Question: What is the top industry issue impacting your life insurance practice this year and why?
“The issue is more regulation -- in particular, proposals impacting the suitability standard of care, which applies to insurance products, and the fiduciary standard, which applies to financial planners. Our job in insurance is to solve customer problems from the platform we have available and in a way that is suitable for the situation. The financial planner, operating under the fiduciary standard, may provide a recommendation to buy life insurance as being in the customer’s best interests. But the customer will need to do that through an insurance agent, who operates under the suitability standard. The problem is that the regulators are trying to tie the fiduciary standard to charging a fee. If they had not done that, there would not be a problem, because the two standards are very similar. A lot of the time, the commission is less costly for the client than a fee, and that’s especially important for customers in the low to middle-income markets.”
--David A. Beaty, CLU, Heartland Financial Service, Cedar Falls, Iowa
--Curtis V, Cloke, CLTC, LUTCF, Thrive Income Distribution System, Burlington, Iowa
“In the last two years, the baby boomers have been like a dam breaking. They suddenly realize they need long-term care insurance. They’re discovering what we in the industry have known for years — the hideous expense, the extensive personal sacrifice, the family and personal stresses associated with long-term care. In many cases it is too late to get insurance for their parents, so the boomers are saying, ‘Oh my goodness, maybe I should get long-term care insurance for myself.’ Between 2002 and 2012, I wrote very few long-term care policies. Then suddenly, two years ago, it’s been one after the other. I didn’t do any special marketing around it; I did bring it up in meetings, though. Before, they didn’t want to talk about it but now they do — because of what is happening to their parents or to someone they know. Unfortunately, although some do get accepted, others are declined, so it’s too late for them. In that sense, it’s the same old insurance story: When people realize they want it, there is only a 50/50 chance that they will get it.”
—William A. Magnusson, CLU, MBA, CFP, Berkshire Advisor Resource, Greenwood Village, Colo.
“For me personally, one of the biggest problems is the poor information about life insurance that’s out there. It’s wrong, incorrect, stretching the truth or one-sided. This is a problem because the younger population turns to the Web to learn everything, but the Web blogs make these people seem like experts, and the people take what they say hook, line and sinker. In one way, it’s a temporary problem because once I get them in front of me, they are all there, and I have no trouble explaining how life insurance works, the need to be qualified, underwritten and so on. But the wrong information they get makes it difficult to get appointments. They will say they want to do it on the phone or over the Internet. They think it’s a 15-minute process. My perception is that they think buying life insurance is like buying something at the store, like a commodity. This problem has been getting progressively worse over the past three to five years.”
—Brett M. Sause, LUTCF, FRC, New York Life, Stevensville, Md.
“My biggest issue is people’s misperception about what financial advisors do. They perceive an advisor to be transactional. In addition, they are very emotional about their financial position, so they are reluctant to let the advisor in. In fact, when I became a financial advisor, my parents said I would rip people off. This misperception problem has been a constant issue and it makes getting in front of the clients more difficult. When I got into MDRT, though, I learned who I was and how I make a difference. It’s not a money job, and it’s not transactional. So now, when I encounter the misperceptions, I think, if those people would only have that initial cup of coffee with me, I can blend my factual knowledge with the compassion that MDRT taught me and mix it with the emotions of the people to come up with the solution. When they see the impact that the solution can have on their family and loved ones, I’ve done a good job.”
—Elaine Milne, St. James Placer, Dundee, Scotland