Broker World

National Voluntary Benefits

Two industry veterans have founded National Voluntary Benefits, Inc. (NVB), a Phoenix, AZ-based alliance and resource for voluntary benefit specialists to share sales and system ideas and to learn from each other about the intricacies of the voluntary benefit business.

The principals are Jack Lutz and James Nisbet III. Lutz began his insurance career in the group department of Connecticut General in 1960. He was instrumental in marketing one of the first HMOs in the United States, was a life and benefits manager for a large property/casualty company, and developed and marketed Section 125 plans. He came out of retirement to build this national voluntary benefits organization.

Nisbet has been in the insurance business for more than 44 years and began with Connecticut General. He founded and sold two brokerage general agencies and was one of the founders of Brokerage Resources of America, a life insurance marketing group. He focused on qualified and 401(k) plans before retiring from the life brokerage business in 2011.

NVB is currently doing business in 21 states and represents more than 15 voluntary benefit companies. The intent is to be licensed in all 50 states and the District of Columbia. The company is a one-stop shop that helps entrepreneurial benefit producer affiliates in plan design, marketing and presentations. The producer remains the “agent of record” and NVB’s first priority is assisting in preparing proposals, conducting initial enrollments and handling ongoing service. NVB offers the same or better contracts that are currently available. The difference is that the combined production maximizes sales volume and compensation.

The goal is to build long-lasting, cohesive relationships with producer/affiliates, who own their businesses, as entrepreneurs and not as employees or captive agents of an insurance company.

American National Life

American National Insurance Company has introduced ANICO Strategy Indexed Annuity PLUS 7 and 10 (ASIA PLUS), available now where approved. This product provides up to 12 potential interest crediting strategies from which clients can choose.

ASIA PLUS provides the opportunity to earn a higher interest based on the performance of the S&P 500 Index without the client being directly invested in the Index. The client will never lose money based on the fluctuations of the S&P 500 Index, as the indexed interest crediting strategies have a zero percent floor.

ASIA PLUS provides two different lifetime income riders that allow the client’s income base to grow at a specified rate for a specified term before the client begins receiving an income benefit.

Available in 7 and 10 year versions, the ASIA PLUS offers multiple features to assist clients in various stages of life. 

American General Life

American General Life Companies (American General), a part of AIG, has introduced the Lifestyle Income Rider. This new rider can be issued with AG Secure Lifetime GUL policies.

This new rider can effectively turn an American General life insurance product into a guaranteed stream of retirement income. AG Secure Lifetime GUL was originally developed to provide a guaranteed death benefit, guaranteed access and guaranteed cash value. The new Lifestyle Income Rider enhances that with affordable protection against the valid fear of outliving retirement income, giving policyholders the option to receive a living benefit from their life insurance policy. It features guaranteed monthly withdrawal benefits after as few as 15 years, regardless of the cash surrender value within the policy. Further, clients have the flexibility to transform a portion of their life insurance benefit while they are still living to help supplement their retirement income. They can choose this living benefit and then stop it during payout if they decide they no longer need it and want to maintain a life insurance benefit. If they stop the living benefit, they can restart it at a later date.

The Lifestyle Income Rider on AG Secure LifeTime GUL is available for issue ages 18 to 70 in specified amounts of $100,000 to $10,000,000 (conditions and limitations apply; see your agent for details). The rider, which has its own premium, must be issued in conjunction with the terminal illness rider on AG Secure Lifetime GUL. 

Prudential Life

Prudential Individual Life Insurance, a business of Prudential Financial, Inc., has named Mark Hug executive vice president, product and marketing, and Ronald Herrmann (who joined Prudential following the close of its acquisition of The Hartford’s individual life division in January) executive vice president, distribution.

In his new role, Hug will lead the product and marketing areas, focusing on product solutions to meet the life insurance needs of clients, marketing research analytics, marketing programs and materials, and in-force client management. Prior to this new role, Hug was the executive vice president of marketing and distribution for Prudential Individual Life Insurance, where he had responsibility for all domestic individual life insurance sales. 

Herrmann will be responsible for delivering distribution solutions and for managing and fostering relationships with institutional and third party distributors, as well as with the company’s career agency sales force.

At The Hartford, Herrmann served as senior vice president of distribution and sales, with responsibility for all distribution aspects of the individual life division.

Richard Hellerich, Brian Myhr and John Douglass

"Protracted low interest rates have impacted all lines of the annuity business, causing manufacturers to reassess their exposure among various product lines,” said Joe Montminy, assistant vice president and director of LIMRA annuity research. “The sustained uncertain economic environment has many companies implementing conservative risk management strategies in an effort to prudently manage their business.”

 Despite an overall 11 percent decrease in fixed annuity sales from 2011-2012, LIMRA’s research shows that indexed annuity sales hit a record high of $33.9 billion in 2012—a five percent increase compared to sales in 2011 (see chart for an overview of LIMRA’s statistics for all annuities).

 In summarizing sales for the fourth quarter of 2012, Jack Marrion mentioned on his indexannuity.org website that “Independent agents accounted for 83 percent of fourth quarter index annuity sales. FIAs with 10-year surrender periods accounted for almost three out of four sales. He went on to say, “As in the previous quarter, the driving force behind sales on most of the top selling products was premium bonuses, but the roll-up rate of the lifetime income benefit on other products continued to generate sales. The biggest effect on sales is that the amount of deposits in bank money markets and short term certificates of deposit increased by $460 billion from April to December in 2012 (nervous money prefers to remain liquid).” (http://www.indexannuity.org/ic2013.htm).

 Last year Broker World conducted an annuity round table discussion about the state of the market. The overall response was that the opportunities for sales were strong, yet the current investment climate and the fact that carriers were faced with difficult challenges in pricing products and managing strains on reserves kept new product introductions to a minimum. This month these annuity marketing organizations were again asked their opinion of the current annuity market.

 Richard Hellerich, principal, Great Plains Annuity & Life Marketing, Lenexa, KS. “In my opinion, nothing has changed regarding the current investment climate—it is still tough on carriers. Where weekly notifications on annuity interest rate changes are the norm, we are also seeing some reductions to income roll-up rates on some fixed indexed annuities. From conversations with our annuity producers and looking at the average of case demographics on submitted annuity production processed by our office, we have noticed several trends.

 “First, we are seeing younger issue ages with baby boomers embracing the fixed indexed annuity value proposition. Is this due to their concerns about another market downturn? A flight to safety by younger savers worried about government spending, Social Security solvency and the economy in general? While I’m not 100 percent sure of the answer, I do know we are seeing lower issue ages with the business processed through our office.

 “Fixed indexed annuity products offering secondary benefits such as chronic care and enhanced death benefit riders are gaining in popularity and sales. Several carriers have launched new FIAs offering these flexible benefits. I think clients like the idea of having their premium dollars performing double or triple duty if needed. The options of guaranteed lifetime income, chronic care benefits if health issues force the need (opposed to paying for a “use-it-or-lose-it” benefit), and providing the option for an inheritance benefit all in one contract is generating consumer interest and, at our office, sales.

 “I believe savvy consumers at the crossroads of early or pre-retirement understand they are on their own when it comes to creating reliable retirement income. Massive government spending and budget deficits, coupled with the Fed continuing to print money and the lack of fiscal leadership inside the beltway, point to a harvest of higher taxes and rising inflation at some point in the future. Our responsibility is to educate consumers regarding their choices and provide financial options that fit their risk tolerance, desire for guaranteed returns, and flexibility for future needs. While the number of new annuity product launches may be down, interest in this product solution is growing rapidly.”

 Brian Myhr, vice president, Fairlane Financial Corp., Fort Lauderdale, FL. “Nothing much has changed during the last several months. Newer products just slice the loaf of bread differently. In other words, there are only 100 pennies in a dollar, and because the product actuaries are responsible for return on investment and return on earnings, there can’t be too many bells and whistles we haven’t already seen.

 “While the investment returns many insurance carriers receive have continued to be anemic, a few exceptions are those carriers operated by hedge funds. Although unorthodox in the insurance environment, these companies can and do offer higher caps and more generous compensation to producers, due in part to their savvy investment experience.

 “Until long term interest rates rise, producers will have to focus on the guaranteed lifetime withdrawal benefits and other ancillary benefits being laced into fixed index products.”

 John Douglass, principal, Annuities Exchange/Financial Products Corp., Mil­­wau­kee, WI. “A lot of exciting new products are hitting the street every day. One feature that we offer to brokers is our learning center, where I have the opportunity to talk to home office representatives about new products as they are introduced. I get the opportunity to learn along with the brokers who are listening to the new features that the companies are introducing.

  “Most recently, the changes made to the living benefit riders on indexed annuities have taken center stage. In addition to providing guaranteed income, which they did in the early generations of the product, they now offer many outstanding features—guaranteed death benefit as well as other benefits, to establish one contract that can meet many needs for the consumer. This has proven to be a very popular approach and continues to keep the indexed annuity market going strong.

 “In addition, we have the niche products like critical illness and wealth transfer products that are proving to be very popular. Despite the downturn in the economy, people still have needs, and they must deal with these important life decisions. To meet these needs, one of our challenges as brokers is to address the downturn in the interest rates. Many of our clients, particularly the older ones, do not want to be forced back into the market, still having memories of what happened to their portfolios in the most recent recession.

 “A guarantee of 3 percent with deferred annuities still proves to be very attractive in comparison to certificates of deposit and money markets.

 “Insurance companies have proven time and time again that they can come up with products that meet consumers’ needs. I am confident that they will continue to strive as they have in the past. All the brokers who have been in the market as long as I have remember when we all thought whole life was dead, back in the 1970s, when everyone was buying term and replacing whole life insurance with all kinds of variations of deposit term, etc. Then the insurance industry moved on to all the other generations of interest-sensitive whole life, universal and variable life. It always amazes me how clever the insurance companies can be in creating new products for us to sell.

 “There are more opportunities today for a broker than ever before. The needs are more important than ever as the baby boomers try to rebuild portfolios and provide retirement income for longer periods of life expectancy. The future of the life insurance industry is bright and attractive for the informed producer helping cope with issues of health care and providing benefits for our clients’ families.

 “To summarize, indexed annuities, guaranteed CD-type annuities, life products including indexed universal life, and wealth transfer single premium whole life are my current top picks.” 

SBLI

SBLI of Massachusetts has named William R. Izor, CLU, ChFC, CFC, CFP, regional vice president of independent distribution. Before joining SBLI, he was the vice president, national accounts, for Prudential Select Brokerage. Prior to that he was the regional director for Southern California at Penn Mutual Life.

An experienced financial services executive, Izor is a Registered Principal with FINRA, holding series 7, 24, 63 and 65 licenses. He has lectured at national seminars, conducted educational meetings at industry conferences, appeared on financial radio shows and written articles for various trade ­publications. 

Superior Mobile Medics

Superior Mobile Medics has announced the addition of Amy Jeffryes as vice president of marketing for Superior Mobile Insurance Solutions, a nationwide health data collection company.

With more than 15 years of marketing experience, Jeffryes brings an extensive industry insight to her position at Superior. In her new role she is responsible for the strategic development, planning and execution of all marketing initiatives and new product development.

Prior to joining Superior, Jeffryes served as chief operations and chief compliance officer for Elite Marketing Group—Insurance Designers of Houston. She is a member of the professional development committee for NAILBA as well as the life brokerage technology committee for which she chairs two subcommittees. 

National LTC Network

The National LTC Network is underwriting a new project as a gift to the industry and the planning public. The “Makes a Difference” campaign was started in February 2013 as a way to communicate directly to Americans exactly how owning long term care insurance makes a difference when care is needed. The campaign’s videos show real people talking about how they have seen LTCI make a difference—and how LTCI would have made a difference.

The National LTC Network believes that what is missing when it comes to the topic of LTCI is the understanding of exactly what it does at claim time and how it makes a difference! The hope is that agents will link to this site the same way they link to cost of care surveys and/or government sites. If every prospect watches two or three videos before a meeting with an agent, the purchase isn’t just dollars and monthly budgets, it’s a question of what those prospects’ families will experience if they buy or don’t buy coverage. The website is at www.makesadifference.us. 

National Brokerage Agencies, Inc., has appointed Janice Stevens as its new executive director.

Stevens has more than 25 years of experience in leading associations, primarily in the financial services and insurance industry, with 150 to 4,500 members, chapters or companies. While she will work full-time with NBA, her firm, Professional Administrative Services (PAS), an association management company, will continue to support activities of other clients. 

American National

Brooke Malley, CLU, is the newest member for the brokerage channel of The Independent Marketing Group, a division of American National Insurance Company and American National Life Insurance Company of New York, serving as the national sales manager for the Southeast and upper Northeast regions.

Prior to joining American National, Malley was a member of Lincoln Financial Group, where she worked closely with regional sales directors and general agents across the United States.