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Medicaid Fraud Rampant in Florida


3Q Annuity Sales Rainy With Spot of Sunshine




Third quarter was pretty chilly for annuity sales. On an overall basis, sales fell 10 perSource: LIMRA Third Quarter Report cent, to $54.3 billion, from third quarter last year, according to LIMRA. On a product type basis, variable annuity sales fell 8 percent to $36.6 billion, and total fixed annuities fell 13 percent. But then there was this sunbeam: One of the fixed annuity products – the indexed annuity – saw sales during the economically challenging quarter reach $8.7 billion, the researcher says. That is equal to second quarter 2012. In fact, puts indexed sales even higher – at $8.72 million, up 0.04 percent from second quarter, up 0.24 percent from the same quarter last year, and just shy of the industry’s record in third quarter 2010. Another spot of growth came from deferred immediate annuities. LIMRA says these emerging products sold $270 million in third quarter, up from $210 million in the second quarter and $160 million in first quarter. The annuity results weren’t pretty on a nine month basis, either. According to LIMRA, overall annuity sales for the period were $166 billion, down 8 percent from the first nine months last year.


The national average rates of long-term care in the United States kept rising in 2012. That’s the word from the most recent data from MetLife Mature Market Institute. The average daily cost of a

semi-private room in a nursing home rose 3.7 percent in 2012 – to $222 or $81,030 a year from $214 daily or $78,110 a year in 2011. Assisted living base rates went up also, by 2.1 percent – to $42,600 a year – and the average rate for a homemaker increased by 5.3 percent to $20 per hour from $19. Only rates for home

health aides and adult day services didn’t budge. They stayed at $21 per hour and $70 per day, respectively, the researchers say. Compared to five years ago, all five categories showed increases, even costs for home health aides and adult day services. Takeaway: All this could help make the case for buying longterm-care coverage. 16


401(k) balances averaged $75,900 at the end of third quarter 2012, reports Fidelity Investments. That’s the highest the average has been since the Boston company began tracking 401(k) balances more than 12 years ago. In addition, the third quarter figure is up 4.2 percent from second quarter and up 18 percent from a year ago, when it was $64,300. There’s more: Over the last five years, average annual employee contributions grew 7.3 percent to $5,900 at the end of third quarter, and average annual employer contributions rose 19 percent to $3,420 at the end of the same quarter.

Anyone who thinks this is hot money chasing pipedreams might want to cool down a bit. Allocations for the new contributions appear to have a conservative tilt to them. For instance, 36 percent of new contributions in third quarter went into more balanced investments, such as target date funds, says Fidelity, noting that this is up from 20 percent five years ago. Meanwhile, new contributions into equities actually decreased – to 46 percent from 62 percent.

InsuranceNewsNet Magazine » December 2012

In most distribution channels, the majority of experienced advisors are over the age of 50 and have more than 25 years of experience, reports LIMRA. That is especially the case for independent insurance agents and registered investment advisors (RIAs). But oddly enough, LIMRA has also found that more than half of the advisors who are within 10 years of retiring or selling their practices have no succession plan.

One might think that such advisors would get on the stick and set up a succession arrangement pronto, but that’s probably not going to happen anytime soon. After all, the very same survey indicates that advisors in all independent distribution channels experience “significantly higher” satisfaction than other advisors. So, it’s doubtful that agents who are satisfied with the way things are will soon feel motivated to plan an exit. That raises a good question, though: What are these advisors telling their clients about who will guide them in the future?


During the past year, nearly 30 percent of boomers stopped contributing to a retirement plan, 16 percent prematurely withdrew funds from a retirement plan, and a quarter reported having difficulties paying the rent or mortgage. These are the challenges that keep Americans up at night, but now is the time to deliver certainty and peace of mind. — Insured Retirement Institute President and CEO Cathy Weatherford


Agents who may be concerned about their future in health insurance sales in the wake of health-care reform could always try expanding to other products. One idea for doing this comes from Standard Life and Accident Insurance Company, a Texas critical illness insurer. It is nudging agents to consider adding

December 2012  

2013 Outlook

December 2012  

2013 Outlook