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The Establishing Shot That Gives Clients Perspective

David J. Murphy
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The Establishing Shot That Gives Clients Perspective

“Look, all I’m asking is for you to just have the tiniest bit of vision. You know, to just sit back for one minute and look at the big picture.”*

On July 11, 1997, Warner Bros released the movie Contact. The film opened with a scale view shot of the entire universe, beginning with a view of Earth from high in the atmosphere. The camera started zooming backward, first passing the Moon, then Mars, asteroids and other features of our solar system, then into interstellar space, through the Milky Way, and receded through other galaxies into deep space. While the scene pulled the viewer further and further from earth the movie-goer heard sounds of pop songs, TV show themes and famous speeches carried by radio waves of broadcast programming emitting from earth. The music and news broadcasts began with the present and retreated into the past.

This opening scale pan of Contact broke the record for the longest unbroken shot comprised entirely of computer-generated visual effects. Movie critics continue to hail this sequence as one of the best examples of what the movie industry calls the “Establishing Shot.” People sat in the theaters transfixed and silent for the full three minutes that the opening scene lasted. View the Establishing Shot from Contact here

The Establishing Shot
According to MediaCollege.com, “Establishing Shot” is defined as “the first shot of a new scene, designed to show the audience where the action is taking place. It is usually a very wide shot or extreme wide shot.”**

The Establishing Shot provides context and overview.

The most memorable Establishing Shots are often visually iconic or technically intricate and complex. The goal is to provide viewers with information about the story’s setting, time frame and perspective.

Clients Often Lack Perspective

“Everywhere is walking distance if you have the time.”—Steven Wright

The nature of humans is to self-deceive. “I have time enough.” “That won’t be a problem.” “Somehow it will all work out.” These can all be true statements—eventually. To face the facts, to embrace reality, requires courage. Or… assistance.

The role of the independent financial professional is to create the Establishing Shot for each client. Someone must show clients where they are in time and in life. Someone needs to give context, create urgency and drive decision-making. There is no better time than at the end of one year and the beginning of the next.

If you are an independent financial professional, I urge you to begin thinking of yourself as the “Big Picture” advisor. It is easy for clients to think too confidently, or, conversely, to lose hope. It is often the case that the clients find financial matters altogether confusing and decide that doing nothing is therefore the best strategy for now. We all know that procrastination never leads to success.

Impact of the Big Picture Advisor
For clients to properly think about problems they need to know how all the pieces fit together. Just like in the movies, where a well-done Establishing Shot can create context, you, as a Big Picture advisor, can help your clients to:

  • Know not just how and what to do, but to know why.
  • View the whole and not just its parts.
  • See a vision and gain a sense of the bigger picture.
  • Appreciate the full context of any situation.
  • Have the ability to see beyond the obvious.
  • Accurately assess the true consequence of putting off decisions.
  • Avoid great swings of mood and emotion they go through when their desires and expectations are not met.
  • Not be swept away by feelings that are based on an incomplete piece of the picture.
  • Respond to the underlying conditions that have given rise to the problems they face, rather than simply reacting to the symptoms generated by those problems.
  • Respond with patience gained by seeing with a broader perspective.
  • Grow in confidence by establishing plans more likely to bring about the long term wellbeing that they desire.
  • Understand that it is possible to create a legacy that will live on, whether in wealth or in the impact made on other people.

Your Job If You Choose to Accept It
The independent financial professional who desires to serve as the Big Picture advisor must know how to create the Establishing Shot for clients. Say for example that you will be meeting with a client at 2:00 pm tomorrow afternoon. You have allocated 60 minutes for the appointment. As Big Picture advisor you need to begin setting the scene. In the opening five minutes you need to pre-lap. In screenwriting, “Dialogue spoken over an establishing shot leading into the scene is called a ‘pre-lap.’”***

Pre-lapping is when dialogue begins before the director cuts to the scene in which the dialogue will be spoken.

This is what you might say to your client and what your pre-lapping might look like:

  • You are someone who desires to have a more successful financial life.
  • You have an open mind and are willing to creatively brainstorm and engage in a constructive dialogue about the goals that drive your life values.
  • You understand that there are many alternatives and are open to exploring an array of choices.
  • You are willing to make changes in behavior if doing so will serve your long term goals.
  • You are open to viewing me as your Big Picture advisor for your financial life.
  • You recognize that I don’t have all the answers, and that financial planning is not an exact science.
  • You are willing to commit to providing me with applicable financial information and to respond to requests for information in a timely manner.
  • You recognize that big goals can be achieved by making small changes consistently over time.

Through these table-setting comments, you establish the context of the dialogue about to take place and provide an apt description of the work you do on behalf of your clients.

Summary
Serving as the Big Picture advisor:

  • Allows you to lead your clients in prudent decision-making.
  • Enables you to keep your clients on track.
  • Avails you the opportunity to help your clients see what others are doing successfully.
  • Elevates you to the position of quarterback who can create teamwork among all the client’s advisors.
  • Keeps your clients from stagnation and from wasting valuable years.
  • Positions you to help clients find lessons in every experience, good or bad.
  • Equips you with the ability to share insights from many different people.
  • You can open your client’s eyes to an expanded world.

In Contact an alien (played by David Morse) says this about human beings:
“You’re an interesting species. An interesting mix. You’re capable of such beautiful dreams, and such horrible nightmares. You feel so lost, so cut off, so alone, only you’re not. See, in all our searching, the only thing we’ve found that makes the emptiness bearable, is each other.”****

Bottom line: people truly need a Big Picture advisor. Are you taking new clients?

References:

* Line spoken by Jodie Foster as Dr. Eleanor “Ellie” Ann Arroway in “Contact”
**https://www.mediacollege.com/video/shots/establishing.html
***https://screenwriting.io/what-is-an-establishing-shot/
****https://www.moviequotes.com/s-movie/contact/

Amalgamated Life

Broker World
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Amalgamated Life

Amalgamated Life Insurance Company, a leading provider of comprehensive insurance solutions, announced the appointment of Ray Moore as sales executive, Voluntary Worksite Products. Moore will be marketing Amalgamated Life’s voluntary worksite products across the U.S. Southern Region. He brings over two decades of senior level, specialized sales experienced in employee benefits and a proven track record in driving substantial revenue growth within the financial and insurance industry. His broad skills, which range from value-based selling, market trend analysis and contract negotiations to account management, team management and development, proposals and presentations, will be instrumental in his new role.

Prior to joining Amalgamated Life, Moore served as vice president, Field Operations and Sales at Employee Benefits Systems, Inc. (Houston, TX), where he managed the full scope of lead generation, client relations, and effectively driving new business development. As part of his sales leadership, he routinely made high-level presentations before large corporations and monitored all product training to assure a strong sales focus.

Moore’s career also included roles as regional vice president at Transamerica Worksite Marketing (Raleigh, NC), where he managed operations, served as the liaison between field and administrative staff, and established and maintained broker relationships. He also served as director, Employee Benefits with FinCor Solutions, Inc. (East Lansing, MI) and assistant vice president, Sales and Marketing with Bankers Security Life (Arlington, VA).

Moore’s advanced education includes Business Management and Marketing studies at Texas Christian University (TCU). He is ACA Certified from the National Association of Health Underwriters (NAHU).

Amalgamated also announced that Bruce Van Ryn has joined the company as a sales executive, Voluntary Worksite Products. Van Ryn will be marketing Amalgamated Life’s voluntary worksite products in MI, IN, WI, MN, SD and ND. A results-driven executive, Van Ryn brings over 25 years of senior level experience in insurance and benefit sales, as well as an entrepreneurial background having led his own marketing firm specializing in sales lead generation.

Van Ryn most recently served as a senior benefits consultant with Grand Companies (Grandville, MI), where he provided consultation, enrollment and employee benefits solutions to brokers and clients. While there, he leveraged technology, communications and on-site support to effectively address enrollment challenges. He also conducted various educational presentations to brokers, employers and employees to convey the financial security and peace of mind that cost-effective insurance products provide.

Van Ryn also served as district sales coordinator with AFLAC (Columbus, GA), where his accomplishments included achieving annual sales quotas and Leadership Conference sales goals and writing the most new policies in the Michigan District in 2015. Additionally, his career included his role as district general agent for Colonial Life & Accident Company (Columbia, SC). As President and CEO of Van Ryn Associates, Inc. (Grandville, MI), a marketing firm he founded, he helped manufacturers in the marketing and sales of their products through nationwide distribution networks.

Van Ryn holds a Bachelor of Arts, Business Administration from Calvin College.

Further, Amalgamated announced the appointment of Howard Gertner as sales executive, Voluntary Worksite Products. Gertner, will be marketing Amalgamated Life’s voluntary worksite products in CO, NV, UT, MT, WY, NE, ID, MO and AZ. He brings a proven track record spanning almost three decades in voluntary worksite, insurance and related offerings. His achievements on behalf of former employers include successfully building market share in underperforming territories, and increasing sales of worksite and voluntary product through direct sales to employers and broker distribution channels.

Directly prior to joining Amalgamated Life, Gertner served as vice president of Sales at United Group Programs (Denver, CO), where he built powerful relationships with brokers, consultants and national strategic partners to sell the company’s medical benefits programs, coverage plans and worksite ancillary programs. Other recent positions held by Gertner include his roles as sales representative with Reliance Standard Life Insurance (Denver, CO), where he implemented open enrollment meetings that consistently achieved 90 percent enrollment numbers, and agency development manager with Colonial Life & Accident (Sunrise, FL), where his responsibilities included building and strengthening broker relationships, as well as overseeing 10-15 sales agents and driving their sales success. In addition to these positions, Gertner has held several other sales executive and management roles with various insurers and health plans

Gertner holds an Associates of Arts and Sciences in Zoology from Santa Fe College.

Founded in 1943, Amalgamated Life Insurance Company has since grown into a leading provider of comprehensive insurance solutions operating in all 50 states and the District of Columbia. The company provides competitive group products including term life, medical stop loss, disability and specialty drug cost management, as well as voluntary products such as accident, accidental death and dismemberment, critical illness, dental, disability, hearing, ID theft, legal, portable term life and whole life, among others. Since 1975, Amalgamated Life Insurance Company has consistently earned the “A” (Excellent) Rating from A.M. Best Company attesting to its strong fiscal position. The Company is a member of the Amalgamated Family of Companies which also includes: AliCare, a third-party administrator; AliCare Medical Management, a medical care management firm; AliGraphics, a full-service printing and graphics firm; and Amalgamated Agency, a property and casualty brokerage. For more information, visit: www.amalgamatedlife.com.

Housing Solutions For Special Needs Families

Daniel J. Mullen
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Housing Solutions For Special Needs Families

When I first watched the movie Rain Man in the late eighties, I remember the scene of Tom Cruise driving through the gates of Walbrook Institute, past the manicured grounds and up to the large brick building to see a brother he had never met. Walbrook was an institution for individuals with intellectual disabilities and while I was in fact watching a Hollywood movie, Walbrook Institute is most likely what much of the public could relate to when talking about housing for individuals with special needs. While many of us can relate to the movie Rain Man in some way, fast forward thirty plus years and one thing is for certain: Housing options for individuals with special needs is still a major concern for parents, primarily due to the cost and limited options available.

In today’s environment, advisors like myself advocate that all of our clients implement a comprehensive plan for their retirement years based on their lifestyle and their wishes. We cover a lot of different topics that everyone should address with their own advisor, including contributions to retirement accounts, subsequent withdrawals from those accounts, when and how to file for social security, income protection, asset protection and legacy planning. When an individual or family has a child with special needs, an additional area of planning is required and typically should include a housing plan for the child when the parents or other family members are no longer able to care for them.

The facts support the need to implement a plan for a special needs child as early as possible. According to the National Down Syndrome Society (NDSS), approximately 1 in 700 babies born today will have down syndrome. NDSS also states that a child born with a cognitive disability in 1983 had a life expectancy of 25 years. Today, that life expectancy has increased dramatically to 60 years. More important, the facts go on to say that quality educational programs, a stimulating home environment, good health care, and positive support from family, friends, and the community enable people with Down syndrome to lead fulfilling and productive lives.1 According to the CDC, approximately 1 in 59 children will be identified with Autism Spectrum Disorder (ASD).2 A 2014 Study published by JAMA Pediatrics found that an individual in the United States with ASD who lives to age 67 will experience a lifetime cost of care of $2.4 million. The study also noted that during adulthood, residential care or a supportive living arrangement contributed the highest costs to that number.3 This reinforces a need to address future living arrangements when planning for your special needs child.

If you are caring for a child with special needs, housing is just one of the areas that needs to be addressed and should be completed with a qualified attorney that can help you with drafting the proper documents. According to Megan Selvey Esq., a special needs planning attorney with Bivens & Associates in Scottsdale, AZ, “Often when meeting with families to discuss planning for their special needs loved one, a main point of concern is how to pay for costs of living. A properly drafted special needs trust is a valuable planning tool. The funds of a special needs trust may be used to pay for, or supplement, costs of living for the trust beneficiary, above and beyond what a public benefits program may otherwise cover. This may include rent payments, or the purchase of a more permanent residence.” Selvey also states, “If a person receives Supplemental Security Income (SSI) or Medicaid benefits, it is important to discuss with a special needs planning attorney how distributions from a trust for costs of living may affect those public benefits. Distributions for housing or cost of living may have an effect on those public benefits.” Selvey’s statements reiterate the need for a plan to be put in place for the individual with special needs to ensure they receive the proper level of care, their benefits will be protected, and they can live a fulfilling life in a comfortable and safe environment. While each state may be different, these are some of the most common housing options available when the child becomes an adult.

Continuing to Live with Parents or Caregivers: This is the most common living situation seen. While there are benefits to continue to live with the people that know your needs best, what happens when they are no longer able to care for the individual appropriately or if the parents pass away at an early age? Most likely, the longer that the individual lives in the same surroundings the more difficult the transition will be when they are required to move to a new living arrangement.

Group Homes: These options vary depending on where you live. It may be difficult to find availability or there may be a wait list. The home may be far from the parents and/or family’s primary residences. However, they can provide social interaction for the individual as well as limited support for the residents to live semi-independently. Cost of group homes range anywhere from $1,500-$5,000 per month, depending on the location and type of home.

Nursing Homes: When an individual requires 24-hour medical care with ongoing supervision, this may be the best option. According to the 2018 Cost of Care Study by Genworth, the annual median cost of care for a private room in a nursing home is in excess of $100,000 per year.4 Depending on your assets, Medicaid may be an option to help cover the cost of this type of care.

Permanent Residency: This option has been around for a long time with families sometimes pooling their resources to purchase an additional home. Other options, like Luna Azul in Phoenix, AZ, offer a new community of 30 privately owned homes with a clubhouse and a 24-hour staff for adults with specialized needs. They are then able to access resources such as Phoenix carpet cleaning to help keep the homes clean and healthy for residents, This new concept allows individuals to live independently in a community with other residents that have specialized needs as well. The community also permits the owner to rent out their additional rooms to others who may not have the ability to purchase a home.5

In summary, implementing a proper plan for your loved ones with special needs is more important now than ever before. As Baby Boomers continue to live longer and often require long term care themselves, so do individuals with special needs. Advancements in medicine contribute to the longer life expectancy and health care costs continue to rise. Housing costs continue to increase, and there is a shortage of quality options for individuals with special needs. If applicable, government benefits can be an extremely difficult landscape to navigate. Cost and time are often barriers for families to start the planning process. If your clients haven’t explored their options yet, urge them to reach out to their attorney, a ChSNC, financial advisor, and tax professional to address their individual situation. Creating a plan sooner rather than later and reviewing that plan often, rather than never, will help provide peace of mind for your clients and their families.

Dan Mullen is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC OSJ address 17550 N Perimeter Dr. Ste 450 Scottsdale, AZ 85255 480-538-2900. DFG Advisors is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies. The views expressed here are those of Dan Mullen. Dan Mullen’s views are not necessarily those of MML Investors Services LLC. or its affiliates and should not be construed as investment advice. They are subject to change. CRN202011-255718

References:
1. https://www.ndss.org/about-down-syndrome/down-syndrome-facts/
2. https://www.cdc.gov/ncbddd/autism/data.html
3. https://jamanetwork.com/journals/jamapediatrics/fullarticle/1879723
4. https://www.prnewswire.com/news-releases/genworths-15th-annual-cost-of-care-survey-shows-continuing-rise-in-long-term-care-costs-300730947.html
5. https://www.lunaphx.com/

Get Ready To Take On Your Client’s Data And Technology Questions

Scott Tickner
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Get Ready To Take On Your Client’s Data And Technology Questions

Far too often I see employers struggling with HR and benefits technology systems. Too many of them aren’t set to accommodate the way that today’s employees, benefit and tech providers operate. The employers aren’t to blame, nor are their broker partners. These systems are a result of myriad factors culminating over several years. But, while brokers aren’t to blame for many of the benefit technology challenges employers are facing, more and more they’re being asked to fix them.

So how did we get here? Every year new systems are coming out with new features and new ways to manage the data in those systems. These systems can serve all kinds of functions: Benefits enrollment, benefits administration, payroll management, time off requests and performance management, just to name a few. On top of that, you can have multiple third parties (carriers, payroll systems, etc.) that need to access data in these systems. And, even further, an employee can make changes by contacting HR, by going into some of these systems and making changes, or by contacting a carrier directly.
You can have a variety of technologies, serving a variety of functions, to a variety of users, with a variety of ways that data can be modified. It’s easy to see how it’s become such a challenge to manage.

These employers are looking for simplicity in a complex world. That’s why so many brokers are getting asked questions about technology. Technology is supposed to make our lives simpler, but with the different systems employers are using, achieving that simplicity has become a challenge.

You don’t have to become a technology whiz to succeed in our increasingly technology-reliant industry, but you do have to know enough to be dangerous. If you did want to become ultra-educated on the subject of technology and really enhance your knowledge, you could take the comptia it fundamentals exam. Aside from that, below are helpful tactics I’ve found that will make the technology conversation easier when meeting with employers and their HR staffs.

Know your goals-One of the most important things you can do when setting out is clearly establish your goals. You’re probably going to encounter more systems and solutions than you can keep track of, so make sure you’re well aware of what it is that you want to accomplish for your employer when setting out and don’t lose sight of that goal. It’s easy to get lured by fancy technology that doesn’t really fill a need or doesn’t fit what you set out to do.

Understand the key players-There are solutions that are cropping up to try and handle the data confusion, so you need to at least be familiar with some of the key options. Some are looking to all-in-one solutions that handle a wide variety of HR functions. These can be challenging, however, because it’s hard for any one system to be all things to all people. Another promising solution is API (Application Programming Interface) which is a more easily-configurable technology solution allowing different systems to pass data back and forth in real time.

Ask lots of questions of technology providers-Not all of these solutions are the same. Especially when it comes to API technology, you can run into a variety of providers claiming to offer API, but they’re offering a one-way solution or a solution that may not be passing data back and forth between systems in real-time. Vet your options thoroughly and make sure what you think you’re getting is what you’re actually getting. That starts with asking lots of questions about the technology providers before you bring them to clients as a solution. Once you have received your technology, perform some api testing tricks on it to ensure it’s working efficiently.

Seek flexibility-To the point made earlier about the difficulty of any one tool being the solution to all people-you need to seek flexibility. Either with an all-in-one solution that has enough options or features to account for varying needs or with API that can be configured to connect to multiple systems, you have to look for tools that offer you flexibility. That way you can suit multiple systems, employer needs and handle the required data necessary to speak between systems. You’ll have more confidence that the tools you’re providing will work for your employers if you know there’s flexibility coming from the provider.

Understand the implementation process-There’s nothing worse than having a client excited about an opportunity to fix their technology problems only to find out that they’ll have to commit significant time and resources to get their solution up and running. Take the time to understand what the timeline and time investment looks like for implementing your technology solution. Remember, the goal is to make life simpler. A provider with an easy, replicable process for implementation leads to quicker, easier implementation for your employers and will save everyone time, money and energy.

Find long-term partners-As with any solution you bring to the table, your technology solutions won’t work perfectly 100 percent of the time. Seek a trusted, long-term partner that you can work with who you know will be responsive as issues come up. Part of the solution you’ll bring are the actual tools or technology, but sometimes the company behind the technology is just as big a part.

Managing a company’s data is a challenge and brokers are increasingly being asked to find a solution to that problem. Arm yourself with knowledge about the providers and solutions for solving the HR data challenge to set you and your clients up for success.

Inter-Company Marketing Group

Broker World
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Inter-Company Marketing Group

The Inter-Company Marketing Group (ICMG), a non-profit association that fosters and promotes business networking among insurance and financial services firms, has announced that registration is open for its 2020 conference, scheduled for January 29 to 31, 2020, at the Walt Disney World Dolphin Resort in Orlando (www.icmg.org).

The ICMG Annual Conference is the insurance industry’s unmatched networking opportunity, where top-level executives and thought leaders gather knowing the entire event is designed to help them build their businesses by fostering relationships and developing strategic alliances.

Besides extensive, high-level networking, the 2020 Conference program includes industry leaders discussing the latest topics, such as:

  • A Washington update on the current direction of healthcare reform
  • Marketing ideas for LinkedIn and other social/digital media
  • Fostering strategic partnerships
  • Building distribution

According to ICMG president Chuck Ritzke, FSA, MAAA, “We don’t think anybody in the insurance world will want to miss this exciting meeting at Disney World. Given the response so far, our projection for ICMG 2020 is more people, more deals!”

For more information, contact Larry Sigle, executive director, ICMG, 316-252-3368, administration@icmg.org, or Chuck Hirsch, president, Hirsch Communications Consulting, 314-630-1387, charles.k.hirsch@gmail.com.

The Inter-Company Marketing Group (www.icmg.org) is the premier non-profit association that fosters strategic alliances among insurance and financial services companies, providing targeted networking opportunities, sharing of knowledge, experience, and resources for successful inter-company alliances. Among ICMG’s members are marketing and business development decision-makers with insurance carriers, reinsurers, distributors, third-party administrators, and other related companies in the insurance business.

Life Inforce Policy Management Automation

Ken Leibow
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Life Inforce Policy Management Automation

It’s finally here—online tools for life insurance agents and clients to do basic tasks like change beneficiaries, look up paid-to-date information, see account values, and address changes without having to fill out a form or call a customer service phone number. It’s no longer a one-off but being implemented by most life insurance carriers today. You are also now seeing Artificial Intelligence (AI) chat tools for clients to get the information on their policies or to answer basic insurance questions on demand. Readily available for agents is new technology leveraging Big Data Analytics to analyze a policy resulting in new sales opportunities with products that better fit your client’s needs.

Policy Review
As an agent, you should do a review with your client on their life insurance policies at least once a year. Policy review should also occur when there is a life changing event or a family’s situation has changed, which could result in the need to increase or decrease coverage. Interest crediting rates on certain policies are much lower today than when the policy was first purchased. This can affect the future performance of your client’s policy, which could result in having to pay additional premium dollars to meet your client’s needs. Because people are living longer or if your client’s health has improved, then they may need to make an adjustment on their policy. On permanent insurance like universal life policies, loans and withdrawals and other changes to the policy, like premiums not paid as planned, may have impacted the current performance. Of course, if premiums have increased then you should do a policy review with your client. If the client is an owner or co-owner of a business and that business has grown or changed, then that is a compelling reason to do a policy review. Occasionally a life insurance company’s ratings or financials have changed, which may no longer meet your client’s risk tolerance.

The objective of the policy review is to do a thorough analysis of current insurance holdings vs. current needs. There are also industry and product changes to consider as well. I would recommend to carefully look at older life policies because of the way life insurance is designed today—the current changes in pricing, and how it’s medically underwritten, may have a significant difference in 2019 compared to five, 10 or more years ago. Also, you need to be up to date on the current tax, business and estate law changes. Higher life expectancies (mortality tables), lower interest rates and dividend crediting rates affect performance. There are new products on the market today to consider like indexed universal life products. Look at your client’s goals: If their goals are the same, is there a better insurance product for them today? If their goals have changed, then what’s available today to best meet those financial needs? For living benefit needs there are linked benefit products to consider. Should your client consider a way to financially maximize a policy he no longer needs by looking at a life settlement option?

Why Request an Inforce Illustration?
Over time the cash value and credited interest on permanent life products will be different with the inforce illustration than the original illustration. The inforce illustration will take into account the interest rate that has been credited to the policy and illustrate out future values based on the new current illustrated rates. For example, if someone has purchased an indexed universal life (IUL) policy and the cap rate has decreased, the new inforce illustration will reflect a lower interest rate than what was on the original. The original illustration might have used an 8.4 percent assumed rate of return, but now with a lower cap it might reflect a 7.12 percent as the new assumed rate for the future. It is important to remember that illustrations are just projections and the inforce illustration will show how the policy has actually performed and ballpark how it will most likely perform in the future.

Client Account Portal
Most life insurance companies have created self-service client account portals. Carriers like Prudential, John Hancock, Protective Life, and many others offer a client account portal with self-service functionality. Once the policy owner logs into the carrier’s website, they typically see their life insurance policy information overview: Product, policy number, insured name, death benefit amount, account values, policy owner, policy date, policy status, primary and contingent beneficiaries, and policy owner contact information. You can get a more detailed breakdown of the coverages such as riders for example. One of the key pieces of information is related to the premium starting with the paid-to date, current premium mode including premium payment history, receipt of last payment and the next scheduled premium due.

Self Service
The typical self-service option begins with the ability to make a premium payment or setting up recurring payments doing an automatic draft “ACH” from the policy owner’s checking account. This includes managing payments like editing scheduled payments. Policy owners can update their mailing address online and change beneficiaries (primary and contingents). Services that require a signature, like for a change of owner for example, may require a form to be filled out and sent in, or many carriers are implementing secure eSignature to make it completely self-service online. All service requests or changes to a policy have status tracking online and automatic update notifications via email. If a form needs to be completed, then you can access forms from a form’s library. Copies of statements like annual reports on UL policies, tax forms, and notices that were previously mailed or emailed are also available on the client account portal to access. During my research I only found a few carriers that have a PDF of the life insurance policy accessible online.

If the life product was an indexed UL or variable UL, then some carrier self-service portals allow you to do reallocations, loans and withdrawals, index strategy selections and fund transfers online. Carriers are very good at providing FAQ’s, Online Help, Q&A Chat using AI, Customer Service contact information, and basic insurance educational media. If you have more than one policy or even a different line of business like an annuity contract, then they are accessible with a single sign-on to the carrier’s client portal for self-service management.

New Sales Opportunities—Vendor Inforce Management Platforms
It is expensive and time consuming to monitor inforce policies. Many sales opportunities are left on the table because they were missed. Agents are reactive hoping that their clients will contact them. A recent study* shows that:

  • 41 percent of policies will lapse before the desired coverage duration.
  • 13 percent of term policies have a conversion deadline in the next 12 months.
  • Nine percent of policies are set to lapse or for the term to run out within the next five years.
  • One percent of policies are set to lapse or for the term to run out within the next 12 months.
  • 20 percent of policies have the potential to be sold through a life settlement.
    *Source Proformex

Proformex is a platform built for the life insurance industry that revolutionizes inforce policy management for independent agents, advisors and trustees. Their life insurance policy management software provides powerful portfolio analytics, individual contract monitoring and easy-to-use policy review reporting tools, putting oversight and control within easy reach. Proformex helps you monitor, analyze and manage the performance of policies in a single, distribution-agnostic platform.

Proformex’s key features are:

  • Automated illustration ordering.
  • Client-ready policy reviews.
  • Monitor policies and uncover issues.
  • Complete portfolio visibility.
  • Schedule premium reminders.
  • Drill-down analytics.

Visit Profordex at www.proformex.com.

Another vendor is Insured Connect, which is a cloud-based platform that connects carriers, distributors, advisors and policy owners into a single ecosystem. Insured Connect’s platform is called “NIC” and it is comprised of four main applications for the four customers in the insurance distribution chain: Insurance carriers (“NICcarrier”), distributors (“NICdistributor”), advisors (“NICadvisor”) and policy owners (“NICpolicyowner”). The four applications create an ecosystem for the management and servicing of inforce policies. Insured Connect works behind the scenes as a “secure data transfer” partner, or “service bureau” to the industry, making it easier for insurance companies to push their data to one source while providing distributors and advisors with a single solution to access all their inforce business. NIC operates on a modern cloud-based and open architecture that enables carriers and distributors to integrate their apps, tools and business services, making it much easier for everyone to do business. Visit Insured Connect at www.ins-connect.com.

Life insurance policy management automation is not only providing value to clients and life agents, but also helps carriers reduce their policy service costs, eliminating paper and reducing phone calls while creating secure, quick and easy access to self-service tools. Resource platforms using Big Data can help clients analyze their current life insurance policy and recommend changes that better fit their needs and current goals often resulting in new sales opportunities for life agents. New emerging technologies, tools, and trends for Life Inforce Policy Management can be found at InsurTechExpress.com.

California Notice Law For Flexible Spending Accounts

Janet LeTourneau
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California Notice Law For Flexible Spending Accounts

On August 30, 2019, Governor Gavin Newsom of California enacted Bill No. 1554.

Existing California law requires all employers to notify employees of information relating to employment and benefits. This additional bill requires employers to notify employees, who participate in flexible spending accounts and work in California, of any deadlines applicable to withdrawing funds before the end of the plan year.

Generally, flexible benefits plans are written to accommodate a “run out” period, after the formal end of the plan year, for participants to turn in claims incurred during the plan year. Some plans may allow a two-and-a-half month extended period of coverage (grace period) after the end of the plan year in which to incur expenses during the current year and use left-over funds from the previous plan year. Additionally, plans may allow participants to carry over up to $500 from a previous plan year to the current year from their healthcare flexible spending accounts.

The deadline to withdraw funds may be different according to the benefits selected. For instance, the dependent care portion of the plan may have a run out period for turning in claims incurred in the previous plan year, while the healthcare flexible spending account (FSA) may allow for a grace period or carry over, and thus a separate run out period.

These factors need to be taken into consideration when creating and distributing employee notices, including whether the FSA account is for dependent care, healthcare or adoption assistance.

The Notice needs to be delivered to participants before the plan’s year end, advising them of all deadlines to withdraw funds. The Notice also must be provided in two different forms, one of which may be electronic.

Notices may be provided as outlined below, but are not limited to the following:

  • Electronic mail communication
  • Telephone communication
  • Text message notification
  • Postal mail notification
  • In-person notification

The Secretary of State for California has stated that a statute enacted during a regular session of the Legislature takes effect on January 1 of the following year, unless a date is specified in the statute. This means that benefit plans ending any time in 2020, up to and including December 31, 2020, will be required to provide two notices to California employees prior to their plan’s year end.

Notices may be delivered at any time during the plan year and may include the delivery of the Summary Plan Description. Work with your employers to ensure timely delivery of this new Notice requirement.

The information contained in this article is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations.

The Dangers Of Bipolar Disorder

Robert Goldstone
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The Dangers Of Bipolar Disorder

One of the conditions met with a lot of confusion by brokers and agents in trying to assess where it falls underwriting-wise is bipolar disorder. Those with the disorder often represent it as if it were a minor inconvenience, and oftentimes any period of remission is met with a request for a standard or preferred issue. But bipolar disease (formerly known as manic depressive illness) has a lot of red flags both in how it behaves over time and in unexpected mortality, and has to be investigated quite carefully.

Bipolar disorder is characterized by episodic and marked mood shifts that can include major depression, mania, and virtually every shade in-between. Bipolar patients often present with a significant finding that mimics virtually any other coincident major mental health disorder, but the potential swing from one end to another makes it a major concern for treatment. Bipolar individuals have a very high comorbidity with substance abuse, which may make it difficult to diagnose as the major underlying problem. It may be a good idea to get in touch with a rehab centre to help the patient come off their addiction. They can get in contact with Integrated Healthcare Services in New Mexico to find these programs, for example, but there will no doubt be a selection within the local area. This means the diagnosis of mental health will be easier to make as the symptoms won’t be mistaken for the effects of the substance abuse. Bipolar disease is now characterized in two major subsets: Bipolar I, which is when there is significant mania, and bipolar II, where the manic episodes are less pronounced. Depression of course is a major part of the disease and represents the other end of the mood continuum.

Most manic episodes are characterized by hyperactivity, over-involvement in activities, irritability, flight of ideas, inflated self-esteem or grandiose thinking, and agitation. Initially the involvement is admirable and attracts the interest of others, but the grandiosity and aggressive behavior associated with it becomes less charming over time. There may be increased involvement in work activities, but also an unhealthy involvement in thrill seeking or pleasurable activities, with inherent danger therein. It can result in unreasonable purchasing and accumulation of things, and in taking risks that are unhealthy. Since bipolar or manic depressive disorder is a psychosis, the behavior can soon become psychotic and, when out of control, necessitate hospitalization. This is most characteristic of bipolar I disorder.

Bipolar II disorder has less elevated mood and mania but again similar findings in the underlying picture. The disease is often treated as exclusively depression without the underlying manic component. Missing the mania makes bipolar II almost as dangerous because treatment isn’t instituted appropriately until later in the disease. The manic episodes generally are not as long lasting as the depressive component.

One of the bigger problems in the ultimate prognosis of manic-depressive or bipolar illness is the big difference in the peaks and valleys of the mood swings. Mania has its own set of problems with risk taking behavior and putting oneself increasingly in a dangerous path. Even moderate treatable depression can seem like such a low relative to the initial starting point as to put an affected person in what seems like a hopeless situation. The co-involvement of substance abuse as well as thoughts of suicide make bipolar disorder a disease that must be recognized and treated as early as possible.

Most who have bipolar disorder have depression and manic episodes in a cyclic manner. As time goes on the cycles appear to have increased frequency between events, and a significant subset of people will have this occur three to four times per year. Substance abuse is a common finding as mentioned, and a disturbing number will die of completed suicide. Those with intense symptoms will have higher social disruption including job loss, divorce, and often rapid changes in domicile.

There is currently a large number of therapies being used to treat bipolar disorder, with more being researched all the time. For instance, the use of pure CBD tincture and other similar CBD products has gained much popularity with various mood disorders as it has shown increasing success in helping people with bipolar disorder to manage some of their symptoms. Also, like CBD, there is another budding resource in the herbal category, Kratom, which is an evergreen tree found in Southeast countries like Indonesia. It can be found online, on this site for example, and if consumed in the right dosage, it can help with problems like depression, mood disorders, anxiety, and more. It is important to remember, however, that this disease is an ongoing one, and that when an individual feels they are in remission and stops their medication, or when they become more tolerant to the treatment, symptoms may recur. Manic depression is more often controlled than cured and remains a lifetime worry for those affected. Later in the disease depression becomes more pronounced than mania, with its own set of problems and worries attached.

Bipolar disease rarely if ever is a preferred issue, and unlikely a standard issue as well. Severe cases are declined, as well as those where there is substance abuse or a history of suicide attempts. Mild or moderate disease can be insured if medical and psychiatric follow-up is both regular and ongoing. The longer the history of successful treatment and control of symptoms, the more favorable the underwriting will be in these situations.

Apply Best Practices To Build Stronger Carrier Relationships

John Thornton
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Apply Best Practices To Build Stronger Carrier Relationships

Today’s insurance brokers face new challenges and market trends that their forerunners did not. To succeed in the 21st century, brokers must adapt to the changing landscape by leveraging best practices across all operational areas. One area of particular importance is their relationships with the carriers. Knowing how to apply best practices to address key industry trends and build strong carrier relationships is essential.

Key Industry Trends and Market Conditions
The insurance marketplace is in a transformative state. The landscape is now marked with new distribution models such as online aggregators and InsurTech firms. Willis Towers Watson-CB Insights’ research found that from 2012 -2017, $312 million was invested in life and health insurance global InsurTechs. There has also been entry into the insurance market by major retailers like Amazon, Walmart and various banks and credit unions, all of which may have more robust e-commerce platforms through which to reach customers. The presence of these new players, coupled with industry consolidation, has introduced new competitive pressures on brokers.

Besides the pain points coming from within the industry, there are higher expectations coming from customers. They expect brokers to have a broader portfolio of products to meet their specific financial wellness goals, have a deeper understanding of their needs, and have product information accessible on a 24/7 basis via their PCs, tablets and cell phones. There is also the ongoing expectation that the broker still will be accessible for in-person meetings. This was confirmed in the LIMRA Insurance Barometer Survey 2018 which found that 69 percent of all respondents and 72 percent of Millennials agree that meeting with an agent/advisor before buying life insurance is important to them. This same survey also noted that customers expect a more seamless, self-service experience when it comes to researching and learning about a broker’s product offerings. Customers expect to continue their relationship with their broker over the life cycle of their experience with any given carrier. In fact, based on a J.D. Power 2018 study, customers go first to their broker or agent for advice or support relating to an insurance matter rather than a carrier’s website or call center. This wasn’t always the case.
Given these factors alone, what worked in the past may not be as effective today. The current insurance distribution environment requires that brokers have a clear value proposition which not only addresses new market conditions, but also requires them to assess their performance and then develop best practices that accommodate their customers as well as the carriers.

What Carriers Want from Brokers
There have been many surveys covering what brokers want from the carriers. For example, a 2017 Cannel Harvest Research Report, focusing on personal lines insurance, found high percentages of brokers to place a high value on these aspects of a carrier’s operation:

  • Competitive pricing (65 percent);
  • Carrier technology (61 percent);
  • Customer service (57 percent);
  • Agency compensation (55 percent); and,
  • Underwriting flexibility (51 percent).

What carriers want from their brokers has not been the subject of as many surveys. What we do know, however, is that carriers want clear and complete communications from brokers, greater access to customers in order to improve the customers’ experience, and less use of them (carriers) for testing quotes against other carriers and/or soliciting lower quotes and then not transferring the business to them.

Regarding communications, both carriers and brokers alike strive for more collaborative, open communications with the other. It’s one of the reasons why carriers are establishing broker advisory councils. These forums are proving very effective in facilitating productive exchanges between these two symbiotic entities. Also relating to communications, there is a heightened expectation by carriers that brokers will embrace more digital communications that help support their mutual customers’ service experience. Further, carriers want brokers to be that “in-the-field” presence in order to remain connected to their customer base. Even with all of the virtual communications through digital platforms, carriers recognize the importance of the human connection and believe brokers need to continue focusing on this.

Carriers also want their brokers to be strong generalists in terms of their product knowledge. If the carrier has a broad suite of solutions, they are more inclined to want to do business with brokers who can master more than just one or two of their products. This requires that brokers remain up-to-date on product developments and how they relate to the marketplace and especially the demographics of the region(s) they serve.

Technology is also a tool carriers hope the brokers will fully leverage. A small broker applying technology, for instance, to target Taft-Hartley multiemployer plan sponsors or middle market companies, can project an “easy-to-do-business with” identity that conveys a strong customer-service orientation more so than a larger, more established brokerage that is not deploying the latest digital technologies.

Along with accommodating the carriers on these factors, brokers can put themselves on a path to greater success by adhering to best practices that are in step with today’s insurance marketplace.

Best Practices Pave the Way to Success
Best practices aren’t confined to areas of carrier communication or customer service. They should envelope all aspects of a broker’s operation. They shouldn’t be static, but rather evolve to reflect changing market developments and customer expectations. Best practices should be a function of the broker’s business value proposition which answers such questions as:

  • What differentiates the broker from others as it pertains to the carrier relationship and the customer relationship?
  • What are the short- and long-term benefits derived by the carrier and the customer when working with this broker?
  • What expectations can the carrier and the customer have of this broker?

In support of their value proposition, brokers should establish best practices that include:

  • Consistent reporting on prospects indicating interest in the carrier’s products;
  • Sharing with the carrier their short- and long-term business goals with respect to increasing their marketing/sales of the carrier’s products;
  • A distribution strategy that embraces both digital technologies as well as the human touch, and keeping the carrier informed about this strategy designed to deliver optimum customer service, attract referrals, and facilitate new customer relationships;
  • Highlighting the carrier’s products in its customer newsletters or on their social media pages;
  • Regular product and industry training of their staff;
  • Marketing and sales initiatives that effectively target industry niches and/or other market sectors on which their business is focused;
  • Continuous benchmarking of sales performance and customer service metrics wherein performance data is regularly analyzed, demonstrating a strong commitment to a high quality operation;
  • A robust cyber security program that encompasses systems vulnerability assessments, penetration testing, data breach prevention/cyber security policies and procedures, employee training and cyber security awareness, maintaining a strong firewall, the deployment of leading-edge technologies (i.e., anti-virus software, encryption software, and key logging software to impede the key logging effect of malware, etc.), and a formal digital governance policy; and,
  • Policies and procedures that support the confidentiality of the carrier and its proprietary information.

Final Thoughts
The end game for brokers and carriers is the same. They both want to see their mutual customers gaining the financial protection insurance provides, and they each want to derive the financial rewards that come with doing business the best way they can. If that means changing with the times as needed, updating internal systems when required, investing in regular staff training, and remaining vigilant and ready to adapt to new market conditions, whether the influx of new players like the InsurTechs or the pervasive presence of cyber criminals, then that is what needs to be done. Above all, the best practices a brokerage can adopt to build stronger carrier relationships will also position it for long-term viability and success.

Insights Into Disability Financial Underwriting

Joe Russo
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Insights Into Disability Financial Underwriting

No matter how long you have made a living in the financial services industry, you are at the very least somewhat aware of the amount of time and usual care that goes into the underwriting of insurance policies by carriers. Insurance companies employ learned, specialized professionals to analyze risk and weigh the financial gain of making a profit by collecting premiums versus providing financial protection products to consumers. Underwriting is defined as accepting liability under the form of an insurance policy, guaranteeing payment of benefits in case of loss or damage. In the eyes of the insurer, there is a delicate balance of indemnifying risk and paying out monetary claims while still making money.

Underwriting methodology is, dependent upon the type of insurance, often broken down into two categories—medical underwriting and financial underwriting. As medical underwriting is a complicated subject unto its own, it quite rightly deserves a separate discussion at a later time. Here we will focus on the other imperative aspect of insurance risk analysis—financial underwriting.

Financial underwriting involves the evaluation of insurance policy applicants and classifying them so appropriate rates may be charged and appropriate benefit levels may be provided. It further involves assessing whether a proposed sum insured and product limitations are reasonable when considering the potential financial loss to a client.

Many of you sell life insurance and are probably very familiar with the underwriting standards and financial guidelines set forth by your usual life carriers. Benefit limitations are generally based upon calculations of multiples of income, varying proportions of net worth or even estate tax liability snapshots of your prospective clientele. In general, the equations measuring the financial underwriting of life insurance tend to remain straightforward and less complex than other insurances. Disability insurance financial underwriting, on the other hand, tends to be less elementary, requiring extra diligence by both insurance company underwriters and the consumer’s representative insurance agent.

Disability financial underwriters are commonly certified public accountants or at the very least have strong backgrounds in accounting on top of professional financial degrees. Expertise in the position doesn’t happen overnight and it can take years to develop the craft as they analyze risk after risk, case after case, while heading toward a common goal of reasonable financial protection of the carrier while providing marketable and affordable income-protection benefit programs to consumers.

Financial underwriting methodologies can differ among disability product lines. Regarding personal disability insurance, underwriters tend to maintain the insured person as their focus in terms of fiduciary needs and over-insurance concerns. Requested benefit amounts are commonly reduced to save the client from overpaying for benefit levels that wouldn’t come to fruition during a claim because of the client’s relatively lower annual income. However, reconsideration of benefits are available once an applicant’s financial situation has improved. Over-insurance is a main concern of dutiful financial underwriters while underinsurance should remain a rightful concern of insurance advisors.

The first step in consideration of the financial insurability of an applicant is the thorough review of the application itself and the financial summary provided by the applicant. In some cases additional information and proof of insurability is needed—like two consecutive years of recent individual federal and state income tax returns. Benefit eligibility is measured upon a percentage of net earned non-passive income set by the insurance company. Domestic DI carriers often penalize applicants for having passive “unearned” income such as rental property or investment proceeds. Specialty-market carriers like Lloyd’s of London and other Surplus Lines insurers often times ignore passive income without reduction of available benefits. If the applicant’s current work year is showing more positive signs in terms of higher income levels compared to previous tax years, financial underwriters will review employment pay stubs, fully-executed employment agreements, K-1 earnings and sometimes corporate financial statements in the sincere attempt to prove financial insurability among clients whose taxable earned incomes aren’t measuring up to their requested benefit amounts.

There are differing ideologies when it comes to domestic carrier underwriters and specialty-market underwriters regarding their respective maximum benefit limitations and participation caps. Domestic carriers stick to strict benefit participation levels of 50 to 60 percent of income with usual monthly benefit caps anywhere from $10,000 to $25,000, dependent upon on the applicant’s age, occupation class and income level. Specialty-market carriers lean more liberally and flexibly in their offerings, allowing participation of benefit levels up to 65 to 75 percent of income without monthly benefit caps often regardless of age, occupation or income level.

Underwriters are regularly presented with unique cases and situations which raise concern and require a more investigative approach. An applicant’s earnings history can show significant income fluctuations and volatility in employment confidence which will require underwriters to analyze the occupation, industry, and economic trends that may have impacted past earnings and contribute to future income streams. Business owners showing unwavering earnings in industries ripe with historical earnings fluctuations will often require additional financial documentation to support the earnings stated on the application. Spousal business partnerships may require additional detail since income splits can be convoluted and unclear as to how the earnings are truly being generated. Newly self-employed individuals with no previous earnings history often require a more cautious approach since earnings trends are not established and accounting records may not be readily available. Seasonal employment opportunities can be challenging, as well as the income variations and earnings advancements seen with occupations stemming from the entertainment, arts and literature industries.

Circumstances may arise in the underwriting process that commonly call for a reduction of available benefit or even the ultimate declination of coverage. Applicants who report gross revenues instead of net income are problematic as well as those that include passive real estate income in their earnings when they are not considered real estate professionals. Another “red flag” is the inclusion of distributions from an S-Corp or draws from a partnership in personal income instead of appropriate non-passive taxable earnings as reported on a K-1 schedule for a given tax year. Also, applicants commonly leave out details of in-force disability insurance policies through other carriers as well as failing to indicate whether said coverage is employer-paid and/or taxable to the insured person. On the contrary, underwriters will seek to advise applicants if their eligibility for higher benefits exceeds the benefit level for which they applied.

The disability financial underwriting of business cases is similar to that of personal DI, but the fiduciary analysis becomes more focused on the corporate entity rather than proposed insured person’s personal finances. And again, over-insurance remains a primary concern, but underwriters assume a business owner knows his or her business needs better than the insurance company. Underwriters employ supplemental questionnaires to evaluate risk for the underwriting of key person, business overhead and buy/sell insurance policies. The financial underwriting is fairly straightforward as opposed to underwriting personal benefits, yet all business disability cases still require substantial in-depth review.

Key person DI underwriting uses a simple multiple of personal annual income of the proposed insured key person as a beginning measurement for financial justification of the benefit. Underwriters will take other factors into consideration in their analysis such as potential fiduciary loss to the company, potential loss of current and future accounts, corporate ownership value of the insured person as well as perceived value of the key person to the company.

Business overhead expense underwriting requires the applicant to provide a detailed listing of average monthly tax-deductible expenses including mortgage interest payments, utility bills, insurance premiums, accounting services, maintenance costs and certain employee salary expenses.

Buy/sell DI underwriting requires an accurate outline of corporate structure as well as an executed buy/sell agreement and corporate or partnership tax returns.

As an insurance professional, your role is absolutely important in the support of attaining disability insurance for your clientele. You can read between the lines and address certain criteria as to what attributes disability underwriters will favor and fault in a prospective risk. You can also help streamline and accelerate the financial review processing of your client’s file by providing missing information that was mistakenly not disclosed on the application. Be proactive in assisting your clients by providing tax returns, year-to-date pay stubs and any details pertaining to changes in employment or income fluctuations. Providing these items can simply help provide a sense of goodwill with underwriters, demonstrating the client is forthcoming with their overall financial situation, and will most likely help in the ultimate approval of the risk and the issuance of the insurance policy in a timely manner.

The financial underwriting of personal and business disability insurance policies isn’t always black and white and is much more than just numbers, dollars and cents. Underwriters will look at all the provided figures and data, but additionally take the inherent value of the prospective client into consideration, in hopes of providing appropriate insurance levels to paying consumers while still maintaining a profitable bottom line for the insurance company.

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