Life insurance is generally sold, not bought, and those sales traditionally take place around the dinner table or in the agent's office.
That traditional scene was next to impossible this year as COVID-19 swept across the country and led to business restrictions and stay-home advisories. On the other hand, it reminded Americans of the value of planning and life insurance.
In short, it was an interesting and challenging year to be an insurance agent. InsuranceNewsNet's top five stories of the year reflected the ongoing struggle to navigate the new pandemic reality.
Judge Orders Feds To Pay Up After Insurer Goes Belly-Up
This January story highlighted the difficulties with structured annuities after a federal appeals court ordered the United States to make good on an annuity the former Executive Life Insurance Company of New York (ELNY) was paying to a burn victim.
The U.S. Court of Appeals for the Federal Circuit ruling overturned a lower court decision in favor of the government in the lawsuit brought by the family of Trevor Langkamp.
The decision called attention to the security of long-term annuity promises when an insurance company goes out of business. ELNY was liquidated in August 2013 by the New York superintendent of financial services.
Trevor Langkamp was 17 months old when he suffered severe burns at a property owned by the Department of Army in April 1980. In 1982, Joseph P. and Christina Sue Langkamp, Trevor's parents, filed a complaint under the Federal Tort Claims Act, alleging that the accident was caused by negligent maintenance of the property.
American College CEO Opens Up About Black Life In A White World
This year also revealed the simmering race issues that America continues to struggle with daily. Insurers took a strong pro-diversity stance following the May 25 death of George Floyd while in police custody.
George Nichols, president of The American College of Financial Services, and the leaders of other key life insurance organizations signed a letter pledging to work together against racial inequality. It was signed by the leaders of the American Council of Life Insurers, the Association for Advanced Life Underwriting, the National Association of Insurance and Financial Advisors, and LIMRA, LOMA and LL Global.
The letter is one of many public statements issued on the issue. But what can organizations, companies and individuals in life insurance do?
“I think that where a lot of organizations commit dollars, which I'm so grateful for, in investing in the black community, I'd really like to see not just the gift, but the commitment,” Nichols told InsuranceNewsNet in this story about his personal experiences as a Black man in the life insurance industry.
New York Requires Insurers To Delay Collecting Premium
In this late-March story, New York required insurers to delay collecting premium on life insurance and annuity contracts written in the state for 90 days under an emergency regulation.
The directive covered consumers experiencing financial hardship due to the COVID-19 pandemic, the New York Department of Financial Services said in a news release.
Consumers and small businesses experiencing hardship were permitted to defer paying premiums for property and casualty insurance for 60 days. Premium finance agencies were required to provide the same relief as insurers.
“Government and industry must continue to work together to help those who are suffering financially due to the COVID-19 pandemic,” said DFS Superintendent Linda A. Lacewell.
12 Ideas For Advisors To Thrive Despite COVID-19
Notable speaker Tom Hegna provided agents with crucial advice in this March story.
Advisors can choose not to participate in the negativity stemming from the COVID-19 pandemic, Hegna told members of the National Association of Insurance and Financial Advisors.
Hegna, who is retirement income expert, author and speaker, gave a rundown of ways advisors can find opportunities in the current environment. He spoke to NAIFA members at an online Town Hall Meeting.
He presented a list of 12 ideas for advisors to thrive, not just survive, while COVID-19 forces millions of Americans to stay home and the stock market takes investors for a wild ride.
Accelerated Underwriting Could Close The Life Insurance Gap
Accelerated underwriting holds the promise of being able to cut the agent's time spent selling a $500,000 policy from 20 hours to roughly five, a Deloitte analyst said in this January story.
The associated benefits from that are numerous. In particular, it could lead to more life insurance sold to Americans who need smaller amounts for basic protection.
Chris Stehno, managing director, human capital practice, at Deloitte, shared data and analysis on new underwriting technology for the National Association of Insurance Commissioners; Accelerated Underwriting Working Group. The benefits offered by accelerated underwriting have the potential to revolutionize the life insurance industry.
"Right now, agents aren't selling below a million dollars," Stehno said. "It's not they don't want to, but for the most part, they're not too interested in it. What accelerated underwriting does is say, 'Hey, for a portion of those people, the young and healthy, I'm interested in selling to them again.'"
Annual Milliman surveys show a steadily increasing shift to accelerated underwriting. For example, Milliman found that 24.6% of indexed universal life sales were made with accelerated underwriting for the fiscal year ending Sept. 30, 2018. That figure is up from 16.8% during the fiscal year 2017.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.
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