younger clients, 8% start with issues: climate change, 5% 7% fossil fuel divest3% 1% 2016 2016 8% 7% natural resources 3% transparency and greater choice in the ment, 2016 sustainable and ASM-1123AO 2016 2016 2016 Reducing fees for 16% Reducing feesyounger for clients 25%

younger clients


16% 25% 26% 32%

“**” = <.5%, “-” = 0%


9% 16% 15% 16% 11% 15%

3% 3% 3% 1%3% July 20205% » InsuranceNewsNet Magazine




6% 6% 2%

INBALANCEWIRES Each day, more than 159 million ! Americans drink tea

A Cup Of Tea Makes Everything Better

The U.S. co more than nsumed of in 2018! tea

QUOTABLE Tea is the No

. beverage in the 2 For centuries, tea has been more than just world, be hin d water! a beverage. People around the world drink it to relax, reinvigorate, heal and soothe. Now SOURCE: Mr.Tea Tea USA and Statista researchers are examining just what it is about tea that makes everything seem better. Scientists are investigating whether tea’s relaxing and healing effects are a direct biological outcome of the compounds in tea or whether they come from the context in which the drink is consumed — preparing your brew, choosing your favorite cup and sitting down for a short break from your activities. Drinking green tea has been found to improve brain function in healthy people, said Stefan Borgwardt, chair and director of the department of psychiatry and psychotherapy at the University of Lübeck, Germany. Tea also is linked to a longer life and lower blood pressure, and it may have a fat-busting effect, said researchers from the University of Reading in the United Kingdom.


Can’t turn off your brain to fall asleep at night? You could be deficient in magnesium. How does magnesium help you get some shut-eye? The mineral contributes to converting proteins into the chemicals that make you feel sleepy, said Dr. W. Christopher Winter, author of The Sleep Solution. Magnesium also calms the nervous system and plays a role in muscle relaxation and nerve function. Magnesium can also help increase the body’s dopamine levels, which can improve your mood, Winter said. And if migraines are robbing you of your sleep, magnesium can help alleviate those too. Women ages 19 and older need 310mg-320mg a day of magnesium. Men ages 19 and older need 400mg-420mg a day of magnesium. SOURCE: The National Institutes of Health





— Dr. Jyotir Jani, primary care physician with Piedmont Healthcare

blood pressure, relieve stress and depression, and strengthen the bond between you and your dog. On the downside, your bed can become overheated, the bedding will get dirtier faster, and the dog may interfere with your sleep.



Fifty percent of dog owners said their pet sleeps in a family member’s bed, according to a survey sponsored by SpotOn Virtual Smart Fence. But is cosleeping with your dog a healthy habit? Dr. Leslie Brooks, veterinary advisor for Betterpet, believes the answer depends on the dog owner’s preferences and lifestyle. Before letting Fido in your bed, consider your — as well as your dog’s — sleep habits, hygiene, medical conditions, temperament and personality. Does the dog snore? Does it have accidents at night? Are you a light sleeper? Do you have allergies? Sharing your bed with your dog can have a positive effect on your mental health, said Dr. Amanda Nascimento, lead veterinarian at NHV Natural Pet. Sleeping with your dog can reduce

Because the body cannot store excess protein, it becomes fat. Source: Mayo Clinic

InsuranceNewsNet Magazine » July 2020

Smoking cessation is the single most important action that an individual can take regardless of age.

You grab a piece of fruit or a chunk of cheese, and there it is — mold. Should you throw out your snack or cut off the mold and eat the rest? Eating moldy food probably won’t do you too much harm, let alone kill you, said Dr. Rudolph Bedford, a gastroenterologist at Providence Saint John’s Health Center in Santa Monica, Calif. But there are a few things you should keep in mind when it comes to eating moldy food. As long as your immune system is healthy, you can digest mold the same as any other food. And some foods — such as dry-cured country hams and cheeses such as brie — are meant to have mold. What about mold that pops up on produce, bread or cheese? The mold might taste nasty, but it probably won’t hurt you, Bedford said. You can cut off the mold and continue eating the rest of the food, but you won’t be able to cut off the “roots” that allow toxins to spread throughout the inside of the food. The bottom line — your best bet is to throw out the entire piece of moldy food.

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Save Your Skin In 3 Easy Steps Summer is a time for outdoor fun, but your skin can pay the price. By Peter T. Dziedzic Jr.


hen you think of summer, your mind conjures images of days at the beach, barbecues in the backyard, a doubleheader at the ballpark or a leisurely round of golf with friends. Perhaps more so than ever before, this summer we will all want to be outside as much as possible. However, all the sand, surf, sun and, let’s be honest, cocktails, can do a number on our skin. While we like to talk about the “lazy days of summer,” this season is no time to slack on your skin care routine. Here are three easy steps to keep that glowing complexion all summer long.

Step 1: Exfoliation

Exfoliation is the Swiss Army knife of skin care. Almost any skin care concern that you have can be solved, at least in part, with exfoliation. Exfoliation is the removal of dead skin cells from the surface of the skin via either a manual or chemical process. This 46

InsuranceNewsNet Magazine » July 2020

will help take away any dullness you may be experiencing, prevent clogging of your pores to avoid blackheads and breakouts, and allow your other skin-care products (especially your hydrating and moisturizing products) to be more effective. Exfoliators come in two varieties:

exfoliators that use salt, sugar, apricot pits or other such particles as they can damage the skin. Exfoliation can be an example of too much of a good thing becoming a bad thing. Start with exfoliating your skin once per week. If that feels all right to you,

Because your skin is the last of your organs to get water, you will need to use skin care products to ensure your skin is properly hydrated. chemical and physical. Physical exfoliators remove those dead skin cells with small particles while chemical exfoliators use enzymes or acids (like glycolic acid) to dissolve and loosen the skin cells. If your skin is sensitive or you have any type of redness — whether it’s from sunburn or a more chronic condition like rosacea or eczema — you should avoid physical exfoliators as they can be too abrasive for the skin. Also, avoid

and your skin responds to it well, try exfoliating twice a week.

Step 2: Hydration

Things that can contribute to dehydrating your skin in the summer include heat and humidity, exposure to air conditioning, and drinking beer and wine. Dehydrated skin is a condition where your skin is lacking water. It should not be confused with dry skin, which is a skin type

SAVE YOUR SKIN IN 3 EASY STEPS INBALANCE As an example, if you would burn naturally after 20 minutes of sun exposure, a sunscreen with an SPF of 30 would provide 10 hours of protection if used correctly. Given that sweat and water can wash off sun• Shower and shampoo immediately after getting out of the screen, it is imperative to pool, using a mild cleanser or body wash made for swimmers. reapply sunscreen throughChlorine from swimming pools can dry and irritate your skin. out the day, especially after a swim or strenuous activ• Recognize poison ivy, poison oak and poison sumac so you can ity. Generally, you should wear a sunscreen with an avoid them and the resulting itchy rash. SPF of 30 or higher. But beware — sunscreen • Reduce your risk of heat rash by wearing lightweight loosealone will not protect your fitting clothing, exercising outdoors during the coolest part of the skin from sun damage. day or moving your exercise routine indoors in air conditioning, and Try to avoid excessive dikeeping your skin cool by using fans or air conditioning. rect sun exposure during peak hours of 10 a.m. to • Check your medication to make sure it won’t cause an adverse 4 p.m. daily. And when you are outside, wear a hat reaction when you go out in the sun. and clothing that covers as much as possible. How SOURCE: American Academy of Dermatology will you know if your clothing protects your skin? characterized by a lack of oil in the skin. People sometimes get confused about When you hold it up and no light comes In fact, for some people, skin dehydra- sunscreen, so let’s take a moment to break through, then you know your clothing is tion may actually lead to oilier skin and down what you need to know. woven tightly enough to give your skin breakouts. Your skin will compensate for Let’s start with ultraviolet rays. There additional sun protection. the lack of water by hyper-producing oil, are two types of rays that break through Sometimes, in spite of your best efmaking your skin oily and causing clog- our atmosphere — UVA and UVB rays. forts, you get sunburned. Here are some ging and pimples. UVA rays go deeper into your skin, dam- tips on how to treat sunburn. Cool baths To treat dehydration, look for products aging the collagen and elastin tissues. followed by the application of a quality that add water (instead of oil) to the skin. These rays are responsible for wrinkles, moisturizer will help with skin dryness. In terms of ingredients, products that dark spots and an increased risk of skin Take aspirin or ibuprofen to help reduce contain hyaluronic acid, cucumber and cancer. These are the tanning rays. And swelling and discomfort. If blisters apalgae will replenish the moisture your while we, as a society, yearn for a good pear, do not pop them; instead, let them skin is missing. And yes, drinking water suntan, a tan is actually a sign of DNA heal on their own. can help — but because your skin is the damage. The skin is literally darkening to Peter T. Dziedzic Jr. last of your organs to get water, you will protect itself against further damage. need to use skin care products to ensure UVB rays affect only the superficial lay- is the chief operating officer and genyour skin is properly hydrated. ers of the skin, but UVB rays are respon- eral counsel of Life sible for causing sunburn. These rays are Insurance Strategies Step 3: Sunscreen also contributors to the most common Group, a consulting While we listed this step as the last one, it forms of skin cancer that are prevalent firm that focuses on the high net worth is arguably the most important one. in those superficial layers and result from life insurance market. He also is the owner Wearing sunscreen every day is not sun accumulation. of skoah Boston, a facial-only spa and skin solely about vanity (although excessive This is why you must wear sunscreen care retailer. Peter may be contacted at sun exposure does cause wrinkles, sun- (often referred to as “broad spectrum” spots and sagging skin) but also about protection) that protects against both preventing skin cancer from UV expo- UVA and UVB rays. sure. And by every day, I mean every So then, what is “SPF”? SPF stands for Like this article or any other? single day. Year-round. Even on cloudy sun protection factor and indicates the Take advantage of our award-winning days, the sun’s UV rays are able to pierce amount of time the product gives you exjournalism, licensure and reprint options. through those clouds (and even glass) and tra protection from UVB rays as opposed Find out more at damage your skin. to not wearing any sun protection.

Head Off These Summertime Skin Woes

July 2020 » InsuranceNewsNet Magazine



Hiring To Bridge The Generation Gap The right strategy to bring young advisors into your firm and help them become successful. By John Pojeta


apacity is an inevitable roadblock for any successful advisor. As you grow your book of business and pursue higher-value prospects, your ability to prospect, manage sales, run the back end of the business and serve your current clients will become increasingly impractical. You need help. That will likely mean hiring support staff initially, but eventually you will bring in other advisors. In today’s market, hiring advisors to work with you is an opportunity not only to increase capacity but also to inject new perspectives and new knowledge into the firm. If, for example, your strong suit is sales, you could hire an advisor who is a master of all things service-related. Most advisors think about hiring this way, but the new advantages to making the right hires go beyond finding complimentary skills. The most competitive firms are using hiring to strategically bridge the generation gap, bringing young advisors into the firm to fill gaps in technology and access — using millennial advisors to engage the millennial audience. The gap I’m referring to looks like this: Many advisors are 55 or older. The next most represented generation is in their 20s, and there is a sizeable group of these young advisors looking to have an impact in the industry. You have some advisors who are between the ages of 35 and 55, but they are not numerous; hence the gap. Before you try this in your own firm, you should plan ahead and have the right strategy, hiring and training processes in place so you not only can find the right talent — whether a millennial or someone making a career change — but also position them to make a competitive difference in the firm.

The Old Hiring Process

When I first started as an advisor, hiring 48

InsuranceNewsNet Magazine » July 2020

was very different from what it is today, and many readers will have had a similar experience. As a young advisor, I saw a high volume of turnover in advisors my age. Companies brought us in en masse; they taught us all the same script — the pre-canned answers to questions like “Why are you in this business?” — and pointed us to a phone. Although they gave us some training through some courses and certifications,

be sensitive to this. How we came up is not how the next generation wants to come up. If we apply old methodologies to this new group, we will never find the right talent and the right fit because they will move on to another firm or another career. Millennials think of sales differently from how we do. They like the idea of helping people, but they often have a perception of sales being manipulative

HIRING AGENTS THEN VS. NOW Companies hire en masse.

Companies recruit based on soft skills and potential.

Recruits trained in basically the same way.

Companies look at candidates’ abilities and culture fit.

Emphasis on cold calling. New employees learn through trial and error. most of what we learned boiled down to “dial.” You learned through a great deal of trial and error, and if you stuck around, it was because of some combination of luck, hard work, and the need or desire to actually have income. Looking back on it, the “throw it at the wall and see what sticks” philosophy is a bit goofy, and it’s a dynamic that simply does not resonate with the millennial audience. We veteran advisors need to

Mentoring is part of the training progress. Recruits expected to drive meaningful change in the firm. or dishonest. We also know that millennials expect a more flexible work environment, expect to have their work interwoven with the latest in technology and want more than income. They want their work today to lead to a brighter, more meaningful future for them and for those they helped. The modern hiring process in growing firms looks like this:

HIRING TO BRIDGE THE GENERATION GAP BUSINESS » An ideal candidate profile that accounts for hard skills, soft skills and future potential. » A reliable and readily accessible source for new advisor candidates. » A robust hiring process that addresses both ability and cultural fit. » A hands-on mentoring and training process. » The built-in expectation and desire for the young advisor to drive meaningful change in the firm (over time). » Prospecting behaviors and plans pre-crafted to get new hires in front of opportunities as quickly as possible. The nuances here are critical. Although this template can give you a road map for overhauling how and who you hire, it is far from being an automated or plugand-play solution. If you want your hiring efforts to bear fruit, you need to be as thoughtful and as engaged with building and refining the process as you have been with the rest of your business.

Advisors Are Not Recruiters

We met a highly successful firm with a family legacy. Founded by the father and handed off to the son, the firm grew from generation to generation, and they saw that they needed another advisor on the team to continue to grow. Four hires later, they had not found the right person. They tried referrals. They tried headhunting wholesalers. They even went as far as to hire the new advisor an assistant to provide administrative support. Four hires plus an assistant is an expensive series of experiments to run, but these advisors did what most of their successful peers also do when they hire. Unfortunately, it devolves into throwing things at the wall and hoping this is the one that sticks. When you hire, start with the right mindset. Industry knowledge is a plus, but it is also teachable. The more important quality to find is an advisor who is willing to hunt and who has a desire to find a long-term home. The temptation to take a shortcut and hire from a big provider is unlikely to get you the kind of advisor who

was like you when you first started — hungry to learn and hungry to get in front of prospects. The trade-off of finding a hunter is that they may not have the pre-established industry knowledge of a less sales-oriented hire. The good news is that you can teach the advisor side. Here is what we recommend: » Engage a sales coach to provide structured training and feedback for the new advisor. Every prospect counts, and the ongoing insight from a sales coach will make every interaction more valuable for the business because your new hire will improve at a faster rate.

as an established firm gives you the opportunity to hand a new advisor a pre-built pipeline. You have the best practices. You have the resources. Don’t force the new advisor to start from scratch. In addition to your hiring and training process, consider handing off a pipeline that includes: » A share of the new leads coming in from firm marketing initiatives (perhaps distributed based on value or type so that the most experienced partners can take the highest-value prospects in the beginning). » An appointment-setting program specifically for the new advisor, perhaps targeting a new region or prospect type.

» Set aside your own time to provide mentorship. A new hire will never automatically work in the exact ways that are best for the business. If you want a new advisor to last and to have an impact, you should plan to give them 25%– 35% of your time in the form of training and teaching. Courses and certifications help, but the best way for an advisor to become as skilled as you are is for you to show them the way.

» A drip marketing system built out with content and tactics that have already brought the firm success.

» Consider dual hiring. If you have the budget, hiring an experienced advisor and a young advisor at the same time can help you to accelerate knowledge transfer to the younger advisor. Both parties will still need mentorship and training to fully integrate into the business, but having an additional expert in the room helps everyone. Yes, this is a time-consuming process, and that’s why it is so important to start with the right candidate. You tell your clients each day to look at their finances as a long-term endeavor, making small, incremental investments over time to get big returns later. A new hire is no different. But you also do not want to spend 24 months investing in the wrong candidate, so be mindful of the entire process, from hiring to training.

On The Horizon

The Sales Pipeline

For your new hire to have an impact on the business, they need to get in front of prospects as soon as possible. Hiring an advisor with the hunter mentality will make this less of an issue, but your momentum

When the tools are already in place, you will find that a new advisor will close new business at a much more rapid rate than if you had asked them to begin with nothing. This is true for all new hires, regardless of how much experience they had when you hired them. Once your new hire is up to speed, the real opportunity of hiring to bridge the generation gap will begin to blossom. With a bit of experience mixed with their generational perspective, you can identify new opportunities for the firm as a whole. Your new advisor might have access to different audiences, could be better equipped to talk to prospects from their peer group, and will have insights into new things the firm can do to grow. Those rewards are within sight, and we have seen prosperous firms capture them already. However, they lie across a chasm, and it will take the right candidate with the right training to get to them. John Pojeta is the vice president of business development at The PT Services Group. He previously owned and operated an Ameriprise Financial Services franchise for 16 years. John may be contacted at

July 2020 » InsuranceNewsNet Magazine



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

Creating And Sustaining A Complementary Team A well-balanced team creates an effective business, and continued success depends on the growth of each individual employee. By Chris Leach


any business owners have a habit of hiring employees who are similar to themselves. This is understandable, as they want to work with people they empathize with. Or sometimes they may see a younger version of themselves in the applicant. However, this tendency can be a mistake from a business perspective. When you’re running a business, you have an increased obligation compared with previous positions in which you only had to look out for yourself and your individual sales. Now, the livelihood of your employees and clients is in your hands. To achieve a well-rounded operation, don’t seek only those employees who are similar to you. Instead, hire individuals who have refined skills that you lack, and then have patience to allow your team to grow. By creating a complementary team, you equip yourself to provide unmatched service, enabling you to adapt to business challenges while securing the future of those who are committed to you and your business.

The Ideal Team Grows Together

Although a well-balanced team creates an effective business, continued success depends on the growth of each individual employee. A technical employee might not see the appeal of interacting with clients, yet they will find great satisfaction in their behind-the-scenes work. Every staff member should have the opportunity to grow in the work they enjoy doing — whether through a new opportunity within the organization or within their current role. Feeling that they’ve achieved something 50

InsuranceNewsNet Magazine » July 2020

and are recognized for development in what they do best furthers their motivation to achieve great results. Those who can build a team from scratch must be willing to invest time to see this growth in others. Although we’re in a culture of instant gratification, where people want success overnight, they need to put in the effort and prepare for gradual growth. For example, running a business requires building numerous essential skills in your employees, such as consistent learning, reading body language and establishing strong relationships. Fortunately, our industry and MDRT in particular have an impressive reputation for the willingness to share ideas and spend time helping others achieve success.

Make Your Clients Part Of The Team

Clients can be some of your most valuable team members. If your clients believe they are a part of your team, they will remain loyal to you. Just as growth within your team is gradual, building client trust takes time. One strategy our team uses is to show clients the work we do behind the scenes instead of simply presenting solutions. For example, we may go to a client meeting bringing all the research in a big pile of papers with a summary sheet on top. We give the clients the option to talk through all the background research we did or to just go over the summary. Surprisingly, the client rarely wants to go through all the research! But it does make them aware of the time and thought we have put into our work. This builds their confidence in us and increases their comfort levels with us. Often as advisors, we make our jobs seem very easy because we’re good at what we do, but sometimes clients don’t know what goes on behind the scenes to get the end result. It’s really important to ensure that our work doesn’t appear effortless. Building a foundation of trust should be based on relationships with all your

staff — not just one advisor. That way, clients feel at home within your overall practice. The inevitable business move of transitioning clients to another team member can be done without tension and may even occur naturally. Perhaps you can position an administrator or paraplanner to regularly sit in on client meetings and make them available to provide answers to client questions that come up outside of meetings. This way, when your staff grows into a new role, your clients are already comfortable with the relationship and they remain loyal to your business.

Adapting To Challenges As A Team

My practice’s strong team dynamic has equipped us for the drastically changed business environment we now find ourselves in as most of us work in a virtual setting. While it’s in our nature to meet with staff or clients in person, we have quickly adjusted to video calls — thanks to our complementary skills. We maintain our collaborative spirit through daily team check-ins to discuss the challenges from the previous day and the priorities for the day ahead. Regular communication enables us to preserve our well-balanced roles within the team structure and deliver the service clients rely on. The current situation highlights the benefits and importance of having a multidisciplined team that has the willingness to do what needs to be done and make the client the focus of everything they do. You can’t predict the challenges your business will face, but you can set up a well-balanced team that is equipped to overcome any barriers to success together. Chris Leach, DipPFS, managing director and financial advisor of Chris Leach & Associates, has 12 MDRT Court of the Table and 16 Top of the Table qualifications. She may be contacted at


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.

Be A Diversity Ally Embody diversity, equality and inclusion as a financial professional. By Brian Haney


vividly remember the first time I became conscious of my “white privilege.” I was home from college for the summer spending time with my best friend, who was in the area training for the NFL. He was a speedy black cornerback from central Florida, and I was a slightly less quick white lacrosse player from an affluent neighborhood outside Washington. In college, we connected through a campus fellowship for athletes, and we became fast friends. After our senior year, I was fortunate to watch him get the call that he had been invited to the New York Jets training camp. So, after lunch downtown on a sunny afternoon, we decided to check out the Mercedes-Benz dealership because he was interested in upgrading his car. I’ll never forget that experience, walking into the dealership and being approached by one of the salesmen, who immediately tried to warm up to me as if I were the one interested in buying a car. I quickly protested that I wasn’t the one looking; my friend was. But the look of surprise mixed with disdain on the salesman’s face, and his awkward transition to helping my friend, hit me like a ton of bricks. My conscience screamed, “This isn’t the way it’s supposed to be!” I share that story because it was a pivotal moment in my early adult life that awoke something inside me. I’d glimpsed a different world through the eyes of a friend, and I realized I had a choice to make. Would I take responsibility for what I observed, or let this be something that bothered me but seemed too significant to do anything about? I chose to respond, and that sent me on a trajectory of pursuing social justice and equity. As a young professional, I was determined to have a diverse practice, working with minorities and traditionally underserved groups.

Moving The Diversity And Inclusion Needle

If you’re a kindred spirit looking to

become an ally in the fight for change, I’d like to suggest some concrete actions you can take to move the needle in your own life and the lives of those around you. » Examine your own biases. Before I could become an empathetic change agent, I needed to examine my own heart. What stereotypes and prejudices had I developed? Did I have stereotypes, which are exaggerated beliefs or distorted truths about a person or group? Did I have any prejudices, which are opinions, prejudgments, or attitudes about a person or group? Both can stymie our ability to grow. If you need some help here, Harvard University has developed an excellent resource to test yourself for hidden biases at We all have biases; some may be conscious, although many are unconscious. But none of them need to hold us back. » Seek out marginalized voices and perspectives. How many marginalized people do you follow on Twitter or Instagram? How many minority authors do you read? If you’re like me, it may not be many. To grow my capacity as an advocate and ally, I had to deepen my understanding of the plights of minorities. The best way to break free of your preconceptions is to seek out voices you aren’t hearing from. Once you start paying attention to people different from you — people of color, LGBT, Muslims, people with disabilities, etc. — you’ll develop an appreciation for those voices and find beautiful synergies with your own values. » Become intolerant of intolerance. Next, plant the flag that racism, discrimination and intolerance won’t be tolerated anymore. Make this declaration in your heart, and decide to engage in your spheres of influence when you have the opportunity to do so. Speak up and speak out. This may mean confronting others when you witness discriminatory behaviors, or even standing up against friends, relatives or coworkers. This doesn’t mean being obnoxious or inappropriate; it simply means being intentional about addressing, in a respectful way, things that you know are obviously wrong.

» Connect with and support marginalized movements. If you come from a place of privilege, use that privilege to help minority groups. Attend a Pride march. Join a minority chamber of commerce. Go to a black church. Find the right outlets within your community, and connect! If people ask what you’re doing there, say, “I’m here to support you.” Then ask them how you can do that. Become an engaged ally that’s willing to learn from minority leaders what makes an actual difference, because it might not be what you think. » Make inclusion part of your daily life. If you are in any position of authority, be it at work or for an organization or club, you have an opportunity to be more inclusive of people from other backgrounds and communities. But it’s easy to make the mistake of thinking that simply not discriminating is enough. We can do better by taking proactive measures to invite people of color, immigrants, and other marginalized people into our space. If you’re recruiting, don’t simply put ads on the usual websites; find places where you can recruit people underrepresented in your workplace. For example, predominantly black colleges and black business associations can help you recruit. LGBT community centers have job posting boards and you can advertise in LGBT media. Your town or city may have organizations that exist specifically to connect immigrants, refugees and racial minorities in the community. Change our workplace culture and our community, and we can start to see our society change! I hope we recognize how powerful a platform we have at our disposal as an industry. Money is the universal language. Everyone needs it to survive and thrive — no matter who they are. It’s a great cross-cultural equalizer and a significant door opener when you have the right heart. Let’s seize the opportunity to embrace diversity, inclusion and equity, and lead NAIFA and our industry forward in 2020 and beyond! Brian Haney, LACP, CLTC, CFBS, CFS, CIS, CAE, is vice president of The Haney Group in Silver Spring, Md. Brian may be contacted at

July 2020 » InsuranceNewsNet Magazine



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

St p The Drop In Individual Life Insurance Policy Sales A review of products, distribution and markets sheds some light on why life insurance sales and ownership haven’t kept pace with the growing U.S. population. By Elaine F. Tumicki


ince the early 1980s, life insurance policy sales have declined significantly while the American population has been increasing. In 1983, life insurance companies sold 17.7 million new individual life insurance policies. Since then, new policy sales have declined most years, dropping 46% to 9.6 million in 2018. Life insurance ownership rates have also declined, from 62% of households owning at least one individual policy in 1984, to 44% in 2016. Why haven’t sales and ownership kept pace with the growing population? A review of products, distribution and markets sheds some light.

Product Evolution

High interest rates (above 14%) in the late 1970s and early 1980s posed a challenge for the industry. Guaranteed cash values in whole life products assumed a much lower rate of growth. This disparity between guaranteed growth in cash values and current market rates led to the concept of “buying term and investing the difference.” The industry created universal life — which pays current interest rates on cash values — in response to this threat. UL sales grew rapidly in the early 1980s, replacing many whole life policies along the way. Over the subsequent decades, UL was followed by variable UL, lifetime guarantee UL and indexed UL. One commonality among these product designs, they were most often targeted for more upper-income markets.

Shifting Distribution

Life insurance distribution began shifting in the 1980s from affiliated agents, who 52

InsuranceNewsNet Magazine » July 2020

typically represent one carrier, to independent agents representing multiple carriers. Independent agents tend to be older and sell fewer larger policies to more affluent consumers. The average policy sold by independent agents is typically more than double the average for affiliated agents. During the 1980s and 1990s, fewer households reported owning life insurance they purchased face to face. In 1984, 56% of households owned policies that were purchased face to face; by 1990, that dropped to 42%. A decline in contact with insurance agents may contribute to the decline in the number of policies sold. Consumers often need someone to nudge them to purchase life insurance.

Changing Markets

Households with children are — and always have been — a key target market for life insurance. In 1970, nearly half of U.S. households were families with children under 18. Today, that has dropped to 29%. According to the LIMRA/Life Happens 2019 Barometer study, consumers’ financial concerns also contribute to changing markets. Their top concern, consistently, is having enough money for retirement. While consumers are concerned about dying prematurely and leaving dependents in difficult financial situations, that concern ranks sixth after retirement savings, emergency savings, disability, long-term care and medical expenses. Consumers worry more about living too long and paying for health care than about dying too soon.

Reaching More Consumers

The insurance industry is selling fewer policies, and fewer people have coverage. Yet many recognize they need life insurance. What options will the industry focus on to solve the problem of reaching more consumers? Here are a few ideas: » Workplace. Life insurance works only if it is in force when needed. Nearly half the population leaves their job in a

given year and stands to lose group life coverage. Selling voluntary life insurance at the workplace, but billing it to individuals using automatic withdrawal — instead of payroll deduction — might make insurance more portable. » Technology. Using technology to improve the purchase process for insurance makes it easier to buy. But technology does not help if consumers do not know about, or want, the product. Technology could help identify people who need life insurance. » Simple products. The majority of uninsured — the middle market — cannot afford (or don’t need) the latest bells and whistles. What they need is simple death protection. And simple is more likely to be term or whole life insurance, which, according to LIMRA data, accounts for 90% of individual life insurance policies sold. » Living benefits. Insurers need to be creative. Perhaps consumer “steps” can earn coupons to buy sneakers for themselves or their children. Maybe the insurer could provide sports equipment with company logos. Using technology-based tools and frequent contact to encourage healthy behavior could keep the insurer top of mind with the client. Moving the life insurance purchase needle from decline to increase requires identifying new markets, increasing communication, improving technology, and offering new and different products. The problem of declining life policies will require creative solutions in all these areas. The industry must increase the number of consumers it reaches, as well as incentivize those consumers to purchase. Creative companies that are reaching out in new ways will succeed in reversing this decline. Elaine F. Tumicki, CLU, ChFC, LLIF, is corporate vice president, insurance research-individual product, with LIMRA. Elaine may be contacted at elaine.tumicki@

Life Insurance & Long-Term Care

Long-term care needs change. Financial plans don’t have to. Introducing Brighthouse SmartCare, a hybrid life insurance and long-term care product. ®

Brighthouse SmartCare, a hybrid life insurance and long-term care product, gives your clients power over the unexpected. Its long-term care benefit and death benefit can grow over time, helping them to keep pace with rising costs. Better yet, if your clients never use the long-term care coverage, their money is put to good use through a death benefit for their loved ones. Brighthouse SmartCare offers: • Preparation for long-term care needs • Protection from unexpected events, such as premature death • The ability to grow benefits over time to meet rising future costs Brighthouse SmartCare is the smart way to gain power over the unexpected. Learn more at Brighthouse SmartCare® is an Indexed Universal Life Insurance Policy with Long-Term Care Riders issued by, with product guarantees that are solely the responsibility of, Brighthouse Life Insurance Company, Charlotte, NC 28277 (“Brighthouse Financial”). All guarantees, including any optional benefits, are subject to the claims-paying ability and financial strength of the issuing insurance company. Each issuing insurance company is solely responsible for its own financial condition and contractual obligations. Brighthouse SmartCare has exclusions, limitations, reduction of benefits, and terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, please contact your financial professional. May not be available in all states. Brighthouse Financial® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates. 1903 BDRM631002 ICC18-AP1 5-18-AP1


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