Serving members royally for 130 years with Royal Neighbors’ Zarifa Reynolds
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A 1035 excahnge to an FIA: A smart choice in today’s environment
PAGE 36
Social Security Fairness Act an opportunity for financial advice
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PLUS: Annuity Awareness Month Special Section PAGE 18
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8 Serving members royally for 130 years Royal Neighbors of America was born at a time when women could not obtain life insurance. Zarifa Brown Reynolds, Royal Neighbors’ president and CEO, describes the changes the fraternal life organization has made in its 130 years and its mission of serving middle-income families.
22 A noble career
By John Hilton
Padric Scott wanted to be a football player first and a doctor second. But he found that wealth management is a noble career.
By John Hilton
Annuities sales are incredibly strong, and a close look at market trends reveals yet more room to run.
Two elite companies offer their unique perspectives on product, process and the future of an ever-changing annuity marketplace.
32 The role of life insurance in disaster preparedness
By Meteena Watson Life insurance can be part of a financial recovery plan.
36 A 1035 exchange to an FIA: A smart choice in today’s environment
By Derek Miser
As retirees shift their priorities to income stability, higher-interestrate products such as fixed indexed annuities offer a compelling alternative.
40 5 trends shaping the benefits landscape for small and midsize businesses
By Steve Wolin
The benefits market faces a number of challenges, and small businesses find it more difficult to provide highquality benefits.
44 Social Security Fairness Act is an opportunity for professional advice By Tyler DeHaan
This change in Social Security regulations will have several financial impacts on clients.
46 Life insurance execs ponder ways to boost sales to meet need By John Hilton
A recap of the LIMRA Life and Annuity Conference.
The annuity industry has experienced a remarkable surge over the past three years, driven by rising interest rates, demographic shifts and increased demand for income security. In 2024, U.S. annuity sales reached a record $432.4 billion, marking a 12% increase from the previous year and the third consecutive year of recordbreaking sales. However, as we move into 2025, the industry faces economic uncertainties and shifting interest rates.
Several factors contributed to the annuity market’s expansion from 2022 to 2024. The Federal Reserve’s interest rate hikes enhanced the appeal of fixed-rate deferred annuities, which offered competitive yields compared to traditional savings vehicles. In addition, market volatility and the 2022 downturn prompted investors to seek stability, leading to increased interest in products that provide guaranteed income. The aging baby boomer population further fueled demand, as many sought reliable income streams for retirement.
Registered index-linked annuities and fixed indexed annuities also saw significant growth, appealing to investors desiring market participation with downside protection. In 2024, RILA sales reached $65.2 billion, a 33% increase from the
previous year, while FIA sales climbed 31%, to $125.5 billion.
As we look ahead, the annuity market may be facing a period of adjustment. LIMRA projects total annuity sales in 2025 to range between $364 billion and $410 billion, a potential decline from 2024’s peak. This anticipated slowdown is primarily attributed to expected interest rate cuts, which could diminish the attractiveness of FRDAs. Sales of these products are forecasted to decrease by 15% to 25% in 2025. Despite this, certain segments are expected to remain resilient. RILAs and FIAs, offering a blend of growth potential and protection, are likely to maintain strong sales. LIMRA anticipates RILA sales will stay at or be slightly above 2024 levels, supported by continued investor interest in products that mitigate market risks while providing growth opportunities.
In this evolving environment, financial advisors must adapt their strategies to meet client needs effectively.
» Product diversification: With potential declines in FRDA attractiveness, the emphasis may be on RILAs and
FIAs, which may offer more appealing features in a lower-interest-rate context.
» Client education: As the playing field becomes more complex, educating clients on the benefits and limitations of various annuity products will become even more important than ever.
» Timing and rate lock-in: With economic unknowns ahead, clients may be looking to lock in current rates before possible declines.
» Technological integration: Digital tools and platforms to streamline processes and enhance client engagement are becoming more important in order to stay competitive.
The annuity industry stands at a pivotal juncture in 2025. While the unprecedented growth of recent years may cool down some, opportunities remain for those who navigate the shifting landscape with education, insight and adaptability.
John Forcucci Editor-in-chief
Efforts to regulate the use of big data and artifi cial intelligence by insurance companies are rife with myths that threaten to harm policyholders, a leading trade group claims.
“[U]nfounded notions about the effects of using big data and AI in insurance are running rampant, inappropriately serving as the basis for and inappropriately driving creation of new policy relative to risk-based pricing,” reads the conclusion of the issue paper from the National Association of Mutual Insurance Companies, which represents mutual property and casualty insurance companies.
Forty-seven percent of technology executives say AI will have a significant impact on the insurance industry in the next three years, according to a recent LIMRA survey, but 48% of insurers do not have an AI training program yet.
The rush to regulate the use of AI must take into account that insurance works best when underwriters get an accurate risk pool, explained Lindsey Klarkowski, NAMIC’s policy vice president in data science, AI/ML, and cybersecurity.
Americans are increasingly worried about high inflation and new tariffs increasing their cost of living, according to the Quarterly Market Perceptions Study from Allianz Life.
The survey said that most Americans are expecting inflation to get worse, with 71% saying they expect it will get worse over the next 12 months. This is up from 60% at the end of last year. And three in four Americans are now worrying that new tariffs will increase their cost-of-living expenses. Many consumers are also worried about how continued inflation will affect their financial future, according to the survey. About 73% are concerned that the rising cost of living will affect
their retirement plans. In the short term, 79% worry about rising inflation continuing to have a negative impact on the purchasing power of their income in the next six months.
Tariffs are fueling the International Monetary Fund’s pessimistic growth forecast for the U.S. In its latest projections, the IMF now calls for a U.S. growth outlook of 1.8% in 2025, down 0.9 percentage points from its forecast at the beginning of the year.
IMF’s chief economist, Pierre-Olivier Gourinchas, added that the weakening consumer confidence and consumption
In the financial markets, no brand compares to the brand of the U.S. Treasuries … . We put that brand at risk.”
— Citadel CEO Ken Griffin
indicators also factored in its downward revision.
Although it is not yet forecasting a recession in the U.S., Gourinchas said the IMF now views the odds of a recession at 40%, up from 25% in October 2024.
Millennials came of age during the Great Recession, watching their parents struggle with job loss and diminished retirement savings, and then facing their own challenges in adulthood with buying homes and paying off student debt. They want to help the next generation — Gen Z — in case a similar economic downturn impacts their financial future.
Millennials are taking to TikTok to share their wisdom with Gen Z, posting preparation tips and no-buy lists to ease the minds of young people who could be entering their first major recession as adults.
Bits of wisdom include taking whatever job you can land after graduation, living
President and CEO of Royal Neighbors of America Zarifa Brown Reynolds shares the mission of the fraternal life insurance organization she leads: insure lives, support women and serve communities.
Royal Neighbors of America was founded by women at a time when women couldn’t get life insurance. “In 1895, nine women got together, and they met socially just to talk about their life and their community,” said president and CEO Zarifa Brown Reynolds. “Out of that meeting grew the idea that women needed to also be able to have access to life insurance, and they started Royal Neighbors of America. Now that women can obtain life insurance, we support everybody.”
At Royal Neighbors, Reynolds said, “we lean into what we think we’re good at. I’ve worked at other insurance companies where everybody’s going after the affluent portion of the population. We serve lower-middle-income and middle-income families, primarily through our annuity products and through our life products.”
Prior to joining Royal Neighbors in 2023, Reynolds was an executive at Guardian Life, where she led national sales, account management and underwriting teams. Before joining Guardian, she was head of corporate development at TIAA, where she was responsible for corporate mergers and acquisitions, corporate finance, strategic venture capital investing, and corporate strategic projects.
In this interview with InsuranceNewsNet Publisher Paul Feldman, Reynolds talks about Royal Neighbors’ mission and about building the business.
Paul Feldman: You have an amazing resume, from Brown University undergrad, and a law degree from Harvard University through a stellar career to president and CEO of Royal Neighbors of America. How did you end up in this industry?
Zarifa Reynolds: People could look at my resume and think it’s amazing. I just think of it as my life journey. I’ve always wanted to help people, from the time I was young. And so every choice that I’ve made — from what I studied in college to going to law school to ultimately pivoting to the insurance industry, and now as CEO and president of Royal Neighbors — is just about helping people. And that’s what Royal Neighbors was founded to do, and that’s the value that we live every day.
Feldman: Royal Neighbors is a fraternal organization. Tell us a little bit about the company and what makes it different.
Reynolds: The company is owned by members, not by stockholders. There’s a common bond, which means that the people who buy insurance products and services from a company such as Royal Neighbors believe in our mission. We exist to insure lives, support women and serve communities. A lot of our insurance proceeds are directed toward programming around this mission of
with food insecurity in our neighborhood because he’s somewhat fortunate and he sees how a lot of people are struggling. So he founded a Royal Neighbors chapter, and they distribute healthy food products supported by Royal Neighbors. Some of it is supported by his own fundraising and his own dollars, but a lot of it is supported by Royal Neighbors. When you do community good, Royal Neighbors will give you money every month, every quarter, for special projects to help you engage in that endeavor. That is our common bond. No matter who you are, you can serve somebody else. And if
empowering communities and women through our many philanthropic efforts.
We do this in several ways, but most notably, we have a scholarship program that we’ve administered for many years. If you’re a member of Royal Neighbors, we will give you scholarships for all four years of college. You just need to apply through the process. We also have what’s called Nation of Neighbors. We give 10 grants of $10,000 to nonprofits that are serving communities and focusing on women throughout their service in the communities. Last but not least — and this is where the bulk of our social good comes in — we’re a national life insurance company. When you’re a member of Royal Neighbors, you can either have an insurance product or you can also be a member through service, and you are a part of what’s called a chapter system. We have more than 200 chapters throughout the U.S., and we fund each of these chapters as they do good works in the community.
For example, my son wanted to help
you lean into service, you feel good about yourself, you feel good about humanity and you’re really making things better for everybody.
Feldman: That’s a great mission. How did the company get started? And how are you building brand recognition?
Reynolds: Royal Neighbors was founded by women at a time when women couldn’t get life insurance. Now they can, so we support everybody. We have a diverse employee base. Many members of the executive team who make things happen on a daily basis are men in various senior roles in the organization, and that’s been the case for a long time. We lean into our history, we’re proud of it, but we recognize that we’re here to help everybody.
In 1895, nine women got together and they met socially just to talk about their life and their community. Out of that meeting grew the idea that women needed to also be able to have access to
life insurance and they started Royal Neighbors of America. They were supported by men because we have still a close relationship with another insurance company, called Modern Woodmen, which literally I could see from my window at Royal Neighbors. The men of Modern Woodmen were husbands of the women of Royal Neighbors and supported them in that endeavor, and that’s how Royal Neighbors was started.
As far as getting our name out there, we do try to do it through our chapter system. As people are out in their community doing things and we support them through our net income by helping them in their community service, we feel as though we’re getting our name out there.
We sell our products through third-party distribution, so we’re in the briefcase of a lot of agents and we engage with them in a number of ways. We go to their conferences and talk about the great work that we’re doing at Royal Neighbors and our remit about serving lower-middle-income and middle-income families through our products and services. We host our own conference with agents as well.
I think having conversations like the one I’m having with you is another way to get our name out there and create brand recognition. We are on all the social media outlets — Twitter, Facebook, LinkedIn and others. Especially when we’re refreshing it or issuing a new product and service, we do a big marketing push to get our name out there as well. I’d be remiss if I didn’t say we’re celebrating our 130th year as an organization this year.
Feldman: How did you get into the insurance industry?
Reynolds: Some of it was a little bit of luck. I went to law school in Cambridge, Mass., and I happened to go to an alumni event and heard a former president and CEO of TIAA-CREF, Roger Ferguson, speak. And I hadn’t really thought a lot about insurance up until this point, and I was probably 10 years into my legal career — a very junior partner — and I was just amazed by his presentation. Then, as luck would have it, one of the deals that I worked on subsequently was for TIAA. So, I was a lawyer working at a large
international law firm, and my client was TIAA. I thought, “That guy was so fascinating during his presentation at an alumni event and now he’s a client; maybe there’s something there.” Sometimes it’s just that spark and luck where things start to come together.
I knew that I loved helping people in a more real way. As a corporate finance and mergers and acquisitions lawyer, I was working on important stuff, but I didn’t get to follow the deal once it closed. I still had this inkling that I wanted to go to a place where I could see things through for a longer period of time. That was the reason why I wanted to transition from being a deal lawyer to going into the business, and that’s what I did at TIAA — and then subsequently at other insurance companies.
Feldman: I think the industry is missing an opportunity in the way it serves women. What happens in a lot of cases, if the husband dies first, is that the advisor or agent loses that client. What can an agent or an advisor do to work with women undergoing that kind of transition?
Reynolds: Men tend to die before their female spouse or partner does. Also, families often use a lot of their assets in caring for that loved one and so, at the end of the day, the women are left without as much financial security. I think we must be very deliberate about how we think about insurance. A lot of times, at least early in life, we’ll insure the breadwinner, and a lot of times that will be the man in the house. We need to have a broader conversation around how we can protect the entire family.
I think as an industry we could do a better job of educating people and communicating with them when a death benefit is paid, especially concerning how to use proceeds from a death benefit to provide for care for the surviving spouse. One of my favorite riders, and I have one in my own personal life, is long-term care. I think that’s especially important for women. I think we all know what happened in the long-term care industry back in the day with stand-alone policies. And those are very expensive now, if you can get one at all.
Feldman: What do you see happening in the marketplace right now? Where are the opportunities and growth areas that you see?
Reynolds: There are many, but for Royal Neighbors, we lean into what we think we’re good at. I’ve worked at other insurance companies where everybody’s going after the affluent portion of the population. We serve lower-middleincome and middle-income families primarily through our annuity products and through our life products. Our flagship product is a final expense product. We are an industry leader in this area. The policy sizes are $10,000, $20,000, $30,000 — not huge policies. The average age of the customer getting these policies is probably in their 50s. We believe that this portion of society needs the financial protection.
We have a very simple product. We try to do point-of-sale delivery, which means when you’re talking to an agent, we should be able to make a decision almost on the spot about what risk class you’re going to fall into from an insurance perspective. So, given that we’re looking at an underserved portion of the population, that’s really where we see our greatest strength, to be able to help people in general.
Feldman: You’ve been at Royal Neighbors for more than two years now. What do you believe you have accomplished, and where do you see the company going?
Reynolds: I view myself as a servant leader and as someone who’s there to empower everybody else to be able to do the best that they can for our customers. We’ve grown like gangbusters by Royal Neighbors standards. We’re not the biggest life insurance company, but on the life side, we’ve grown year over year in top-line sales more than 50% in our life products each year that I’ve been there.
And on the annuity side, it’s been between 50% and 100% growth. One year we grew more than 100%, and during the other years, we’ve grown roughly 50%. There are a lot of people who are underserved. We’re looking around and we’re thinking, “All these other people need protection too. What can we do to serve
them?” We think there’s a lot of potential out there to continue to grow and we’ll continue to lean into that.
Feldman: Where is Royal Neighbors going in terms of product development?
Reynolds: As I said, our flagship product is final expense. We revamped that product last year and rolled out a new product that was well received in the marketplace and that fueled our growth. We’re in the process right now of revamping our single-premium whole life product, and that was rolled out in Q2 of this year. Our financial plans are projected to have outsized growth in that product as well. We’re leaning into ease of doing business, using an e-app, trying to make more point-of-sale decisions and working with our distribution partners to have a really good go-to-market strategy.
On the annuity side, I think everybody knows about the growth in the annuity industry over the past several years, so there’s a lot of opportunity in the marketplace to continue to grow from an annuity perspective.
With all of this growth, though, I have to talk about capital management as president of a life insurance company. We have engaged in a couple of capital management strategies in order to enable us to maintain and sustain our capital, because we’re an A-rated insurance company. We’re really proud of that, and we want to retain an A rating. So before we execute our growth plans, we put capital management strategies in place to be able to preserve our capital and our A rating and ensure we’re going to be around for people. We did a structured reinsurance transaction my first year with the company, and then, last year, we executed on a commission processing transaction. Both of those transactions helped us to make sure that we have the capital in order be able to sell this business in the market.
Feldman: The underwriting process is still time-consuming. How is Royal Neighbors looking to change or improve that?
Reynolds: It is still slow. It’s getting better. Artificial intelligence and other technology
Members of the Royal Neighbors chapter called “Getting Florida Fed” prepare to distribute food. Zarifa Reynolds (far right) stands beside her daughter Julia and husband, Cedric. Her son Josh, far left, founded the chapter, which focuses on providing food to families in the Miami area.
are really helping us. We’ve just embarked on a big e-delivery process so that we can deliver our insurance contracts for our final expense product using e-delivery. Rome wasn’t built in a day, so we can’t do everything all at once, but we’re taking steps methodically to try to modernize.
Feldman: This has been an amazing interview. Is there a question that I should have asked during this interview that I didn’t?
Reynolds: Oh, that’s interesting. I guess maybe why I’m most excited about the future of this industry. I like theoretical things as well as practical things, and one of the theoretical things that I’m starting to spend more time thinking about is longevity. I think we know intuitively that people are living longer and healthier lives, but I don’t think as a society we’ve figured out what that means. For example, my father-in-law, who is 80 years old, is still semi-working. There’s a lot of this going on.
I’m excited about life insurance because people will be living longer and they will need to figure out how they live their life, how they accumulate assets. If they’re looking at an annuity product, how do they remain productive members of the society? And, heaven forbid, if they’re
living longer and they’re unhealthy, how do they fund being taken care of during that time?
The whole notion of longevity, I think, is a reason to be excited about being in the life insurance industry. You can use a life insurance contract to do other things than paying a death claim, especially with long-term care and other things. It’s projected that we’re going to have a barbell society probably in about 20 or 30 years. There will be a lot of people over 65 and not that many people under 65. What does that mean, and how do we continue to exist as a society?
Feldman: A lot of carriers are working to get their policyholders to be healthier. What is Royal Neighbors doing to help their members be healthier?
Reynolds: We’re starting to do that with wearables and information about what it means to live a healthy lifestyle. Because if you live to be 80 or 90 or 100 — whether you’re healthy or unhealthy — it has huge consequences for your quality of life but also economically for society. And that’s very true for life insurers because we want people to live a long time. But it’s also the right thing to do in terms of helping people.
An industry partnership is delivering long-sought digital answers to benefit the entire business of annuity sales. •
By John Hilton
The promise that technology would change the annuity industry is an old story with more tales of potential than actual results.
But the narrative is changing — so much so that carriers were almost caught off guard by the power of a new all-digital, paperless transaction process for annuity transfers that is cutting cycle times by 94%.
The overall “Digital First” project was led by the Insured Retirement Institute.
“This first paperless transfer annuity transaction is just the beginning of what our Digital First for Annuities initiative can deliver,” said Wayne Chopus, CEO of IRI. “We are creating a modern, consumer-centric infrastructure by embracing advancements to help streamline processes, reduce errors and accelerate transactions. This transformative work continues to gain momentum.”
IRI members and The Depository Trust & Clearing Corporation collaborated for more than two years to build a digital framework to support real-time processing of transfers, including money settlement.
“We need to stop thinking about the way things have always been,” said Katherine Dease, chief technology and innovation officer at IRI, recalling those early planning conversations. “Big, large, flat files make it hard to get your arms around the data. We need to be thinking about what our consumers and financial professionals are demanding: access to data right now in real time.”
IRI rolled out its first digital priority in November, a paperless, carrier-to-carrier replacement annuity process. Athene, the No. 1 seller of annuities, was the first company to sign up for the effort.
Since then, Jackson National Life Insurance Co., Prudential Financial and Sammons Financial Group have joined
them. In a blog post for IRI, Sandy Stokley, senior vice president or operations for Athene, urged competitors to join the project.
“Complacency is no longer an option,” Stokley wrote. “Improving the transfer experience benefits our customers, financial professionals and distribution partners. … Collaboration can expand the annuity market and ensure our industry’s long-term viability.”
IRI anticipates that 14 carriers will be using the Digital First process by the end of 2025, Dease said.
Perhaps the most common complaint about life insurance and annuities is that it is an onerous process that can take weeks. In the case of annuities, many rates are changing fast, and some buyers might not want to wait the 18-day average it takes to seal a deal.
Digital First is bringing that average down to less than 24 hours, Dease said. It can mean the different between closing an annuity sale and a polite “no thanks.”
Many financial professionals are “calling their carriers and their distributors and asking, ‘What just happened?’” Dease said. “‘I issued this transaction yesterday, and it’s already settled and in the consumer’s account.’”
John Carroll, senior vice president and head of insurance and annuities at LIMRA and LOMA, is not surprised.
“IRI’s Digital First program will be a game changer for our industry,” he said. “LIMRA research consistently shows the number one obstacle preventing financial professionals from selling annuities is the extensive paperwork and time it takes to finalize a contract.”
Digital First is not just about speed. It should cut down on errors and also help annuity sellers get in front of financial advisors and planners, Carroll said.
‘Directly benefits our clients’ Sammons Financial Group joined Digital First in March. Its participating companies
Co., North American for Life and Health Insurance, Sammons Retirement Solutions, and Midland Retirement Distributors.
The time is long past for annuity sellers to deliver a level of immediacy that consumers enjoy in nearly all transactions, said Casey Decker, chief operating officer of Midland National and North American.
“We have all grown accustomed to on-demand services,” Decker said. “Our clients expect this level of convenience, and it is essential for the financial services industry to continue simplifying and speeding up the processing of financial transactions. This has become increasingly critical for today’s retirees.”
The digital-first project is a “build once, use many” effort that will hugely benefit all annuity sellers and distributors, Dease said. That is bringing normally fierce competitors together in an unusual open collaboration.
“They’re creating the standard, and they’re all agreeing, which has never happened before,” Dease said. “They’re all agreeing that we have to do it consistently in a ‘build once, use many’ approach or we are not helping ourselves.”
While the paperless replacement process is the first step, there are many more steps to come to perfect a digital-first annuity sales process, e.g., pre-sale, onboarding, application, servicing and management, how the annuity shows up in new tools, and the payout and the exit statements.
“Anywhere an annuity could show up and should show up,” Dease said, “we are working on addressing standards to make it easier for the innovating firms and the distributors to create their very best experiences.”
Annuity sales are incredibly strong and a couple of positive trends indicate that sales should remain high in the years ahead. •
By John Hilton
It seems as though annuities are selling as fast as the paperwork can be completed. But, a close look at market trends reveals yet more room to run.
A couple of key ancillary developments are supporting further growth in the annuity market: annuity replacements and the rise of in-plan and fee-based annuities. That is, developments beyond the pure demographics of more than 4 million baby boomers turning 65 each year.
It all makes for a terrific time to be selling annuity products.
“You have the demographic wave, and that’s not going away,” said John Carroll, senior vice president and head of insurance and annuities at LIMRA and LOMA. “For the annuity industry, certainly, this is a huge opportunity.”
Total annuity sales reached $434.1 billion in 2024, up 13% year over year, according to LIMRA’s U.S. Individual Annuity Sales Survey, which represents 83% of the U.S. annuity market. It marked the third year of record-high annuity sales.
Even during solid-to-strong years from 2014 to 2021, annuity sales never strayed far from about $225 billion annually. Starting in 2022, a new sales frenzy took hold.
Nearly 80% of participating carriers reported positive growth, said Bryan Hodgens, senior vice president and head of LIMRA research.
“The past few years have transformed the annuity market,” he added. “Although we don’t expect sales at the levels seen in the past two years, LIMRA predicts total annuity sales to be well above $350 billion in 2025 and remain above $300 billion through 2027.”
After years of near-zero rates, the Federal
Reserve began aggressively raising rates in March 2022 to combat the highest inflation in more than 40 years. The Fed hiked the federal funds rate seven times in 2022, and took it to 5.5% in July 2023.
The rate remains at 4.25% to 4.50%, but no one knows for how long. President Donald Trump continues to pressure Jerome Powell, chairman of the Federal Reserve, to cut the rate further. The Federal Reserve met May 6-7, after this issue went to press.
Regardless of what happens with interest rates, they are likely to continue to drive replacement annuity sales.
business going out the door it’s moving to other carriers.”
SILAC entered the annuity space in 2018 with just over $150 million in sales, Acker noted. The following year that figure jumped to $1.7 billion, and “we’ve grown ever since.” he added.
Replacements are likely to die down, Acker said, as consumers have fewer opportunities to move to higher rates. But that does not mean annuity sales have to decline, he said.
“I think overall we’ll probably see sales come down slightly within the next year, but I don’t view that as necessarily
“Although we don’t expect sales at the levels seen the past two years, LIMRA predicts total annuity sales to be well above $350 billion in 2025 and remain above $300 billion through 2027.”
Replacements soared along with interest rates as consumers traded in multiyear guaranteed annuities for new versions with better returns.
Talk of interest rates dropping is also likely to cause advisors and consumers to seek better rates while they last. Total 2024 MYGA sales were $156.3 billion, according to Wink Inc., and drove the market higher.
As long as MYGAs can compete with certificate of deposit rates, they offer the added bonus of tax deferral, said Dan Acker, president and chief marketing officer of SILAC Insurance Co.
“With MYGAs — I’ll call them a commodity — the highest rate typically wins. There aren’t a lot of bells and whistles with a MYGA, and that’s the beauty of them,” Acker explained. “But I think given the replacement business that’s happening, some carriers have a lot of
negative,” Acker said, “because if we can continue to focus on first-time annuity buyers, we can increase that number.”
Fee-based annuity sales have been gaining traction in recent years, reflecting a broader trend in the financial advisory landscape toward fee-based compensation models.
By 2026, more than three-quarters of the wealth management industry (77.6%) is expected to operate on a fee-based model, representing an increase of more than five percentage points from 2024, according to a new Cerulli study.
The shift toward fee-based services is driven primarily by a transition from commissions to asset-based fees among the wirehouse and broker/dealer channels, according to the recent edition of “Cerulli Edge — Americas Asset and
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Wealth Management Edition.”
Long-held negative opinions about annuities are slowly fading among advisors who see what a guaranteed income element can bring to a financial plan. Many carriers responded with aggressive suites of fee-based annuities.
Jackson, for example, offers advisors fee-based variable annuity and registered index-linked annuities, as well as a fixed-indexed linked annuity, and has selling partnerships with Morgan Stanley, Gradient Insurance Brokerage and Kestra Financial.
is meant to provide a stable source of income. By providing access to guaranteed income through a target date fund, LifePath Paycheck is meant to be more stable than a standard 401(k).
LifePath Paycheck launched in April 2024, and BlackRock has partnerships with Equitable Financial and Brighthouse Financial to provide annuities.
In-plan annuities would not be possible without the SECURE Act (Setting Every Community Up for Retirement Enhancement Act), which passed in 2019 and included several initiatives aimed at
Old-school annuity sellers are striking new partnerships with investment firms to make guaranteed income options a regular feature of retirement plans.
“We continue to see financial professionals transitioning to more of a feebased structure as well as an increasing number of RIAs working with licensed [outsourced insurance desks] to provide customized services for their clients,” said Tim Munsie, head of RIA, platform distribution and planning for Jackson. “We are continually evaluating our products and services to ensure they meet the everchanging needs of retirees and financial professionals.”
The trend driving annuities in financial planning is also seen in the meteoric rise of in-plan annuity options. Old-school annuity sellers are striking new partnerships with investment firms to make guaranteed income options a regular feature of retirement plans.
“The in-plan annuity is a big deal in the annuity space,” said John Carroll. “That could be enormous for growth.”
J.P. Morgan Asset Management is partnering with insurers on its SmartRetirement Lifetime Income, while BlackRock offers LifePath Paycheck to spotlight the benefit, which makes it easier to save for retirement. It later was expanded by SECURE Act 2.0 in 2022.
When a participant enters retirement, they will receive a guaranteed amount of funds in a form like a paycheck that
making it easier for Americans to save for retirement. It was later expanded by SECURE Act 2.0 in 2022.
One of the biggest things the SECURE legislation did is provide a safe harbor for plan sponsors to offer annuities inside retirement plans.
But challenges still remain, with many products too complicated to fit the plan market, said Greg Jaeck, senior product director, retirement products for Edward Jones. “You’ve got participants, plan sponsors, third-party administrators and fiduciaries with oversight, all of whom have a stake in retirement plans.
“I think in order to be successful, you’ve got to get them on board, and you have to have very, very simplistic products overall,” Jaeck said during LIMRA’s spring Life and Annuity Conference. “I think a lot of the products right now have a little bit of moving parts, and it’s hard to explain overall. So I think over time this is going to happen. It will take some time.”
InsuranceNewsNet
In this year’s Annuity Awareness Month Thought Leadership Series, great minds from two elite companies offer their perspective on product, process, and the future of an ever-changing annuity marketplace.
The Power of Focus: A Smarter Approach to Annuities by Ibexis PAGE 18
Senior Editor John Hilton 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 X @INNJohnH.
by
20
By focusing on what matters—product, distribution, and process—Ibexis is delivering speed, simplicity, and value like never before.
In a marketplace full of new entrants and aging giants, Ibexis Life & Annuity Insurance Company ® has carved out a singular path to growth — one built on focus, purpose, and process.
Launched without legacy systems or back-office baggage, Ibexis is purpose-built for today’s accumulation-focused annuity market. The company has prioritized three strategic pillars since its inception: versatile product design, a tightly curated distribution model, and fully digital operations. That laser focus allows the company to remain nimble, responsive, and committed to longterm value for clients, agents, and distribution partners.
“We started with a blank slate,” said Nate Gemmiti, CEO of Ibexis. “That gave us the chance to design everything — from our digital systems to our product strategies — around the question: ‘What’s the best possible experience we can deliver?’”
At the core of Ibexis’ strategy is a selective product suite designed to meet the needs of accumulation-focused clients. Rather than offering dozens of variations, Ibexis has focused on refining a few best-in-class solutions — including its flagship FIA Plus™ and the recently launched WealthDefender™ Series— that offer clear value, smart optionality, and strong return potential.
John Hurley, Chief Distribution Officer, emphasized that this focus isn’t limiting — it’s empowering. “We’re not trying to be all things to all people. We’re here to be excellent in what we choose to do,” he said. “By zeroing in on the core of the annuity market — accumulation — we’ve been able to develop products that fit a need, clients trust, and that perform with integrity.”
That focus extends to how those products reach the market. Rather than building a sprawling distribution network, Ibexis works with a curated group of Independent Marketing Organizations (IMOs) that share the company’s growth mindset and values. Hurley calls this a “core club” — a small, select group of IMO partners aligned around service, vision, and trust.
“Annuities are a trust business,” he said. “We want to grow with people who share our values. That means taking feedback seriously, evolving together, and investing in long-
term success on both sides.”
Megan Easton, Senior Vice President of Sales and Marketing, agreed. “We’ve drawn a line in the sand,” she said. “We won’t dilute our relationships by distributing through conflicting channels or creating overlapping products. Our IMO partners know we are here to elevate them — not compete with them.”
Ibexis’ fully digital platform is a key differentiator — and one that translates directly into speed, efficiency, and satisfaction.
“We are 100% digital — no paper applications at all,” said Gemmiti. “That’s not just about convenience. It’s about getting things right the first time.”
The Ibexis system includes a wizard-based e-application process that guides advisors and clients step-by-step, ensuring applications are submitted in good order nearly 100% of the time. Once submitted, the system runs automated suitability checks and immediately routes the application for next steps.
The result? Speed. In the first quarter of 2025, Ibexis’ average turnaround time for transfer business — from the day an application is received to the day the policy is issued — was just 21 days, outperforming industry benchmarks. For new money business, the company averages just two days from submission to issue.
“Our tech build is strong and getting stronger,” said Hurley. “And the results show it. While many competitors are still processing paper or dealing with legacy systems, we’re scaling with speed and precision.”
That same technology also powers Ibexis’ commitment to transparency. The company tracks service metrics such as call center wait times (typically under 15 seconds) and
abandonment rates (less than 1%) daily. Ibexis shares monthly reports with distribution partners that include service benchmarks, transfer times, and other performance data.
“It’s not just about saying we’re great — it’s about proving it,” said Easton. “We want our partners to see exactly how we’re doing and to know they can count on us.”
Ibexis’ investment in digital systems has also created powerful data insights that help partners grow. By capturing every keystroke and interaction, the company has built a robust data warehouse that drives proactive reporting, operational transparency, and business intelligence.
“We give our IMO partners and advisors granular visibility into their own business with us,” said Gemmiti. “That’s another way we differentiate — not just throwing out a high rate, but offering real value.”
That value also comes in the form of tools and resources. “We’re not just product pushers — we want to be educators and thought leaders,” said Easton. “We offer tools that make it easy for advisors to market and sell our products, including educational collateral, calculators, and platforms like our WE Rise program to support women advisors.”
The company is also investing in thought leadership and social media to expand its brand presence, connect with advisors, and continue its growth momentum in a smart, deliberate way.
Perhaps the most distinctive trait of Ibexis is its approach to growth—not through a “grow at all costs” mentality, but with structured, strategic expansion.
“We’re growing in a structured way. That means scaling while maintaining service excellence, financial stability, and pricing integrity,” Hurley shared.
That structure is paying off. It also holds an A- (Excellent) rating from AM Best, reflecting both its financial strength and operational discipline.
“We’re custodians of people’s sacred funds,” said Gemmiti. “Everything we do — our product design, our distribution choices, our service model — reflects the seriousness of that responsibility.”
Ibexis’ renewal rate philosophy further underscores that long-term commitment. The company prices its products with the assumption that renewal rates will remain flat through the surrender period. In the case of its WealthDefender™ FIA, guaranteed participation rates ensure consistency throughout the contract term.
What’s the secret sauce behind Ibexis’ rapid rise? The leadership team credits its people — a group of experienced professionals who have built successful insurance organizations before and know what it takes to do it right.
“We blend an entrepreneurial spirit with deep industry expertise,” said Gemmiti. “Our team has decades of experience, and that informs every decision we make.”
Company culture is grounded not just in financial results, but also in purpose and responsibility to advisors and clients planning for retirement with dignity. “We’re building something special — and we’re doing it with purpose,” said Hurley.
Ibexis may be a relatively new name in the annuity world, but its strategy is far from experimental. With a clear focus on product, process, and partnership, the company is charting a different kind of growth — one that’s fast, focused, and built for the long haul.
“We want people to know us as smart, strategic, and deliberate,” said Easton. “Advisors are choosing Ibexis for what truly sets us apart: innovative product design, fast processing, and true strategic partnership.”
Guarantees are based on the claims paying ability of Ibexis Life & Annuity Insurance Company®. Policy form number ICC22_FIA_0922 and ICC24_FIA_WG_0724.
AM Best Rating effective May 2024. 4th highest of 13 ratings. For latest ratings visit www.ambest.com.
This brochure is for informational purposes only. Review the Contract for product details and benefits. Restrictions apply. Neither Ibexis nor its representatives provide legal or tax advice. Consult with your attorney or tax advisor for additional information. Ibexis’ products are NOT: 1) a deposit; 2) FDIC or NCUA insured; 3) insured by any federal government agency; or 4) guaranteed by a bank, savings association or credit union. Guarantees are based on the financial strength and claims-paying ability of Ibexis. Policy form numbers and product availability vary by state. Withdrawals may be taxable and subject to tax penalties if made before age 59-1/2. Tax-deferral offers no additional value if the annuity is used to fund a qualified plan, such as an IRA or 401k and may not be available if the owner of the annuity is not a natural person such as a corporation or certain types of trusts.
The provisions, riders and optional additional features of this product have limitations and restrictions, and may have additional charges. Contracts are subject to state availability, and certain restrictions may apply. Withdrawals may be taxable and subject to tax penalties if made before age 59-1/2. Tax-deferral offers no additional value if the annuity is used to fund a qualified plan, such as an IRA or 401k and may not be available if the owner of the annuity is not a natural person such as a corporation or certain types of trusts.
In today’s crowded FIA landscape, success isn’t about offering the most—it’s about offering what’s most meaningful. That philosophy guided SILAC Insurance Company’s recent redesign of its fixed indexed annuity (FIA) lineup, resulting in a more strategic, simplified suite of products tailored to the evolving needs of policyholders and the professionals who serve them.
Carrie Freeburg Chief Product Officer
“Every product we offer is built with a purpose,” says Carrie Freeburg, Chief Product Officer at SILAC. “We’ve always focused on adaptability, but now we’ve taken it a step further—aligning each product with a clear objective so our agents can confidently recommend the right fit, and policyholders can make more informed retirement decisions.”
The life insurance and annuity space has seen a surge of innovation in recent years, but also a wave of complexity. As new products and carriers flood the market, the pressure on financial professionals to stay current—and compliant—has never been greater.
“Our distribution partners told us loud and clear that clarity matters,” Freeburg explains. “So we took a hard look at everything in our lineup and asked: Where are we truly competing? Are we giving agents and clients the best chance to win?”
SILAC’s response: simplify, specialize, and refocus. That meant removing underutilized features, repackaging key benefits, and ensuring every product in the suite aligned with a singular purpose—whether that’s accumulation, liquidity, income, or legacy planning.
SILAC’s reimagined FIA lineup now includes four product families, each targeting a specific retirement goal:
• Teton® Series – Built for clean accumulation
• Denali™ Series – Offers enhanced accumulation
• Evolve™ – A stand-alone lifetime income engine
• Vega® Series – Specializes in wealth transfer and legacy planning
Elevation® and Elevation Plus® are optional riders that can be added to the Teton and Denali Series. They provide enhanced liquidity and premium bonus benefits.
“Before the redesign, we had overlapping features across multiple products, which created confusion in positioning,” Freeburg says. “Now, each product has a well-defined role. If you're focused on accumulation, the choice is between Teton and Denali. If your client needs both growth and access to funds, Elevation can be added to Teton or Denali. If income is the goal, it's Evolve. If legacy planning is the focus, then Vega is the solution.”
Standardizing riders, commission structures, and bonus levels across compatible product lines also simplifies decision-making for agents. Agents no longer need to choose between Denali and Teton based on which riders are available. That creates consistency and empowers smarter recommendations.
A key principle in SILAC’s redesign was identifying and eliminating “product drag”—features that added cost without adding meaningful value.
“We evaluated every benefit on a stand-alone basis and analyzed how often the benefit was actually being used,” Freeburg explains. “Even small drags of 1 or 2 basis points can add up. If those features weren’t being utilized, we redirected that value into stronger premium bonuses, better rates, and cleaner benefits.”
For example, life event withdrawal benefits, which were rarely used, were removed to improve other product features. The Denali line, once positioned as a hybrid between accumulation and income, was streamlined to focus on accumulation. Evolve, previously a rider on Denali, is now its own product with a singularly focused on providing lifetime income.
“We didn’t want ‘jack of all trades, master of none’ products,” Freeburg says. “We want each product to lead in its category.”
One of the most exciting enhancements in the reimagined suite is the addition of the Bloomberg Versa 10 Index, developed in partnership with Bloomberg, RBC and SALT Financial. This versatile, multi-asset index is available across all of SILAC’s FIA products and is designed to perform in various market conditions.
This is the first index in the SILAC lineup with exposure to gold and the U.S. dollar. It’s structured to allocate dynam-
ically, meaning it can shift in and out of those components based on performance.
The index targets a 10% volatility level, higher than the traditional 5% seen in most FIAs. That design gives policyholders greater exposure to equity growth while still managing risk.
“In a year marked by volatility and global uncertainty, Versa 10 has stood out,” she adds. “It’s one of the few indexes that’s actually up year-to-date in 2025, and we’re proud to make it available through our entire suite.”
Two riders now available across both Denali and Teton are Elevation and Elevation Plus—liquidity-enhanced accumulation solutions offering free withdrawal features and up to a 20% premium bonus. Both options offer a 10% free withdrawal benefit and cumulative withdrawals, giving clients added flexibility without sacrificing long-term growth.
“We’re not here to impress with jargon—we’re here to deliver results,” says Freeburg. “We’ve kept the design tight. Every feature is designed to support the product’s specialty-”
This discipline ensures that every product is not only high-performing, but also intuitive to position. “Our distribution partners don’t want 20 variations of the same thing,” she adds. “They want precision, clarity, and flexibility.”
To support the rollout, SILAC is offering a full suite of education webinars, marketing tools, and one-on-one support to help agents understand the new positioning.
SILAC has nearly 90 years of experience serving American families and financial professionals. Its roots date back to the Great Depression, when the company famously provided food to all employees to ensure no one went hungry.
“That legacy of practical care still drives how we build products today,” Freeburg reflects. “We don’t chase gimmicks.
Instead of charging an annual fee for these enhanced benefits, these riders use a smarter structure: an annual spread that is never charged if the credited interest is zero.
“This is an elegant solution that aligns with client expectations,” Freeburg explains. “If there’s no interest credit, there’s no spread deduction. It’s a win-win.”
SILAC’s new Evolve product is its first income-focused offering with a guaranteed roll-up rate. Policyholders receive 6% plus any index interest credited, giving them strong growth potential for their income base.
“Evolve is different from most income riders because of its dual strength: guaranteed roll-up and accumulation,” Freeburg says. “It’s designed for clients seeking income soon after retirement or years down the line. And if they never need the income, there’s still an account value to rely on.”
Even with four distinct product lines, SILAC has made a concerted effort to reduce complexity.
We solve real problems, with real value, for real people.”
As the FIA space continues to evolve, SILAC remains committed to innovation that balances protection, performance, and purpose.
“Retirement planning isn’t one-size-fits-all,” Freeburg says. “But our job is to make it easier to navigate. With this new lineup, we’ve clarified our message and elevated our solutions. We’re confident that advisors—and their clients— will feel the difference.”
Padric Scott always planned to become a doctor. Then he got curious about money, finance and investing.
By John Hilton
Padric Scott wanted to be a football player first and a doctor second. As life plans go, it was impenetrably logical.
A large man with uncommon speed and strength, Scott starred at defensive tackle for Florida A&M University. As a student, Scott describes himself as a high school “math nerd” with a 4.6 grade point average who began college on a Stanford University scholarship.
The plan was rolling along nicely when the Arizona Cardinals cut Scott on Aug. 31, 2013. At that point Scott had graduated early with a bachelor’s degree in molecular biology and started a master’s program in biological sciences.
He wanted to become a neurosurgeon. But getting cut by the Cardinals right before the season started gave Scott a time out that wasn’t part of the plan.
“While I was reflecting, one thing I realized was I didn’t know much about money,” Scott recalled. “I thought about all the advisors and people that called on me … and they were all talking about stocks and bonds and real estate.”
That initial interest in financial matters morphed into a career course correction for Scott. He refocused his educational course and completed a Master of Science in financial planning, with a focus on legacy planning, from the American College of Financial Services in 2023.
By then Scott had been president and CEO of Crossroad Capital Partners for five years. The Tallahassee, Fla., wealth management firm is backed by Northwestern Mutual. Instead of just being focused on wealth accumulation, Scott said he prefers to keep the client’s retirement vision top of mind.
“It really brings about fresher, newer, more exciting conversations, where we can really focus on someone’s goals. ... We can truly reverse engineer to today, the actual work that needs to be done,” he explained.
Scott was raised in a science family. His father, Dr. Edward Scott II, is a dentist who graduated near the top of his Harvard dental school class, while his mother, Pamela, is a math teacher with two master’s degrees. His sister, Dr. Kanesha Scott, majored in biology in college and is also a dentist. His brother, Edward Scott III, majored in chemistry.
Scott starred at Lincoln High School in Tallahassee, a national football powerhouse that regularly sends players to major colleges and the National Football League. After spending a year at Stanford majoring in biology, he transferred back home to nearby Florida A&M, one of the largest historically Black universities in the United States.
As a third-generation Florida A&M graduate, Scott wants to help establish a legacy at the university.
“I would love to become that person, that donor, that can go in the school, see those areas of need, see where contributions can be made to strengthen that infrastructure
your labor. … When he sets his mind to something, he pursues with a laser focus.”
That work ethic translated to the classroom as well. Scott completed his undergraduate degree in molecular cell biology long before his college football eligibility was used up. So he took graduate-level courses.
Once Scott’s NFL dream derailed in 2013, he began dabbling in financial services at a SunTrust Bank branch. Scott served as assistant branch manager and got his first experience selling financial products.
But he wasn’t done with football yet, or medicine. For several years, Scott kept his options open. A private banker by day, his football odyssey took him to the Toronto Argonauts of the Canadian Football league to the Philadelphia Soul of the Arena Football League and back to the Winnipeg Blue Bombers of the CFL.
At the end of 2017, Scott moved on from football and finally settled on a career in the financial services world. He formed
What our members have really come to love us for is the level of whiteglove service we offer. Our specific niche in terms of planning that stands out is more so on the distribution and tax side of planning.
so that … anyone who wants to attend that university, they’re walking into an entirely, completely different infrastructure than what I knew,” he said.
On the field, Scott conquered the college game at Florida A&M, where he was named a team captain and powered up his 6-foot-1, 305-pound frame to become the strongest player in the locker room.
According to the Florida A&M sports information office, Scott bench-pressed between 400 and 500 pounds.
The A&M head football coach, Joe Taylor, spoke of Scott’s work ethic: “He is a true testament to reaping the rewards of
Crossroad Capital Partners in January 2018, the name an obvious choice.
“I had an offer to go play football one more year, and I was going to go study and prepare for the MCAT [Medical College Admission Test] after that,” Scott recalled. “And I just was at a point where I realized I did not want to be a part of medicine. The last four years of my life, I had fun in finance. So much so that my brother asked me why I wanted to become a doctor ... that wealth management is a noble career, and why had I not considered it?”
Scott would pick up plenty of education and certifications along the way,
from Certified Financial Planner to Chartered Life Underwriter to his Series 6, 7 and 63 licenses.
He calls his football experience “a real difference maker” and one that continues to provide foundational guidance through lessons in discipline, competition and planning to win.
Today, Crossroads has about a 13-person staff, and Scott is proud of the diversity. Most of the team members are women.
“We run a typical kind of boutique wealth advisory practice that offers your planning, investment and insurance services,” Scott said. “What our members have really come to love us for is the level of white-glove service we offer. Our specific niche in terms of planning that stands out is more so on the distribution and tax side of planning.”
Insurance products are in growth mode on the advisory and planning side, thanks to changes introduced in the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and the follow-up SECURE Act 2.0. The bills removed barriers to offering annuities inside retirement plans, and the industry has responded.
Scott and Crossroads see insurance products as tools that can help clients manage their risk.
“I’ve found in the psychology of clients, most people think they must be one or the other, conservative or aggressive, risk-oriented or growth,” Scott explained. “The truth is you can be both at the same time.”
While eschewing “cookie-cutter outcomes,” Scott said the freedom and possibilities unlocked when a secure lifetime income product is added to a client portfolio are undeniable.
“Studies have proven and shown this integration of investment insurances leads to optimal outcomes,” he said. “So, our clients see that, they buy into that, which really allows us to plan in a very coordinated fashion and reduce taxes as best as possible.”
In 2024, Scott was named one of the National Association of Insurance and Financial Advisors’ 4 Under 40 award winners, given out by the association’s Advisor Today publication.
The 4 Under 40 recognizes “young
Scott was named one of NAIFA’s 4 Under 40 award winners, given out by the association’s Advisor Today publication.
professionals who are making a positive impact on their communities and the industry,” said then-NAIFA president Tom Cothron. “They have committed to belonging to their professional association and getting involved at the local, state, and national levels to help drive the profession forward through their adherence to our Code of Ethics in how they work with clients, and active participation in our grassroots efforts at the state and federal levels.”
Scott and his wife, Valeria, celebrate their one-year anniversary later in June. They lead an active life centered around their church. One of his clients is also a gym owner in the Tallahassee area and keeps Scott in top shape.
“I believe in strong body, strong mind,” he said.
But Scott continually returns to his 13-person team, a group he relies on to
achieve “the vision and the growth and the servicing of our clients.”
One response Scott does not like is hearing “I got a guy” from someone upon learning that he is a financial advisor. Not because it means business rejection, he said, but because of what it says about the industry.
“They’re so used to the people in our profession just trying to sell them another annuity or insurance or investment product,” he said. “My goal is to build this firm to be so large and so recognized that other people are able to see it and look at that as the way to do business. To look at that as a way to address their advisor differently.”
InsuranceNewsNet
Senior Editor John Hilton 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 X @INNJohnH.
An annuity is intended to be a longterm, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to nonqualified distributions. Please consult a tax advisor for specific information. There are charges and expenses associated with annuities, such as surrender charges (deferred sales charges) for early withdrawals.
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 subsidiaries, have a financial interest in the sale of their products.
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 subsidiaries. Minnesota Life Insurance Company and Securian Life Insurance Company are subsidiaries 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.
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Membership does not imply a certain level of skill or training. Clients should conduct their own evaluation. See Membership Requirements at https://www.mdrt.org/join/member-requirements.
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Ameritas salutes our valued field associates who have attained the highest levels of MDRT membership.
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Carroll U. Hoffmann, Hoffmann Financial
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Bryan L. Holen, inSOURCE Financial Advisors
Dominick F. Impastato, Jr. LUTCF, United Wealth Advisors Group - Metairie
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The problems facing life insurance sellers are not new. Americans know they need life insurance. Americans say they want coverage. only slightly more than half of Americans actually have life insurance coverage.
That is down from a coverage level of 63% in 2011, according to LIMRA’s latest Insurance Barometer study.
Those life insurance-needy prospects who do meet with an advisor end up buying in high numbers, but they tell LIMRA that education is crucial. Forty-eight percent of respondents “strongly agreed” that they “need to understand life insurance before they purchase” it. Another 42% agreed.
If they’re not getting information from a financial professional, LIMRA research shows that Americans are turning to social media. Sixty-two percent of all respondents are using social media for financial information, a figure that jumps to 80% with millennials and Generation Z.
Legislation to modernize the taxation of debt investments held by life insurers has been reintroduced in both the House and the Senate.
The Secure Family Futures Act is strongly supported by the life insurance industry and would repeal the current capital tax treatment of debt investments such as bonds. Instead, those investments would be subject to regular tax treatment. The bill would align the tax treatment of life insurance companies’ debt holdings with that of other financial institutions.
The bill was first introduced in the House in September 2023 by Rep. Randy Feenstra, R-Iowa, and the following July in the Senate by Sens. Thom Tillis, R-N.C., and Bob Casey, D-Pa. The bill did not pass during the 118th Congress.
Casey lost his 2024 campaign for reelection, so Tillis needed a new bipartisan partner and found one in Sen. Raphael Warnock, D-Ga.
Workplace life insurance, disability insurance and supplemental health products sales all rose in 2024, according to LIMRA’s 2024 workplace benefits sales surveys. It marked the fourth consecutive year of sales growth. Employers are clearly using their workplace benefits programs to compete for talent in a tight job market, LIMRA said.
For the fifth consecutive quarter, workplace life insurance new premium increased. Total workplace life insurance premium was over $925 million in the fourth quarter, a 10% jump from prior-year results. While the number of employer groups sold fell 1%, participants rose 9% in the fourth quarter.
New premium for term products, which
The biggest issue is just people are overwhelmed and intimidated by the product.”
represents just over 80% of workplace life insurance sales, rose 13% over prior year, while new premium for permanent products fell 1% from the same period last year. Workplace life insurance new premium totaled a record-high $4.5 billion in 2024, up 8% from 2023 premium.
Protection is the new performance in today’s volatile market environment, and that is why so many consumers are turning to indexed universal life.
That was the word from Jared Nepa, senior vice president and head of insurance solutions distribution for Lincoln Financial Distributors. Nepa spoke with InsuranceNewsNet about IUL and its protection against the market volatility that has made headlines and given investors heartburn.
Nepa said Lincoln’s research found that consumers want products that offer protection, but they don’t want to sacrifice too much upside
Source: Guardian Life
“When you think about IUL and the way it’s priced and the way it’s designed, it’s built to do what consumers are looking for — particularly in a time of high volatility,” he said. “You have a level of floor protection that protects the consumer against market loss. The advantage of that in this volatile market is that at least you’re not fearing the loss of your assets.” On the other side, he said, the stated cap or level of participation can impact how much upside the policyowner can capture.
Life insurance settlements might be one of the most underutilized programs available to clients. If you’re not offering them, you’re missing a huge opportunity—and you could be letting clients down. Don’t let them surrender their policies for just cash value when they could be receiving 5-8x more.
Life insurance settlements are no longer just an option; they’re essential in financial planning.
Every year an astounding $100 billion+ in face value of life insurance is lapsed or voluntarily surrendered by seniors, mostly because they are unaware of alternatives, including the sale of the policy.
You need to offer life settlements.
· Average payout — 5 to 8 times more than the policy’s surrender value
· Free, non-binding appraisal — no strings attached, just a quick, accurate valuation of your client’s policy
· Regulated by 45 states — 100% legal, secure, and fully compliant
· No restriction on proceeds — fund healthcare/long term care expenses, supplement retirement savings and more
· More revenue streams — opportunities for additional sales like annuities and assets under management
Your clients receive more money. You unlock revenue streams and new sales opportunities. And you’re providing real value to your clients. It’s an easy choice in many cases.
The Life Insurance Settlement Association is the oldest and largest organization in the industry with over 30 years of experience. We believe in representing the needs of life insurance policy owners and are proud to serve as a leading voice in the industry.
Life insurance can provide comfort and financial stability after an unpredictable event.
By Meteena Watson
The severity of natural disasters in the United States has reached an overwhelming level recently, sparking unrest throughout the country. From the devastating wildfires in California and Hawaii to fierce hurricanes such as Helene and Milton, millions of Americans are still grappling with the stark repercussions of these catastrophes. As a result, individuals across the country are reviewing their insurance plans to ensure they have sufficient coverage in the face of rising catastrophic events.
The National Association of Insurance Commissioners has urged insurers to develop policies tailored for disaster-related events, signaling that climate change is now a key factor in insurance planning.
This presents an important opportunity for life insurance agents to educate clients on how their policies can offer more than just a payout after death — they can also serve as a crucial financial safety net in the wake of unforeseen disasters. Many existing policies include features that can provide financial relief even while the insured is still alive. Agents can play a key role in helping clients understand how life insurance can provide comfort and financial stability after an unpredictable event.
One way life insurance can provide immediate financial relief is through whole life insurance policies, which offer more than just long-term stability. Over time, these policies accumulate cash value that can be accessed as a loan to meet unexpected expenses. Following a natural disaster, clients may need immediate funds for
home reconstruction, emergency repairs or relocation costs. Agents can help clients understand how they can tap into their policy’s cash value without restrictive credit checks or repayment terms — and that can make all the difference in their recovery.
Many individuals in disaster-prone areas struggle to qualify for traditional life insurance due to their medical history. Guaranteed issue life insurance is a type of permanent life insurance that guarantees coverage to applicants regardless of their health or medical history, without requiring a medical exam or health questions, as long as they meet the age requirements.
Research indicates that nearly 40% of Americans — particularly in high-risk regions — underestimate their ability to obtain life insurance. For those already affected by disasters, the quick approval process of guaranteed issue policies ensures peace of mind and no lengthy underwriting delays.
Beyond standard coverage, many policies offer riders that provide additional financial security tailored to a client’s needs. For example, an accidental death rider
may provide an extra payout if the insured dies from a qualifying accident — including certain natural disasters — offering much-needed financial support to beneficiaries. Other examples include a returnof-premium rider, which refunds paid premiums if benefits are never claimed, and an inflation rider that increases benefits annually to combat rising costs.
Another essential rider to highlight is the premium waiver rider, which ensures continued coverage even if a client becomes unable to work due to injury or disability following a disaster. By educating clients about these options, agents can help them enhance their policies to provide added protection during difficult times.
Many life insurance policies offer a significant advantage by allowing clients to access a portion of their death benefit in cases of severe illness or injury. These funds can help cover urgent medical expenses, rehabilitation and daily living costs, easing financial burdens during recovery. This feature stands out by allowing policyholders diagnosed with chronic or terminal illnesses to access a portion of their coverage amount when facing disaster-related injuries or conditions.
For clients who survive a disaster
A Massachusetts jury provided little clarity on an advisor who is also an agent and sells annuities to clients. The Securities and Exchange Commission alleged that Jeffrey Cutter and Cutter Financial Group took advantage of clients.
The jury returned a split verdict, finding that Cutter did not violate Section 206(1) of the Investment Advisers Act of 1940 but did violate Section 206(2).
In March 2023, the SEC filed charges against Cutter for “recommending that their advisory clients invest in insurance products that paid Cutter a substantial up-front commission without adequately disclosing Cutter’s and CFG’s financial incentive to sell the products.”
Starting in 2014, Cutter generated more than $9.3 million in commissions from the sale of 580 annuities to his investment advisory clients, the SEC said.
Cutter’s legal team claimed victory, adding that the jury found CFG “negligent in not also disclosing the specific upfront amount of those commissions for a limited number of clients.”
When New Jersey became the 50th state to adopt best-interest annuity sales standards, it represented a big win for the industry.
Like nearly all the other states, the New Jersey statute is based on a model regulation created by the National Association of Insurance Commissioners
In February 2020, the NAIC adopted a best-interest standard requiring the following four obligations: care, disclosure, conflict of interest and documentation. The best-interest model was designed to harmonize with the Securities and Exchange Commission’s Regulation Best Interest.
The best-interest standard is strongly supported by a financial services industry wary of efforts to bring
annuity sales under a fiduciary umbrella.
The 50-state success came almost one year to the day since the U.S. Department of Labor published its Retirement Security Rule, the latest attempt to rope annuity sales into a fiduciary standard.
Since the RSR was published on April 25, 2024, President Donald Trump assumed office again, almost certainly ending the DOL fiduciary efforts.
AuguStar Retirement made waves recently with a 24% premium bonus on its fixed indexed annuity.
We know from talking with financial professionals that annuities sometimes require more explanation and guidance than other solutions.”
— Rona
Guymon,
senior vice president, annuity distribution, Nationwide Annuities
“whopping” 27% bonus, said Sheryl Moore, CEO of Moore Market Intelligence and Wink Inc., but several carriers are in the 20%+ bonus pool since rates popped back up in the fourth quarter 2022.
In addition, AuguStar has a new lineup of index options, including the S&P MARC 5 index and three new options developed in partnership with MerQube,
The OrionShield 10-year FIA offers a new tiered premium bonus structure, AuguStar said in a news release. The structure allows clients to select up to a 24% premium bonus credited to their initial premium on day one. The new premium bonus options are even available for ages 81-85, the release noted.
North American Company for Life and Health Insurance is tops with a
According to recent survey results from Nationwide, 73% of financial professionals who sell annuities believe that they help them hold on to their clients. Additionally, 81% of those with higher production — those who have sold at least 10 annuities in the last 24 months — feel that they make their client relationships “stickier.”
Not only do annuities help financial professionals build long-lasting relationships, but those professionals also recognize the value of annuities’ key benefits in helping their clients prepare for retirement — especially in today’s turbulent market environment — the survey said.
Thirty percent of respondents aged 40-59 say they are worried about having to rely on their children for financial support in retirement.
You deserve a provider with the financial know-how, superior service, and streamlined experiences that strives to reduce the confusion that complicates retirement planning. With Jackson®, you get expertise you can depend on, and a partner who will help you do right by your clients. That’s clarity for a confident future.
As retirees shift their priorities to income stability, higher-interest-rate products such as FIAs offer a compelling alternative.
By Derek Miser
For those who purchased variable annuities between 2001 and 2015, today’s financial landscape presents a unique opportunity to revisit the terms of these contracts. The financial environment has changed significantly over the past 25 years, with interest rates now at their highest levels since the early 2000s. As a result, many retirees are finding that the growth-oriented, high-fee variable annuities they purchased years ago are no longer aligned with their income-focused needs in retirement.
Therefore, a 1035 exchange from a variable annuity to a fixed indexed annuity might be a smarter choice for protecting principal, reducing fees and securing guaranteed lifetime income.
In the early 2000s, retirement planning often emphasized accumulation. With
interest rates at historic lows, growth-oriented variable annuities with equity-based investment options appeared attractive to investors looking for higher returns. However, variable annuities typically come with significant drawbacks, including market risk, high fees and potential fluctuations in income. For many retirees today, these factors are no longer advantageous, as their focus has shifted from growth to income stability and protection.
As retirees shift their priorities to income stability, higher-interest-rate products such as FIAs offer a compelling alternative. An FIA provides principal protection with a guaranteed floor, meaning you won’t lose money if the market drops. FIAs also offer income riders with potentially lower costs and better features than the lifetime income benefits of older variable annuities. Given these advantages, a 1035 exchange from a variable annuity to an FIA can be a powerful strategy for retirees looking to optimize their income while protecting their principal.
Variable annuities typically carry high fees due to their complex structures.
These contracts often include mortality and expense fees, administrative fees, and additional charges for optional riders, which can erode gains over time. A study by Wade Pfau, professor of retirement income at The American College of Financial Services, found that these fees can be as high as 3% annually, significantly impacting returns.
Moreover, the growth focus of variable annuities may no longer align with the current market environment or retirees’ needs. These contracts were designed when interest rates were low and equity growth seemed more appealing for future income. However, with today’s high interest rates, there are more attractive options available that can deliver reliable income with lower costs and greater security.
FIAs offer several advantages over traditional VAs, especially for retirees who prioritize principal protection and income stability. FIAs are linked to market indices, meaning they allow growth when markets rise but protect against losses when markets fall. This means that retirees can participate in market gains without exposure to downside risk.
Additionally, today’s FIAs often come with lifetime income benefit riders at costs lower than those offered on older VAs. These income riders can provide a predictable income stream, which many retirees find valuable in a high-interest-rate environment. With lower fees and the opportunity for more consistent income, FIAs align well with the needs of retirees who want to minimize volatility and preserve capital.
Retirees can also benefit from high participation rates and caps on FIAs, which allow reasonable growth potential. Although these products may not provide the same upside as equities in bull
with lower fees and reduced exposure to market risk, FIAs provide a financial buffer that’s difficult to achieve with older, growth-focused variable annuities.
For retirees considering whether a 1035 exchange is the right move, it’s important to weigh the benefits of an FIA’s principal protection, income stability and lower fees against the continued market risk and high fees of older VAs.
Given the tax-free transfer option, the process is generally straightforward, though consulting with a financial advi-
FIAs are linked to market indices, meaning they allow growth when markets rise but protect against losses when markets fall. This means that retirees can participate in market gains without exposure to downside risk.
markets, they do offer a balance of safety and growth that is especially attractive in retirement. When using a 1035 exchange, retirees can take advantage of these benefits without facing immediate tax consequences, making it an efficient strategy for rebalancing retirement portfolios.
A 1035 exchange allows annuity holders to switch from one annuity to another without triggering a taxable event. For retirees looking to shift from variable annuities to FIAs, this tax-free transfer is a valuable tool. By exchanging a high-cost, market-dependent variable annuity for an FIA, retirees gain a more stable, predictable income source aligned with their current retirement goals.
In today’s high-interest-rate environment, FIAs can offer more attractive income guarantees than VAs purchased during the low-rate era between 2001 and 2015. This income predictability can be particularly valuable for retirees looking to budget effectively and protect themselves against longevity risk. Furthermore,
sor is crucial to evaluating each retiree’s unique financial situation.
With interest rates higher than they’ve been in over two decades, now is an opportune time for retirees with older VAs to consider a 1035 exchange to a fixed indexed annuity. By taking advantage of this opportunity, retirees can shift from growth-focused, high-fee products to low-cost, income-stable solutions that offer both security and peace of mind. Work with your retired clients to make the most of this strategy, aligning their retirement income with their priorities and paving the way for a more secure future.
Derek Miser is founder of Miser Wealth Partners, with offices in Loudon, Tenn., and Knoxville, Tenn. Contact him at derek.miser@ innfeedback.com.
They say you should never put off until tomorrow what you can do today. Tell that to the many Americans who put off getting a checkup or recommended screening that could help identify and treat serious illness early.
An Aflac survey uncovered what may be keeping many, particularly younger Americans, from going to the doctor: fear of bad news, personal embarrassment, inconvenience, logistical barriers and distrust or dislike of doctors
The survey uncovered that 94% of Americans face barriers to getting recommended screenings in the suggested time frames. More than 3 in 10 members of Generation Z (32%) experience negative feelings of personal embarrassment and distrust of or dislike for doctors (32%). Embarrassment and fear of bad news prevent nearly 1 in 4 young women, particularly Gen Z, from getting screenings on time.
In addition, nearly half (48%) of Americans face logistical barriers such as conflicts with work hours and challenges taking time off work for appointments. Nearly 40% of Americans have canceled or not scheduled a doctor’s appointment because the wait time was too long.
The workplace may have evolved over time, and benefits trends come and go, but one thing is certain: the broker is the backbone of carrier distribution strategy.
LIMRA research found that 79% of employers turn to their brokers or benefits advisors to help them identify and evaluate the choices and select the benefits that best suit their employee base.
The study reveals that the role of a broker is evolving as employers’ needs change and benefits administration becomes more complicated. In addition to the traditional role brokers typically play in helping employers select benefits offerings and the carrier best suited to provide them, they now also help employers manage benefits costs, navigate changing regulations and identify the digital
capabilities that will best serve their companies. Nearly 6 in 10 employers say they expect to have a greater reliance on brokers over the next five years.
As the cost of providing employer-based health coverage goes up, fewer small-business owners can afford to provide it. That was the main finding of a recent analysis by Take Command, which reported only 30% of small businesses offered health coverage in 2023, down from 47% in 2000.
This long-term decline coincides with a sharp increase in the cost of employer-sponsored insurance. Between 2000 and 2023, the average annual premium for small businesses with fewer than 50 employees rose from $2,827 to $7,974 — a cumulative increase of 182%. Over the same period, the
Insurance premiums have been going up faster than wages over the last 20 years.”
— Miranda Dietz, researcher at the University of CaliforniaBerkeley Labor Center
Consumer Price Index rose by only 77%.
Several factors have contributed to this shift. The Great Recession of 2008-2009 placed substantial financial strain on small firms, many of which responded by cutting back on benefits. In addition, the Affordable Care Act led some small businesses to reconsider the value of offering group health insurance. Because businesses with fewer than 50 full-time employees were exempt from the employer mandate, some firms that had previously offered coverage opted to drop their plans.
The popularity of Medicare Advantage plans with older Americans continues to rise every year. But some hospitals aren’t so happy with the plans. Some rural hospital leaders say the only way they can maintain services and protect patients is to end their contracts with MA plans. The problem is that Medicare Advantage plans pay hospitals lower rates than traditional Medicare does. Rural hospital leaders also are concerned about Medicare Advantage plans’ payment delays and a resistance to authorizing patient care.
Patients with diabetes are 25% more likely to lose their health insurance compared with those without diabetes.
Source: Oregon Health & Science University
These aren’t just words — they’re a promise Mutual of Omaha makes to over a million senior-age customers who trust us to help protect their health and well-being.
You and your clients can rest easy knowing promises made are promises kept.
Cost containment, customer experience and increased choice are top of mind for clients.
By Steve Wolin
As the first half of 2025 comes to a close, the employer-sponsored benefits market faces complex challenges. Political shifts, market instability and stubborn inflation have all contributed to those challenges, making it ever more difficult for businesses to provide high-value benefits while managing costs.
Small and midsize employers (those with fewer than 50 employees) have had it particularly tough. Compared with larger firms, smaller businesses often lack the human resources sophistication, negotiating power and population size needed to get the best deal on their health plans. This leaves small and midsize businesses
with solutions that have limited employee appeal, high premiums and few tools to mitigate cost.
As SMBs continue to feel the squeeze, the benefits brokers who advise them can provide value by guiding them to solutions designed with their specific needs in mind. Below are five key trends shaping the 2025 benefits landscape that brokers and employers should consider.
SMBs are motivated to offer health benefits as a means of competing with larger firms for talent, but escalating health care costs and fewer resources to manage them pose significant challenges. PwC projects an 8% increase in employer health costs in 2025, driven by inflationary pressure, prescription drug spending and behavioral health usage. Worse, employees at smaller firms pay a higher share of total premiums than do those at
larger companies — as much as double in some states — according to data from Commonwealth Fund.
However, two models in the group and individual markets have emerged as promising solutions. One is level funding, which offers SMBs the cost control of self-funding via predictable monthly payments and potential refunds on unused claims. With level funding, employers pay a premium for stop-loss coverage, which kicks in when claims exceed a certain threshold, helping employers manage risk. And when employers’ plan design removes barriers like copays and deductibles on routine health services, they tend to see a higher usage of the services that keep people healthy and a lower usage of the emergency room and other services often needed when care is delayed.
The other model is individual coverage health reimbursement arrangements, which have proven equally
game-changing for SMBs. ICHRAs allow employers to set a defined benefits budget and reimburse employees for purchasing the individual health plan of their choosing. This tax-advantaged solution offers two distinct advantages. It allows employers to spread risk across a much larger pool of people, thereby reducing the burden on a company with a small population, while allowing employees to purchase only what they need and not pay for things they don’t.
The demand for virtual care and telehealth services exploded during the COVID-19 pandemic, and usage remained high in the years following. A 2023 study by McKinsey found that 17% of all health care visits from 2020 to 2022 were virtual, compared with roughly 1% in February 2020. This trend has been a signal to reimagine the role that benefits can and should play in the
Only 52% of consumers trust their health insurer to act in their best interest ... . Employers and their employees deserve better — and they’re going to expect it in 2025 and beyond.
members who may benefit from nonsurgical interventions, second opinions and personalized clinical guidance to manage their conditions. Integrated services like these will be critical to helping employers effectively drive down costs.
Another key trend shaping the benefits landscape in 2025 is alternative payment models. These are value-based health care payment structures that incentivize providers to focus on quality, efficiency and patient outcomes as opposed to the traditional fee-for-service model, which pays for each service delivered.
New entrants in this space have developed episode-based prices for more than 150 conditions and procedures that cover about 80% of medical care and costs. Providers who achieve cost and quality outcomes can participate in the savings they generate, and the APMs can flex with variable provider appetites for risk. Keep an eye out for health plans
lives of enrollees. More specifically, it means plan design that includes no-cost access to virtual care services for general medicine and physical therapy, bolstered by digital payment solutions that ease out-of-pocket spending.
It also means using claims data more effectively to mitigate the costliest health conditions. Take musculoskeletal health, for example. Employers spend more than $350 billion — nearly 15% of their total medical costs — annually on treatment for employees with MSK disorders, according to Kaiser Permanente. Claims data can be used to identify high-risk
that offer value-based provider networks and APMs as a key strategy for long-term health care savings.
4.
ICHRAs remain a promising solution for SMBs looking to offer benefits that are both cost-effective and appealing to employees with diverse health needs. Data from HRA Council points to an 84% increase in adoption by applicable large employers from 2023 to 2024, and continued growth is expected in 2025.
There are several trends underlying this growth. One is the introduction
of state legislation that provides tax credits for small businesses that offer ICHRAs. Indiana was first to introduce this incentive, in January 2024, while Georgia, Texas and Ohio have followed suit with similar bills this year. Under the Ohio bill, for example, employers with from two to 50 employees would be eligible to receive a $400 nonrefundable credit per employee, provided they offer ICHRAs to at least a portion of their workforce and contribute at least $400 per employee to the ICHRAs in a taxable year.
Beyond the financial incentives, enhanced customer experiences will be critical to ICHRAs’ long-term success. This is especially true for SMBs, which tend to have underresourced HR teams. It’s important to consider ICHRA administrators with end-to-end solutions that support the entire client experience — from sale to implementation, enrollment to renewal — versus handing them off to a tech platform that offers little to no human support to address issues when they arise.
According to Forrester, only 52% of consumers trust their health insurer to act in their best interest, putting overall satisfaction with the industry at a three-year low. Employers and their employees deserve better — and they’re going to expect it in 2025 and beyond.
So what does better look like? It means creating benefits that actually benefit businesses. It’s plan design that puts member experience at the center. It’s removing cost barriers while providing innovative tools to manage out-of-pocket costs. And it’s surrounding members with accessible customer support teams to provide guidance when it’s needed. These trends underscore what we expect will be a pivotal year for health benefits. Brokers must keep these trends top of mind as they prepare their clients to make important decisions about health coverage.
Steve
Wolin is CEO of Gravie. Contact him at steve.wolin@ innfeedback.com.
There’s a significant satisfaction gap in the financial advice that people receive, indicating a clear opportunity for industry improvement. In fact, only 40% of respondents said they are satisfied with the financial advice they receive. That’s according to a new TIAA Institute study in collaboration with MIT AgeLab.
However, of those who worked with a financial advisor, 62% reported higher levels of satisfaction . This underscores the value and need for greater access to financial professionals, the study said. In implementing financial advice, the research shows that financial advisors use technology such as artificial intelligence to enhance but not replace the trusted advisor relationship.
Although traditional communication methods dominate advice delivery, digital channels are gaining traction among specific demographics, suggesting the need for a hybrid approach to client engagement.
There are few things Americans fear more than death, and running out of money in retirement is one of them. An Allianz Life study revealed 64% of Americans worry more about running out of money than they do about death.
Many factors and economic pressures contribute to this fear of running out of money. The most respondents cited high inflation (54%), Social Security not providing as much financial support as they need (43%) and high taxes (43%). Baby boomers (61%) were more likely than millennials (56%) or Generation Xers (55%) to say high inflation contributed to their fear of running out of money.
Americans are reporting a positive outlook for retirement, with 67% of workers and 78% of retirees confident they will have enough money to live comfortably throughout retirement. Confidence among retirees increased from 74% last year. That was among the results of the annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute and Greenwald Research.
OK, everyone get comfy
One family on rye, hold the pickle 34% of the sandwich generation said they are delaying retirement because they are supporting their adult children or aging relatives.
Source: Athene
Many families’ lives revolve around their children’s sports, and those sports are taking a bite out of family budgets as well, a New York Life survey found. On average, parents spend $3,000 annually on their children’s sports, with 64% reporting rising costs in recent years. As a result, many families are making financial trade-offs to support their kids’ athletic aspirations.
But many parents believe that financial sacrifice is necessary to support their children’s financial future. More than four-fifths (83%) believe their child has the potential to compete at the collegiate level, and 75% believe they have the skills to play professionally. To increase these odds, parents are investing in skill training, travel and recruitment efforts, yet only 22% work with a financial professional to budget for these costs.
To help manage the costs of their child(ren)’s sports, more than three-quarters of parents (76%) have taken some kind of action, usually by reducing spending in other areas (38%), participating in fundraising (29%) or volunteering to offset costs (21%).
The survey report also found concern about changes to the U. S. retirement system, specifically reductions in Social Security and Medicare benefits. Workers remain concerned that increasing costs of living will make it harder for them to save as much as they want. About 7 in 10 workers are worried about making substantial cuts to spending because of inflation, stock market volatility and rising housing costs.
65%
INCOME REPLACEMENT
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As incomes increase, the issue and participation limits of traditional Disability Insurance carriers begin to decrease. To properly insure a highly compensated individual at 65% of income, multiple disability income plans are often required and are layered to provide sufficient income protection.
The following scenario illustrates the way income protection plans can be layered to provide an individual with 65% coverage of monthly income.
EXECUTIVE
INCOME: $900,000 annually $75,000 monthly
This change in Social Security regulations will impact clients who will see their benefits increase. • Tyler De Haan
Social Security provides a financial safety net for retirees, disabled individuals and survivors of deceased workers. It originally ensured individuals met criteria to stay above the poverty line. Today, the Social Security Trust Fund faces challenges due to demographic shifts, legislative shortcomings and increasing obligations.
The Social Security Fairness Act, signed into law by President Joe Biden in January, removes the Windfall Elimination Provision and the Government Pension Offset, increasing benefits for 3.2 million former public servants such as teachers and firefighters. While this is beneficial for those impacted by it, the law increases the strain on the already challenged Social Security Trust Fund, prompting the need for structural reforms for longterm viability.
Generically referred to as Social Security, the trust fund consists of two funds:
» Old-Age and Survivors Insurance Trust Fund provides benefits to retirees, their spouses, widows and, in some cases, minor children.
» Disability Insurance Trust Fund supports disabled workers.
These funds are primarily financed through payroll taxes under FICA, with employer and employee each paying 6.2% (up to a $176,100 cap in 2025) and the self-employed contributing 12.4%. Projections show potential depletion within a decade. According to the 2024 Trustees Report, the OASI and the DI Trust Fund may be depleted by 2035, with payroll taxes covering only 83% of benefits, unless the problem is addressed.
Demographic shifts are straining the overall Social Security system. The baby boomers are retiring while the birth rate is declining. This has reduced the worker-to-beneficiary ratio from 5.1 in 1960 to 2.8 in 2023, potentially falling further by 2035.
The bipartisan Social Security Fairness Act was crafted to address ongoing inequities in coverage, specifically for public employees affected by 1983 provisions that reduced benefits for those with pensions not contributing to Social Security. Critics argue this penalized public servants. The act repealed these provisions, but concerns remain about strain on the fund without additional support.
To address projected shortfalls, policymakers have three central ideas:
» Raise revenues through increased payroll tax rates from 12.4% to higher levels.
» Lift the payroll cap to remove the $176,100 cap on taxable wages.
» Apply Social Security tax to investment income for high earners, similar to the Medicare tax.
Reducing benefits could also be considered. Suggestions include raising the full retirement age from 67 to reflect longer life spans and modifying cost of living adjustments to slow growth, although this would affect retirees’ purchasing power. Means testing benefits could reduce expenses by limiting high-income individuals’ benefits.
Experts have suggested structural reforms to Social Security, with several ideas in discussion:
» Invest in the stock market. Investing a portion of the Social Security Trust Fund in the stock market rather than solely in specialized government bond has its its own supporters and critics. Proponents note an investment fund could increase returns for the Social Security Trust Fund. Opponents charge that negative stock market returns would only hurt the Social Security Trust Fund. Additionally, any investment in the stock market could create crony capitalism opportunities for Wall Street.
» Encourage private retirement savings. The increase in private investment in employer-sponsored retirement plans and individual retirement accounts could reduce the reliance of retirees and widows on Social Security.
» Implement a hybrid system. Lawmakers argue that shifting Social Security to a combination of traditional Social Security and a private retirement account could lessen chances of a Social Security deficit by allowing a portion of the cash to be invested in the stock market. Higher potential returns in the stock market could offset funding shortfalls of the Social Security Trust Fund. Yet tough issues
— like an extended down period in the market and crony capitalism threats — remain. Although this model has been used by many other developed countries facing the same challenges, most stick to a fully public system for programs such as Social Security.
The increased monthly income from the Social Security Fairness Act could increase a retiree’s taxes, affect high earners’ monthly premiums for Medicare and potentially increase their effective tax rate. Suppose there are changes to the cost of living adjustments with any
The Social Security Fairness Act, signed into law on Jan. 5, 2025, repeals the Windfall Elimination Provision and the Government Pension Offset, which reduced Social Security benefits for certain individuals. This change eliminates the penalty for those receiving a pension from work not covered by Social Security, such as some government jobs, ensuring they receive their full Social Security benefits.
• Repeals WEP and GPO: The act eliminates the penalties that reduce Social Security benefits for those receiving pensions from work not covered by Social Security.
• Impact on beneficiaries: This change affects individuals who receive pensions from public-sector jobs (like teachers, firefighters, police officers) or from foreign social security systems, as well as those who have spousal or survivor benefits.
• Retroactive payments: Many beneficiaries eligible for the act received retroactive payments in March, and those who haven’t may receive them soon.
• Increased monthly benefits: Starting with the April payment, some recipients will see an increase in their monthly Social Security checks.
As Social Security faces potential deficits in the Social Security Trust Fund, individuals must carefully consider how these changes may impact their financial future. Some may need to adjust their retirement plans if the full retirement age is to be raised. Others may need to save a higher percentage of their income or start saving earlier. In addition, individuals may consider working longer.
This uncertainty about future benefits requires reflecting on personal savings through 401(k) plans, IRAs, annuities and other investment vehicles. The changes to spousal and survivor benefits may also require couples to reassess their Social Security claiming strategies. In addition, the 3.2 million individuals who may see an increase in their Social Security monthly benefits may want to reevaluate their current income strategy.
future Social Security reform. In that case, individuals may want to evaluate their after-inflation return to understand the long-term implications of their Social Security claiming strategies.
Proactive financial planning is essential to navigate any change to Social Security. Whether through increased savings, tax strategies or optimizing benefit claims, adapting to policy shifts will be key to maintaining financial security in retirement. If you have clients who are among the 3.2 million individuals affected by the Social Security Fairness Act, it would be best to consistently review and update their retirement income plans.
Tyler De Haan is director of advanced sales at Sammons Institutional Group. Contact him at tyler.dehaan@ innfeedback.com.
In a time of transition, life insurance and annuity sales are thriving. But there are many issues to tackle and disruptions at play. These all were topics of discussion at the recent LIMRA Life and Retirement Conference.
By John Hilton
When the life insurance industry gathered in New Orleans for LIMRA’s big spring conference, there was plenty to celebrate — as well as some lingering hurdles.
The LIMRA and LOMA Life and Retirement Conference featured a heavy technology focus, particularly on artificial intelligence and big data, as well as regulatory changes and efforts to guard against fraud.
The three-day conference was co-hosted by the American Council of Life Insurers and the Society of Actuaries.
But it was the industry’s primary goal — attracting more consumers to acquire life insurance coverage — that took center stage and dominated virtually all sessions.
The conference featured takeaways from the 2025 Life Insurance Barometer, conducted by LIMRA and Life Happens. In a concerning but possibly addressable takeaway, consumers continue to wildly overestimate the cost of coverage.
The study found Gen Zers and millennials who rated themselves in excellent health overestimated the cost of a $250,000 level term life policy at anywhere from six to 10 times its actual cost, said Steve Wood, LIMRA research director,
consumer markets.
The study also asked consumers how knowledgeable they are about life insurance and found that 41% of those surveyed said they aren’t knowledgeable about it.
“Although that sounds like a slightly alarming percentage, it’s probably more like 41% really don’t know the ins and outs of life insurance,” Wood said. “And with all the different types of policies, the regulations and the riders — who understands the underwriting and mortality tables and all that?”
The survey also showed that 48% of women said they are not knowledgeable about life insurance, as opposed to 31% of men who said their knowledge about the product falls short.
Gen Zers were more likely than those of any other age group to overestimate the cost of life insurance — by a lot, Wood said. He attributed that finding to Gen Zers being more familiar with the cost of auto and home insurance, products whose premiums have skyrocketed in recent years.
The percentage of consumers who reported owning life insurance remained steady at 51%, Wood said, with much of that coverage coming from employer-sponsored life insurance.
Social media continues to influence the
life insurance purchasing decision, the study showed. Wood said 62% of all consumers and 80% of Gen Zers obtain information about life insurance from social media platforms such as TikTok as well as from podcasters.
While much of the news surrounding the life insurance market paints a picture of frustration and unfulfilled sales, the numbers are actually pretty strong. Just days before the conference kickoff, LIMRA released final 2024 data showing total new annualized premium increased 3% in 2024, to $15.9 billion.
It is the fourth consecutive year of record-high premium. However, the 2024 policy count was level with 2023 results, LIMRA found.
About 100 million Americans say they need life insurance, noted Bryan Hodgens, senior vice president and head of LIMRA Research, who discussed the results during a late-April LinkedIn Live event.
“There’s a huge demand out there for this product,” he said. “About a third of Americans say that they intend to buy life insurance every year. But historically, far fewer actually take action. Our 2024 results showed that just 9.4 million policies were sold in 2024 … and that’s pretty flat year over year.”
A new LIMRA-Bain study considers how the partnership between distribution and marketing can drive profitability and protect more families.
Life insurance-needy prospects who meet with an advisor end up buying in high numbers. But they tell LIMRA that education is crucial. Forty-eight percent of respondents “strongly agreed” that they “need to understand life insurance before they purchase” it, Hodgens said. Another 42% agreed.
“To me, that’s telling us that education is really important,” he said.
If they’re not getting information from a financial professional, LIMRA research shows that Americans are turning to social media. Sixty-two percent of all respondents are using social media for financial information, a figure that jumps to 80% with millennials and Generation Z.
“I think what’s interesting, though, is when you look at what they’re receiving,” Hodgens said. “There are a lot of influencers out there. There are a lot of people who
are just posting information, and there might be some misconceptions. There might be some confusion as to what [consumers are] learning.”
Here are some other important news topics that InsuranceNewsNet covered from New Orleans.
John Carroll is senior vice president and head of insurance and annuities at LIMRA and LOMA. He announced his retirement to colleagues during the Life and Retirement Conference.
Carroll, who had a long career at Merrill Lynch and Allianz Global Investors prior to joining LIMRA and LOMA, also sat down with InsuranceNewsNet for a lengthy video interview that can be viewed in three parts at insurancenewsnet.com.
A new joint study by LIMRA and the Society of Actuaries Research Institute finds improved mortality rates in the group life segment.
The 2024 Group Term Life Experience Study, released in December, collected data from insurers for group term life insurance policies in force from 2013 to 2021. Results were compared with the previous 2016 group term life study, which used a study period of 2010 to 2013.
Pete Miller, actuary, experience studies, with the Society of Actuaries, and Matt Sawyer, vice president at Gallagher Re, shared the study during the conference.
Group life is akin to individual life insurance and has a mortality rate about 30% to 40% lower than that of the U.S. population, Sawyer explained.
Sixteen companies contributed data to the study, which encompasses over 100 million exposures by headcount, over 186,000 life insurance claims and over 39,000 incidences of premium waiver from 2013 to 2021.
The A/E ratio compares the actual number of deaths (A) within a specific population or portfolio with the number of deaths expected (E) based on a defined mortality table. Key findings of the study include:
• Basic life A/E ratios compared with the 2016 study were 93% on a headcount
basis and 107% on an amount basis. Supplemental life A/E ratios compared to the 2016 study were 108% on a headcount basis and 114% with an amount basis.
• Excluding the pandemic years of 2020 and 2021, basic life A/E ratios were 88% on a headcount basis and 100% on an amount basis. Supplemental life A/E ratios were 102% on a headcount basis and 107% on an amount basis.
The topic of mortality rates is now heavily politicized, with many groups believing the COVID-19 vaccine contributed to elevated deaths that continue to be seen in some studies. The world’s top health experts have debunked those theories.
Still, troubling increases in certain ailments and diseases, along with rising health care costs, have worried some insurers and led to major losses in stoploss coverage for several companies. Self-funded employers rely on stop-loss insurance to mitigate the financial risk of large claims, but as medical expenses grow, insurers may face higher payouts, affecting their profitability.
Near the end of their 35-minute presentation, the actuaries were asked pointblank what the study concluded vis-a-vis mortality.
“So, it sounds like you have an improved mortality versus 2016 with or without COVID?”
“Yes,” Sawyer responded.
Annuity distribution is keeping up with demand, for the most part, but for how long?
The search for producers, potential disruption from in-plan annuities, and “irrational pricing” all are challenges to distribution channels. A panel of executive experts dissected those issues and more during the conference.
Insurance producers are an aging group and are not being replaced at a high enough rate. In simple terms, young people are not very interested in becoming insurance agents.
John Gies is head of MassMutual Financial Advisor brokerage sales at MassMutual. With a field force of 6,500 advisors that MassMutual hopes to grow to 8,000, Gies said the firm is stressing the positive and
important work of financial planning.
“We’ve invested a lot into educating our field force and our firm, our agencies, around what they need to do around succession planning,” he said. “Providing the tools, providing the resources, providing the programs that enable a smooth succession.”
That goes hand in hand with treating new recruits with respect. The days of throwing a phone book at a young new agent and telling them they need to generate $20,000 worth of commissions by the end of the year are over, Gies said.
“This concept of team, where you can come in on an experienced team, learn from advisors, learn as you go, I think is a new model for bringing the future generation of advisors into the business,” he added.
The free market premise is that competition will bring out the best values. That concept might not work as well when it comes to annuity rates, Gies said. In preparing for the LIMRA session, Gies said he asked a MassMutual annuity executive for a list of industry concerns. “Irrational pricing” was on the list.
In other words, some annuity sellers are offering ultra-attractive annuity rates just to get business. It’s a strategy that annuity sellers regretted in the past — notably, when a hot variable annuity market fueled a “living benefits arms race” in the 2006-08 time frame, Gies recalled. Many of those companies later regretted those guarantees.
More recently, PHL Variable Insurance Co. was placed in rehabilitation by a Connecticut court. Insurance Commissioner Andrew Mais expects to complete a rehabilitation plan for the financially troubled PHL Variable sometime this year.
“We’ve seen folks taking it up to the line, right in terms of what we’re offering out in the marketplace,” Gies said. “Leaning into that sales opportunity with responsible pricing is a mandate that we as an industry all carry.”
InsuranceNewsNet
Senior Editor John
Hilton 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 X @INNJohnH.
Reaching individuals aged 25-45 who are on track to become affluent later in their lives.
By Matthew Drinkwater
The individual annuity and retail retirement market centers on affluent investors who are retired or close to retirement. “Retirement investors” — workers and retirees aged 40 to 85 with at least $100,000 in household investable assets — control most of the nation’s wealth and make up the vast majority of individual annuity sales and individual retirement account rollovers.
While the financial services industry rightly concentrates on affluent retirement investors, another group warrants their attention. Emerging affluent investors are individuals aged 25-45 who are on track to become affluent later in their lives. They are not close to retirement, nor do they have enough wealth to qualify as “affluent,” yet they are critically important long-term prospects for the kinds of products and services the retirement industry offers. Moreover, each generation of Americans brings a distinctive perspective to financial issues based on their experiences during key life stages.
Future affluent investors may differ from current affluent investors in terms of outlook, preferences and priorities. By understanding emerging affluent investors now, financial professionals can build longterm relationships and trust, positioning themselves to help manage those investors wealth in the future.
One of the ways that younger generations could be unlike their elders is in their reliance on financial professionals for help with household investment and financial decisions. For the most part, emerging affluent investor clients closely resemble retirement investor clients in terms of their reasons for working with a financial professional. Yet the two groups
show significant differences in the value the place on the specific services that financial professionals provide to them.
Emerging affluent investors highly value fundamental services provided by their financial professional, such as offering guidance on difficult financial decisions and balancing risk and reward in their portfolios (see figure above). More specific services, such as those aimed at minimizing taxes or reducing portfolio volatility, were less commonly cited. Younger investors thus recognize they have less experience in selecting among financial choices or navigating tumultuous economic conditions, and they want their financial professional to offer their perspective and guidance even for basic decisions.
This pattern stands in contrast to the services most valued by retirement investors, who place relatively greater emphasis on principal protection and volatility reduction, as well as tax minimization. In addition, emerging affluent investors are more likely than their older counterparts to be discussing savings and debt reduction/elimination with their financial professional.
Younger investors represent the future of
the retirement industry. Establishing relationships with them early can yield longterm benefits for both clients and financial professionals. Our research shows that emerging affluent investors often look for professional guidance due to financial complexity, even before reaching common asset thresholds that have traditionally triggered advice seeking.
Providing financial education and services to younger people can help them make informed decisions, avoid debt and build a secure financial future. However, financial professionals cannot spend too much of their time educating clients about the basics of investments and financial decisions, and they need to be strategic about accommodating such demands given their time constraints and their firm’s business models. Finding the right balance between providing these highly valued services to their younger clients and time management will be critically important.
Matthew Drinkwater, PhD, leads LIMRA’s annuity and retirement income primary research program. Contact him at matthew.drinkwater@ innfeedback.com.
Women are a force across every level of this profession. But the journey isn’t over.
By Bonnie Godsman
Walk into any major financial services event today, and you’re likely to see a growing number of women not only participating but leading. As a woman who has worked in this profession for more than 25 years, I can tell you this shift hasn’t happened by accident. It’s the result of decades of resilience, intentional change and a deep belief in the power of inclusive leadership.
At Finseca, we’re not just observing this transformation — we’re driving it. Through advocacy, education and leadership development, we’re opening more doors for women across the financial security profession. And the results speak for themselves. Finseca now boasts the most diverse board of directors among all of our peer organizations. That’s not just a point of pride — it’s a signal of progress.
To understand where we are today, it helps to look back at the journey that brought us here.
In the 1970s, trailblazing women broke barriers that had long limited access to financial independence. The Equal Credit Opportunity Act of 1974 was a game changer, giving women the right to obtain credit on their own — no husband or father required. This was more than policy; it was a cultural shift that allowed women to begin building wealth and security in ways that had previously been off-limits.
By the 1980s, more women were pursuing degrees in finance-related fields, entering the profession with both knowledge and ambition. They weren’t just filling seats — they were earning trust and delivering
Bonnie Godsman is the president of Finseca and the Finseca Foundation. Contact her at bonnie.godsman@ innfeedback.com. Finseca
value, helping reshape how financial advice was delivered and received.
The 1990s marked a surge of women climbing the professional ladder. While many still held support roles, the tide began to turn. Recruiters started to recognize the power of emotional intelligence as an asset, and women’s natural ability to connect with clients became a competitive advantage.
In the early 2000s, women began to step decisively into leadership roles. Their voices were increasingly heard in boardrooms, management teams and strategy sessions. They weren’t just participants — they were decision-makers, reshaping the culture of firms and proving that diverse leadership drives better outcomes.
And now? Women are a force across every level of this profession. But the journey isn’t over. Barriers still exist, and the climb is far from easy. That’s why communities like Finseca’s Women’s Community matter. They provide support, amplify voices and ensure that the next generation of women climbs higher, faster and with more support than ever before.
But this isn’t just a story about gender equity — it’s also a business imperative. By 2030, women will control more than $30
trillion in assets in the U.S. alone. They are not only shaping the profession — they are redefining the marketplace. Advisors and firms that understand how to connect with, serve and empower female clients will be the ones that win the future.
So yes, this is a celebration. But it’s also a call to action.
If you’re not already a part of Finseca’s Women’s Community, join us. If you’re not yet engaged in the broader Finseca movement, now is the time. We’re building something bigger than any one organization — we’re creating a unified profession focused on delivering financial security for a ll.
This is more than history in the making. It’s the future. And we need everyone — women, men, allies, mentors, rising stars — to be a part of it.
Because when we move forward together, there’s no limit to what we can build.
Because no two business owners are alike, what will work in one employer’s retirement plan offering may not work for another’s.
By Ernest Guerriero
As of the writing of this column, there are 14 states that have enacted legislation requiring certain employers to offer a retirement savings plan to their employees. These are plans for employers that currently do not offer an employer-sponsored retirement plan to their employees. Generally, the legislation in the states requires employers of five or more employees to offer a plan. These plans are basic and mirror individual retirement accounts with no employer match, no employer discretionary contributions and no flexibility to allocate higher contributions for a select group of employees, such as owners, key employees, etc.
For many business owners today, retirement planning is something they believe is important for both their own and their employees’ financial future. Retirement planning enables individuals to set goals for their retirement income and then develop and implement a plan to help them achieve those goals.
When it comes to the business owner’s own retirement planning, business owners often have several common objectives — and these often inform how they design their retirement plan offerings. These objectives may include asset protection and accumulation as well as estate preservation. Achieving tax savings is also a critical consideration for many. Because no two business owners are alike, what will work in one employer’s retirement plan offering may not work for another’s. It all comes down to the business owner’s specific goals, objectives and budget.
Qualified plans are designed to accumulate assets for retirement. The two main types of qualified retirement plans are defined-benefit plans and defined-contribution plans.
A defined-benefit plan promises a specified monthly benefit at retirement. With this type of plan, the company funds and pays its obligations for each of its participating employees.
A defined-contribution plan does not promise a set monthly benefit at retirement. Instead, the employee and/or employer contribute to the employee’s account within the plan. The contributions are invested on the employee’s (i.e., participant’s) behalf, and the participant ultimately receives the balance in the account.
The most common type of defined-contribution plan is the profit-sharing 401(k) plan, which allows an employee to save some of their wages for retirement and have the savings invested while deferring income tax on contributions and
earnings until withdrawal. It also allows the employer to make matching and/or discretionary contributions to the employees’ accounts.
In addition to the benefit or cash available at retirement, access to retirement funds is one of the main differences between the two plan types. With a defined-contribution plan, the employee may not have access to their funds until the employee leaves the employer, the employee dies or becomes disabled, the employer terminates the plan, the employee reaches age 59½ or the employee suffers financial hardship. Depending on the plan design, defined-contribution plan participants may be able to borrow money from their account by taking out a plan loan.
With a defined-benefit plan, a participating employee does not typically have access to any plan funds, except to receive retirement benefits at the date specified under the plan. These are most commonly paid out as a lump sum.
Another primary difference is how these two types of plans are funded: Employers are responsible for funding defined-benefit plans, whereas employees primarily fund defined-contribution plans.
While business owners often use cash flow to finance their retirement plan offerings, a qualified retirement plan may incorporate life insurance on the lives of the plan’s participants to help fund the plan and to provide immediate financial protection. This can be an excellent way for business owners to save money, while protecting their loved ones and assets, using pretax dollars.
There are many reasons to consider life insurance in a qualified plan, such as:
» Premiums are tax-deductible inside the tax-exempt trust.
» Life insurance proceeds pass to a beneficiary income-free to the extent they exceed the policy’s cash surrender value.
» Policy proceeds pass estate-tax-free when paid to the spouse.
» The plan is self-completing: If the individual insured under the policy dies before retirement, the life insurance policy will provide all, or substantially all, the monies that would have been available at retirement.
» Asset protection: The assets in an ERISA plan are protected from the claims of judgment creditors. This extends to the life insurance policy.
» Portability: The participant can take the policy with them at retirement.
» In defined-benefit plans, the guaranteed cash value in permanent whole life insurance is used as part of the fixed income portion of the portfolio. This offers the money manager assurance of one portion of the portfolio and the remainder will be adjusted accordingly.
Offering an attractive retirement plan is one way that today’s employers compete for top talent. But because retirement planning is a complex topic, the employer-sponsored plan may be tailored to the specific needs of the employer and the owner(s).
Ernest J. Guerriero, CLU, ChFC, CEBS, CPCU, CPC, CMS, AIF, RICP, CPFA, is the past national president of the Society of Financial Service Professionals and currently a board trustee for the National Association of Insurance and Financial Advisors. He is the head of business sponsored retirement plans for Guardian Life. Contact him at ernest. guerriero@innfeedback.com.
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By Kevin Mayeux
Congress is moving forward with tax reform legislation, and one proposal under consideration could have far-reaching and unintended consequences for the insurance industry and, more importantly, for the consumers it serves.
Lawmakers are considering placing a cap on the corporate state and local tax (C-SALT) deduction — a move that, while perhaps aimed at increasing revenue, threatens to raise the cost of vital financial protection products for American families. NAIFA strongly opposes this proposal, recognizing the significant economic ripple effect it would have across the insurance and financial services industries.
At its core, the C-SALT deduction is not a loophole or a special interest provision; it is a long-standing and legitimate recognition of business expenses. Just as businesses are permitted to deduct costs related to labor, materials and rent, they also deduct the taxes they are obligated to pay to state and local governments. These are real, unavoidable costs of doing business. Removing or limiting this deduction would, in effect, result in taxing businesses on income they do not have.
This issue becomes particularly important for insurance companies, which already bear a unique tax structure. In addition to paying standard business taxes such as income, property, sales and unemployment taxes, insurers are also required to pay premium taxes based on revenue rather than profit. These taxes apply regardless of a company’s profits in a given year, making them especially inflexible. A cap on the C-SALT deduction would prevent companies from fully deducting these mandatory state taxes, significantly increasing their federal tax liability.
Some producers may be inclined to think that this is a burden for insurance companies to bear and not one that will significantly affect their business. Unfortunately, the elimination or reduction of the C-SALT deduction would almost certainly have a significant impact on the ability of financial professionals to provide cost-effective solutions to consumers.
The cost of this tax increase inevitably would be passed on to consumers through higher premiums and more expensive financial products. A limitation on the C-SALT deduction would function as a hidden tax on all forms of insurance, including life insurance, annuities and other financial protection products that are essential for long-term financial planning. For consumers already navigating inflation and economic uncertainty, any increase in cost could deter them from obtaining the protection they need.
Beyond its impact on consumers, capping the C-SALT deduction would also negatively affect the broader economy. According to analysis by the Tax Foundation, such a cap could effectively raise corporate tax rates by 3% to 5%. This would reduce U.S. gross domestic product by up to 0.2% and lead to the elimination of about 46,000 jobs. These are tangible consequences that should give lawmakers pause.
It is also important to address several common misconceptions that have surrounded this debate. Some have suggested that limiting the deduction would encourage states to lower their tax rates to attract business, but this is a flawed argument. Most corporate taxes are not determined by where a company is located but by where it does business. As a result, corporations cannot easily avoid state taxes by relocating, and a C-SALT deduction cap would do little to change how states set their tax policies.
Financial professionals have a say NAIFA recognizes the urgent need for our industry to speak out against this proposal. That is why we mobilized our members to attend the 2025 Congressional Conference in May in Washington, D.C. This event provided a critical opportunity for financial professionals to meet directly with lawmakers, share real-world perspectives and advocate for sound policy that supports both businesses and consumers.
Financial professionals are in the business of preparing clients for life’s uncertainties. It is important that the tools you offer remain affordable and accessible. Capping the C-SALT deduction undermines that mission and places an unfair burden on families seeking financial security.
Congress must consider the broader implications of this policy. Tax reform should aim to promote economic growth, not stifle it. It should support working families, not increase their financial burdens. NAIFA urges lawmakers to reject any proposal that caps the corporate SALT deduction and to prioritize policies that preserve affordability and stability in the insurance marketplace.
Kevin Mayeux is NAIFA’s CEO. Contact him at kevin.mayeux@ innfeedback.com.
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