Stephen Howard

I need to begin by offering an apology to National Western Life.  Through a computer error their submission for the January Carrier Forecasting Forum was inadvertently left out, as was their ad.  I’ve included their contribution in this issue and urge you to read the comments of their new Senior Vice President and Chief Marketing Officer Bruce Wallace, beginning on page 30, as well as look over their ad on page 39. [SPH]

The February issue suffers from a distinct loss, as columnist Charlie Gipple has been forced by his expanding role at North American Company to abdicate his throne as this magazine’s monthly sales success guru.  Charlie and I have grown a great friendship over the years as his expertise advanced his career from Genworth to Partners Advantage to his current position as resident sage at North American. I’m happy to report, however, that I underhandedly extracted from him a blood oath to continue to contribute to Broker World periodically before I “allowed” him to turn in his badge and gun. [SPH]

Working to create the visual masterpiece that is February’s continuation of photo coverage of the NAILBA Annual Meeting, I’m annually humbled and moved by the necessary reflection on the charitable donations happily given by the NAILBA family.  Not only do some exhibitors use this gathering to generate donations to causes that move them—as did Foresters Financial by donating $25 for every business card received to the Ronald McDonald House chapter in Puerto Rico to aid in hurricane relief—but literally hundreds of the attendees at each NAILBA annual dig deep with smiles on their faces (or occasionally feigned scowls when I’m putting the bite on them) to buy raffle tickets, or silent auction items, or fanatically overbid during the frantic live auction—all to benefit the NAILBA Charitable Foundation and the numerous charities into which it breathes extra life and hope.  And let’s not forget the generous donations of great carrier partners Legal & General America, Prudential and Mutual of Omaha, and stalwart marketing groups BRAMCO, TMA,, LifeMark Partners and NBA.

The mission of the NAILBA Charitable Foundation is to encourage volunteerism among NAILBA members and provide grant funds to worthy charitable organizations that serve to enhance the quality of life for those less fortunate, with a special emphasis on children.

In a time when competition for grant money is fierce, the NAILBA Charitable Foundation is dedicated to providing funds to small, well-run charities in the communities of members and corporate partners that may not otherwise have access to additional funding.

Through the generosity of NAILBA members and corporate partners in the past year, the NAILBA Charitable Foundation was able to distribute $230,000 in 2017 among 17 local charities and Life Happens. To make a donation to the NAILBA Charitable Foundation visit www.nailbacharitablefoundation.org/donate.

 Each year during one of the general sessions NAILBA shows a video presentation of all the charities that received funds during that year’s grant cycle, and I have yet to leave that presentation with dry eyes (and this year was certainly no exception). From the bottom of my heart I thank each and every one of you who contributed to the NAILBA Charitable Foundation, and NAILBA for allowing me to be a small part of it. [SPH] 

I am sad to report that December, 2017, marks the last planned appearance of a great friend, mentor and true industry giant, W. Harold Petersen, as a columnist in Broker World.  His plan—I assure you not mine.  Petersen International Underwriters stalwart Joe Russo has agreed to “pen” January’s column.  Disability Insurance Insights… will continue, albeit with a different industry sage, but more on that next month.

 W. Harold Petersen, or Harold, or Pete to many lucky enough to call him friend, was introduced to disability insurance at the age of 21, interrupting what had seemed a promising career in, not surprisingly, journalism following his education at UCLA.  The Los Angeles Times had offered him a position.  But you see, there was this girl…this truly wonderful girl… Harold had fallen deeply in love with Mary Jacqulyn Cecilia O’Meara, employed at that time by Mutual of Omaha, and she convinced him to interview for a job, which he did.  And he married her—the fantastic bundle of energy and joy many in the industry fondly know as Jacquie Petersen.

 But many may not be aware of the back story that fuels Pete’s passion for disability income insurance.  His family, like many, suffered through the great depression, and worse, a four year drought that cost them the family farm, farm equipment and a prized dairy herd.  His family was forced to move to a small rented house, “Little more than a chicken coop.”  They got by for awhile, but their ultimate financial undoing came with Pete’s father suffering  a severe bout of sciatica rheumatism that totally disabled him for many agonizing years. His mother kept them alive by growing fruits and vegetables in a small garden and by working as a domestic for a meager income.  Pete somehow earned enough to get through school and off to Los Angeles to live with his grandmother while attending UCLA, thanks also to a modest track and field scholarship.

 His father finally regained his health, got a job as a night watchman, and his parents,  always driven by determination, managed to save enough out of their earnings to buy acreage of farmland.  They eventually regained financial freedom.

 All the suffering and denial of his family could have been prevented by disability insurance, but no insurance agent ever told Pete’s father about it.  No social security or other social insurance then existed.  Pete had experienced the painful economic demise of his family, and hence vowed to help prevent similar experiences happening to other American families.

 After decades in the industry with an intense focus on disability insurance, Pete’s three sons joined him in business.  They found success selling to and serving insurance brokers and financial planners and eventually partnered with Lloyd’s of London, granted the esteemed status of Coverholder.  Today Petersen International Underwriters serves the DI needs of countless agents and their clients, finding adequate amounts of disability insurance for difficult cases by commingling traditional insurance with Lloyd’s plans and by working to make disability coverage available to nearly any occupation,  It is their mission to find disability insurance coverage for all persons earning an income.

 It has been W. Harold Petersen’s passionate duty for almost 70 years to open the eyes of agents and consumers to the fact that the fundamental building block in life is the ability to work and earn money, and when that is prematurely taken away all is lost.  Without an income, there is no way to pay for healthcare and health insurance, autos and auto insurance, houses and homeowner’s insurance, retirement, or death and its consequences.  Sometimes not even adequate food.  What can thoroughly replace the loss of ability to earn a living?  The answer is disability income insurance.

 Pete remains Chairman of the Board of Petersen International Underwriters, but intends to spend some time away from the office pursuing other personal interests—no doubt involving Jacquie and their many children, grandchildren and great grandchildren.  If you have enjoyed his columns, or are perhaps inspired by his story, please email a quick note of thanks to him for all he has done as a champion of our industry—whp@piu.org.

Pete, you and your family have been a blessing to me, and to Broker World, since our first meeting at an NAHU conference in the mid-80’s—and I can’t thank you enough. You’ll be sorely missed as a columnist, but, thankfully, still treasured as a dear friend.  Heartfelt best wishes to you and the truly wonderful Jacquie! [SPH]

Congratulations are in order for good friend Keith Hoffman, vice president, Disability and Corporate Benefits, NFP, and winner of this year’s W. Harold Petersen Lifetime Achievement Award presented by the International DI Society (IDIS). The IDIS is an organization dedicated to growing the disability insurance industry through education, awareness, promotion of high ethical conduct of the membership and increasing the knowledge base of the agent, producer, company and carriers.  (If you write disability insurance as a part of your practice, I urge you to join the International DI Society.) This is the 13th year for this prestigious award, presented to the individual who has demonstrated a long term commitment to DI, has made a distinctive contribution in the industry and follows the ethical standards of the IDIS. Unselfish voluntary service is also a consideration in the selection process.  Keith Hoffman undeniably embodies all those qualities.

Keith received his bachelor’s degree in communications from the University of North Carolina at Chapel Hill, pursued a master’s degree in organizational communications from Florida State University, and worked for the top three disability insurance carriers before joining NFP in 2006. At NFP he is responsible for NFP Disability, a single platform providing sales and support services to all of NFP’s distribution channels. NFP is ranked Top 10 in Best’s Review of Top Global Insurance Brokers and has provided over 30,000 individual disability policies to corporate clients, including many of the Fortune 500, representing over $75 million of in-force premium.

In his 30+ years in the business he’s attended and spoken at conferences and seminars across the country, authored countless white papers and articles, and starred in a number of training videos. He has trained hundreds of agents and brought over 30 of them into the IDIS.

But his passion for the DI business isn’t at all defined by premium or commission dollars—it’s about the people he helps.  I see many at the IDIS conference compassionately dedicated to a craft that helps people in physical and emotional distress keep their homes, their lifestyles and their dreams of education for their children intact while dealing with the devastating effects of disability. And almost as an afterthought build a great life for themselves and their families. That’s Keith to a T.  But even in a conference full of excellent insurance professionals, his compassion for others, his dedication to the profession and his humble professionalism make him still stand out.

But that’s not even half of the story. His work to help others beyond the insurance contract are even more impressive if that’s possible.  In 2002, he was awarded the Unum Philanthropic Award for volunteering to train services dogs so that those clients he serves and many like them returning to work could have that much more comfort and assistance. Keith dedicates his time and knowledge anywhere he can—teaching financial literacy courses in his local school district, Girl Scout troops and the military. He has developed more than  one hundred hours of curriculum available for audiences from 2nd grade up through adults with distressed situations.

 In 2009, he was diagnosed with cancer and—after surmounting it like he does any challenge—he has gone on to serve on the board of directors for UsTOO, the largest educational and awareness non-profit for prostate cancer, and serves as a patient advocate for the fight against prostate cancer, both locally and nationally, for the Department of Defense through the Congressional Directed Medical Research Program.

Oh, and in 2014 he won swimming gold at the FINA Masters World Championship in Montreal.

Despite this wealth of accomplishment he remains happily humble until you ask about his family.  He puffs up and glows with pride when discussing his wonderful wife Terri, who is also in the insurance business, and his lovely daughters Olivia and Ava.  Congratulations to Keith, Terri and the girls for a job well done and a life well spent—in service to others and our industry.  You are richly deserving of our praise and the W. Harold Petersen Lifetime Achievement Award.[SPH]

“What a long, strange trip it’s been.”  – Grateful Dead

The first issue of Broker World was September/October 1980. Fifty-two pages, eight feature articles and 27 advertisers.  The predecessor of this column was simply titled “Welcome…:” and our illustrious founder and sage William Howard explained the decision to launch the first new insurance magazine for agents in 25 years thus: “Our decision to do so was based on the conviction that a factor already significant in the total marketing equation is destined to increase dramatically in importance during the years to come.  The name of that factor is brokerage.”  He continued, “At the present time consumer demands and inflationary pressures are both generating unprecedented diversity of product and, some believe, mandating greater efficiency in marketing than traditional systems afford.”

The lead editorial was by George G. Joseph, CLU, president, Life Insurance Marketing and Research Association, titled Brokerage Today And Tomorrow.  Other articles covered risk underwriting; a panel of experts predicting where life insurance marketing would go in the next decade, the direction of cash value life insurance, and increasing flexibility in life products; Retired Lives Reserve; the advantages of reaching impaired risk clients; a “moral risks” discussion; and an underwriting look at Epilepsy. Ads in the issue included Retired Lives Reserve products, small group, and impaired risk, impaired risk and impaired risk.

In November 1990 editor extraordinaire Sharon Chace reported on a speech by ACLI President Richard Schweiker to the 101st annual meeting of the Association of Life Insurance Medical Directors of America.  Schweiker spoke on the hot topics of the challenges of AIDS and the possible pitfalls of genetic testing. Our intrepid publisher discussed the merits of a BGA serving as many agents as possible and limiting involvement versus nurturing a smaller cadre of agents and providing, as nearly as possible, their every need in the business.  The conclusion? The very best went down both roads at once, attempting to gradually gain credibility, agent confidence and finally commitment through superior service.  Articles covered a variety of substandard and specialty risks in the life, international and disability markets; survivorship life and estate planning for the 90s; and a LIMRA piece outlining the industry’s growth over the past 50 years and eerily outlining where our industry would be in the next 50 years. Companies were advertising annuities with 9.25 to 9.5 percent first year yields or better with one time bonus up to five percent, universal life interest at 9.25 percent, a plethora of group health plans, and there were a bunch of impaired risk ads.

The November 2000 issue saw Ms. Chace announce the selection of two prominent NAILBA members to the LIFE foundation (now Life Happens) board, outlined NAILBA involvement and commitment to the Life foundation and espoused the benefits to both from their association.  Articles again predominantly explored health and impaired risk considerations across the spectrum from agent responsibility to lab results to carrier considerations. Ads featured annuity first year interest rates from 10 to 12 percent, equity indexed annuities, 30 year guaranteed level term, multiple variable product ads, a variety of LTCI ads from carriers who have subsequently exited the business, cigar or pipe as non-smoker…and many impaired risk ads.

November 2010’s underwriting articles focused on the importance of relationships in the impaired risk market, the importance of setting proper expectations, and the ways revamping underwriting and application processing can drive new opportunities.  Sharon Chace examined the beginnings of NAILBA in 1981-82 and the key role SUB-Centers (The Society of Underwriting Brokers) played in it’s formation.  Advertisers offered annuities with (gulp) 3.20 percent first year interest or 2.35 with a five percent premium bonus, indexed universal life, no lapse universal life, lifetime income benefit riders, tech advances creating ease of doing business with carriers, and ads from impaired risk specialists.

This November issue features articles on financial justification; the importance of field underwriting; medically underwritten SPIAs for financing elder care; living benefits to fund experimental cancer treatment; and the underwriting of settlements designed specifically for long term care.  (And this self indulgent stroll down memory lane.)  Ads include indexed annuities, fixed annuity with income rider, indexed universal life, variable life, whole life, term insurance, accelerated underwriting, living benefits, DI, contingency coverage, LTCI, asset-based LTC protection…and impaired risk.

So what’s the point?  Where exactly brokerage is heading is a topic best left for our industry’s sages rather than this silver spooner, but some questions beg asking:  Will our industry see significant recovery from nearly a decade of artificially suppressed interest rates that will allow carriers to again become more aggressive in product design and risk selection? Will SPDAs and SPIAs again enjoy something better than “Yes, but…” status?  Will carriers reenter the mostly abandoned markets of stand-alone LTCI and disability income?  Will our industry step up and re-develop a financially defensible way for brokers to specialize on the vastly underserved middle market and how? In what ways will the race to speed underwriting via tech advances affect the substandard market?  Is brokerage now becoming the dutifully welcomed, increasingly compliant, differently-mothered stepchild of the career system, where comparatively fewer producers means there are enough “just send us your healthy and wealthy” prospects to keep the dedicated more than busy enough to secure a very nice lifestyle and carrier boardrooms comfortable with easily defensible, increasingly conservative risk management?  Will the desire to place protection for the families of the impaired grey and fall away like my once-Prince-Valiant-like luxurious black locks?  Or will brokerage reinvent itself and make the dedicated pursuit to secure protection for all clients rich and not so…healthy and not so…again a challenging but exciting, rewarding, and satisfying lifelong career choice for a new generation of independent insurance producers?

For now, I just applaud each of the brave grey strands that cling to my scalp for another day.[SPH]

“Together, more or less in line, just keep truckin’ on…”

The “New Agent Crisis” is a figment of our own imagination.  Or rather, it should be.  After reading an article by Barry Moltz, 7 THINGS MILLENNIALS VALUE MOST AT WORK, (https://www.americanexpress.com/us/small-business/openforum/articles/7-things-millennials-value-most-at-work/), our industry seems tailor made for the single largest generation in today’s workforce.  Moltz outlines seven characteristics of Millennials that affect job satisfaction. In Moltz’s words (parentheses mine):

1. An entrepreneurial spirit. They studied it in college and may have already started several small businesses on the side. (Seems a perfect fit.)

2. A small company with fewer employees. They’re not willing to be just a number in a large corporation. They don’t want their contribution and opinions to get lost in the larger crowd. (See item 1.  It doesn’t get any smaller than one employee.)

3. Frequent feedback from a boss. Gone are the days of the annual performance review. Gen Y grew up with “helicopter parents” who were always telling them how great they were. (Wife?  BGA? Company agency manager?)

4. A connected, social atmosphere. This is a connected group of employees and will socialize in the office and online. (Satisfied by another soapbox of mine—the necessity of belonging to your industry associations.)

5. A tech-friendly environment. They know how to use the most advanced technology tools and as a result are more connected to each other than any other generation. (Can you say, “Name-Your-Price Tool?”)

6. Work-from-home and flexible-hour options. Unlike in the 1980s, Gen Y doesn’t see the need to relocate to where their job is. As a result of the Internet, location is no longer associated with work. According to the recent PwC Next Gen: A Global Generational Study, 66 percent of Gen Y expects to be able to work flexible hours at home and in the office. (Independent agents are the epitome of “set your own schedule”-ers.)

7. A chance to give to the greater good. Employees are traditionally driven by pay and promotions. However, Gen Y is also passionate about ways they can contribute positively to their world. (I wish every Millennial could accompany a life insurance agent delivering a death claim to a grieving widow.  If that could happen, and the stated attitude is valid, we should have 50  million new agents in short order.)

Although the insurance industry has trailed many in various facets of tech adoption, our industry is on the upswing regarding tech adoption finally and social media marketing and mobile device tools are now commonplace.  Millennial’s would find fertile ground for influencing and innovating in this critical area.  The remaining points outlined above seem like a Password description of our industry.  So where’s the disconnect?

Is it that insurance, Art Jetter notwithstanding, isn’t sexy?  I didn’t see “Cultivate an Alluring Image” on the list. I’ve often postulated that televised attacks on “insurance” have been responsible for the gradual souring of public sentiment toward insurance companies in general, although largely unrelated to the life insurance side directly.  Our past President’s strident trumpetings of “We’re not going to let your insurance company discriminate…” when pushing for public acceptance of the ACA, and a host of P&C targeted ads from “best plaintiff’s law firms” vilifying simply “The Insurance Company” are bound to have a subtle corroding effect on word-associated entities. I cannot recall a single “Action Reporter On Your Side” visiting a grieving widow or a disheartened disabled breadwinner to chronicle the receipt of a check from an insurance company and the swell of relief it engendered.

But like most things that vex us, I suggest we take a long hard look in the mirror before we impotently lash out at our own determined set of menacing monoliths.  In the mirror do you see any semblance of the young person just starting out in the insurance business, yes wondering how he/she was going to attain and/or care for a family, but also determined to help other families protect themselves against the great financial burden attendant with unthinkable sorrow and misfortune?  How often, in those early days, did you ask a husband, “What would your wife do if you were hit by a bus tomorrow?” I bet the whippersnapper-you wasn’t asking the bulk of your early clients how much of their estates they wanted to pass tax-free to their heirs.

When most of you started, a $50,000 whole life sale was a big deal! A $500,000 term sale took a bit of finagling, both with the customer and the home office. Because the bulk of your prospective clientele—those in your centers of influence—resided with you in the middle market.  And the worst thing people said about the insurance industry was the smirking allusion that hell on earth was being caught in an elevator with an insurance salesman.  Why?  Because a good percentage of the people in the middle market had either direct or indirect knowledge of bad things happening to good people and how life insurance had mitigated their financial distress—or unfortunately had not—and trust of the insurer was never a consideration when either the positive or negative example moved them to seek protection for their families.  Plus, insurance salesmen were known for their bulldog tenacity pursuing a sale to Anyone! Anywhere!  But then again, we had only three TV channels and the news we got was a great deal more objective.  The sway-intending pieces were clearly marked as “Opinion” in the daily paper, and you usually got one of each slant in the same issue. Lawsuits were not the wingtip-delivered version of the lottery. Personal responsibility was not painted as the laughable forefather of plausible deniability, nor were the vicissitudes of fate compelling impetus for a financially motivated witch hunt.

But I digress.  My point is, if we reach more of the rank-and-file middle market consumers with compassionate concern and counsel about the benefits of our products and their unparalleled ability to mitigate misfortune—and further then help the bereaved to best position death benefit assets—wouldn’t we at least be able to gradually enter into the consciousness of the general public a reinforced differentiator regarding life insurance and the benefits it guarantees?  LIMRA indicates that the middle market is distinctly underserved and that the major factor behind record lows in individual policy ownership lies in that underserved market.  If ours is truly a benevolent business, we should be able to attract these like-minded Millennials. But the best way to impress upon them our sincerity and integrity might just be to lead by example—and dedicate time to help those most in need and yet individually…initially…financially least profitable. [SPH]

Before I begin, I must offer an apology and my heartfelt thanks to friend Bill Izor, Pan-American Life Insurance Group, for providing photos for the recent NBA and Insurance Designers meeting coverage.  I thoughtlessly left out much deserved thanks and photo credit in those coverages.  Thank you Bill!! [SPH]

I believe in charitable giving.  In this issue alone there is a news release from Allianz outlining $260,000 in grants to support financial literacy programs teaching money management, providing asset-building initiatives, and offering financial resources.  Over the last seven years, the Allianz Life grant program has distributed more than $1.8 million to such organizations.  Also in this issue is an article by friend Brad Gordon on Simple Charitable Life Insurance—transferring otherwise taxable assets into a much larger tax-free pot of money with a specific task of improving humanity in a manner the designate desires and instructs.  In the past I’ve featured special articles relaying the charitable giving efforts of several carriers and include free advertising for two charities in which I have a personal interest.  I include the wonderful Brokers’ Service Marketing Group’s golf tournament in every November issue because they should be an example to us all.  BSMG uses their primary annual producer event to raise money for local charities—$44,000 last year and well over $1 million over the past 16 years. Bravo!  My mission in providing these articles is to offer a few arrows for producers to use to shoot down the media-enhanced misconception that the insurance industry as a whole is just a money gobbling heartless behemoth.

As most of us I’m sure do, I donate money to causes that move me—in my case pet and wild animal rescue organizations, recovery and veterans causes, and the NAILBA Charitable Foundation which has granted millions to charities working with disadvantaged children. And, I confess, I feel like a douche when I pass a red kettle without stuffing a few bucks in.  Though I’m not a hoarder per se, (although one might argue if you saw the one criminally disorganized room in our house—okay, two), I certainly have countless items that could, and periodically do, go to charitable organizations for resale to benefit organizations serving the less fortunate—and I get receipts for my taxes.  Therein lies the perhaps assailable paradox.  Am I “profiting” by giving unwanted or unneeded items away?  What about the (blessed) rationalization that an item will immediately help someone in need—versus the idea that I plan on losing the 20 pounds needed for it to fit again, or will certainly find a good use for it in the future, or it has some nebulous emotional strings attached…  The donation nudge has proved invaluable in keeping my house from bursting at the seams.  And donating adds a spark to so many more days than just April 15th.

So let’s put to rest the snipe that the more fortunate—individuals and institutions—”only” donate for a tax write off.  The elephant (and donkey) in the room is that you have a choice—donate to the charitable organizations to which you feel so moved, or let the government “donate” for you.  I choose to donate to organizations that have a bit less overhead than the Federal Government.  They force enough donations on my behalf already.

So what about time?  Actions speak louder than words—unless perhaps you’re one of the dozens of people I fleece for the Charitable Foundation at the annual NAILBA meeting.  We don’t write off the time we donate to our causes, personally or professionally.  And now the clumsy segue:  September is Life Insurance Awareness Month and our industry is falling behind in getting people much needed protection.  The fact that our industry faces a nearly 60 year low in the percentage of people owning individual life insurance says to me that many of those in greatest need are those being underserved.  What a great way to use your God-given gifts to benefit those less fortunate.  We all know that commissions on $100,000 and $250,000 term face amounts are break even at best. Doesn’t change the fact that they can be a true godsend to the vast majority of families facing the tragedy of losing a breadwinner.  Shouldn’t we work harder on that?  If there were 1000 more lower middle class widows tearfully thankful for those death benefit checks. Or 10,000.  Or 1 million.  Or 10 million.  Would that change the perception of our industry in the demographic most vulnerable to be influenced by our naysayers?  The Life Happens folks can help you (www.lifehappens.org).

I’ve never sold an insurance policy, but I’ve been present when bigger checks were delivered to a widow already financially fortunate. I’ve also been present when two smaller checks were delivered to a grieving widow much less fortunate and at wit’s end about how to make ends meet.  I don’t know how many more widow’s checks it will take to change public perception of our industry.  But I bet it only took one to change you.  God bless you.[SPH]

Brokerage Marketing Opportunities should bring to mind myriad possibilities, some of which are explored here either in Focus, General Interest or Monthly Commentary.  Life insurance for foreign nationals, niche marketing of products domestic carriers often don’t provide, encouragement for long term care protection needs, benefits and same-sex couples, Fiduciary Rule opportunities, life insurance for HIV patients, disability income and more.  The Market Update explores the worksite, both voluntary benefits and our 2017 Analysis Of Worksite LTC Insurance thanks to the great folks at Milliman, Inc. and the diligence of Claude Thau.

Though the modern day soap box certainly won’t support my weight and I lack even the most rudimentary semblance of rhythm making drum beats at best an annoyance to all within earshot (yes, I’m the concert guy who can’t stay on the clapping beat urged at least once nightly by most performers of my generation), I find no lack of causes, real and perhaps sometimes imagined, to blather about on this page.  The very real need for more disability income involvement on both the carrier and producer fronts.  The unstoppable maelstrom of impending long term care need and many producers’ seemingly pugilistic resistance to approach consumers about this need to persuade (beg, coerce, scare, shame, Vulcan mind-meld) them to develop a long term care plan despite the wealth of planning options for all stages of health and/or need immediacy.  The idiocy of imagining that political self interest can be wrapped in sugarcoated grandstanding and defy proven health insurance industry risk-spreading practices without an astronomical cost to taxpayers. And don’t get me started on government intrusion into the life and annuity markets to line the pockets of countless bureaucratic cronies and vultures…errr…selfless servants of downtrodden plaintiffs.

With the impending arrival of September’s Life Insurance Awareness Month (LIAM) it seems fitting to focus at least one of the larger fragments of my attention on life insurance and America’s uninsured and underinsured.  Credit goes to LIMRA for over 100 years of service to our industry, but specifically for their Facts About Life PDFs. LIMRA, in cooperation with Life Happens, offers Facts About Life annually to be used as a resource for LIAM.

In 2016 there were nearly 5 million more U.S. households that have life insurance coverage, compared with 2010 results, but 30 percent of households (37.5 million) remained uninsured. There were 3.1 million more households with individual life insurance than in 2010, but individual life insurance market penetration remained steady. Only 44 percent of U.S. households had individual life insurance, equal to the 50-year low set in 2010. Of those families who had no life insurance coverage, 73 percent recognized they needed life insurance and 62 percent said they would be in immediate financial trouble if a primary wage earner died.

Using their Life Insurance Needs Model, LIMRA estimates that 48 percent of households  have a life insurance coverage gap of $200,000 on average, which amounts to more than $12 trillion in total market need. Sixty million families. Overall, 70 percent of all households said they would have trouble covering everyday living expenses after several months if the primary wage earner died.

Eight in 10 households who believe they need more life insurance say they don’t buy because of other financial priorities. Or they can’t afford it. But prior research shows that, on average, people estimate life insurance to cost three times what it actually does. Six in 10 say they don’t know what to buy or how much they need. One of the biggest obstacles perceived is lack of information.  But here’s a truly crucial fact: More households who believe they need more life insurance say the reason they haven’t purchased is because they haven’t been approached by a financial professional.

Approximately 50 million households recognize they need more life insurance.  Almost half of U.S. households say they are likely to buy life insurance in the next 12 months. More than one-third of married couples with dependent children want to speak with a financial professional about their life insurance needs. Across all age groups and income levels, insured households said they want to review their life insurance coverage annually. And, the majority of households said they were more likely to buy when advised by a trusted financial professional.

So whaddawe do?  The ever increasing average age of the insurance agent indicates that “new” producers are not replacing retiring ones at the same (or a greater) rate, and yet the U.S. population continues to increase.  But it occurs to me the problem is more multifaceted than just salesforce numbers.  I seriously doubt that many producers refuse to help prospects who come to them for $100,000 or $250,000 face amount policies, even term insurance.  But my question to you is, how diligently do you actually seek out those prospects whose initial purchases are on the low end of the commission spectrum?  Let me be absolutely clear that I see no evil, or ethical conundrum, in helping high net worth families with financial plans.  I happen to believe that the majority of those helped in this manner significantly benefit society through diligent philanthropy as well as legacy bequests.

But what about the future widows who represent the significant decline in life insurance coverage adequacy for U.S. households—coverage to replace the lost paychecks of a primary breadwinner—which has dropped to an average of only three years worth of normal income, far lower than most industry recommendations.  Or those families with no life insurance at all.  Your unique skill sets and knowledge of the industry could have an astronomical impact on their lives.  And their gratitude, in time of greatest need, on yours.  Please use your creativity, the contacts in your client list, and the wealth of resources available at www.lifehappens.org to find ways and time to help more of them.[SPH]

Trapped in the summer DOLdrums and facing a blank page to be necessarily converted to black and white for a July Life Insurance issue, my mind skitters across the insurance landscape peering into various sinkholes legislators and their JD-sporting country club cronies would have us believe are well stocked, exquisitely equipped storm shelters for the benign protection of the overwhelming majority of American consumers—the intellectually unprotected masses.  If you can ignore the underlying assumption that insurance agents and brokers are predominantly morally reprehensible opportunists devoid of any compassion for their fellow man, you might take a minute to puff out your chest at the implied compliment that you are possessed of a so vastly superior intelligence.

So what’s the big deal?  The DOL Fiduciary Rule as it applies to life insurance affects the sale of certain products to retirement plans, and the use of qualified plan dollars or IRA distributions to fund life insurance purchases. So either take the completely unambiguous, starkly black and white, (and fairly, reliably and reasonably adjudicated in case of conflict) steps necessary to be compliant, or simply avoid sales that might involve qualified plan or IRA dollars. Simple.  If your practice thrives on these dollars, just sell something else to someone else.  Forget about those you help daily, the government has decided to remove that weighty obligation from you—enjoy your freedom!

Sarcasm aside, my fear is exactly that.  Some sources place the average age of the insurance agent in 2015 at 59.  One study placed almost 20 percent of agency principals at 66 or older.  At what point does one decide that, by the grace of God, a nice living has been made and a comfortable retirement funded by decades of ethical, dutiful service to families young and old, those of modest means and those more fortunate, and that continuing to serve in the face of yet another bureaucratic roadblock just isn’t worth the headache?

Further, my personal opinion is that if you don’t see the Fiduciary Rule as the camel’s nose under the tent, then you are DOLusional.  Annuities are already in the crosshairs and the SEC is considering proposing their own set of fiduciary rules to impose further muddying the water. The SEC is in favor of non-governmental third party examinations of advisors. FINRA would be an example of such a third party—those great folks who’ve repeatedly turned a blind eye to folks who’ve Madoff with billions of investor dollars.  Placing the complaint adjudication of the DOL Rule (and it’s incestuous successors) in the hands of a flawed tort system has the potential to turn virtually any permanent life insurance or annuity sale into a Powerball win for a “best plaintiff’s law firm.”

Investment in non-guaranteed products such as securities, mutual funds and many variable products has inherent risk.  Those who haven’t the capacity to understand that should have their checkbooks confiscated.  That the court system has established a precedent of vaguely plausible deniability in regard to personal responsibility is a plague on our industry as well as many others. Perhaps we should blame it on Starbucks—until the invention of the Frappuccino, all fresh coffee was universally assumed to be HOT.

But don’t waste your prayers on Congress forcing the court system to materially distance itself from the lottery through tort reform any time soon. In the 115th Congress, 167 members of the House and 55 Senators hold law degrees. (In contrast, 21 state their occupation as insurance agents or executives—four senators and 17 representatives. I’m astounded that it was that many quite frankly.)

But we share the blame for the public and legislative view that insurance companies are institutions hoarding an endless supply of cash ripe for judicially approved grand larceny.  Consumer advertising focused on wealth management and implying lofty financial security shifts perception away from companies that keep widows and children out of shelters, keep alive dreams of further education and allow caring compassionate people to leave behind a legacy for the benefit of their less fortunate fellows. The industry is much more than a deep water harbor for the ultra-wealthy to park yachts bequeathed to their shallow offspring. But we as an industry, both in advertising and in “boots on the ground,” need to reach out to many more of those whose premiums don’t buy Lamborghinis.  We need to redouble our efforts to produce and hand deliver checks that keep widows in their homes and children on a path to higher education.[SPH]

The June issue has historically offered a perspective and focus on health insurance, and related ancillary products, for several reasons, not least among them the annual meeting of the National Association of Health Underwriters. Broker World has supported the efforts of NAHU and their intrepid membership for the majority of our existence and will continue to do so.  Many of my earliest and best friendships were forged on the health insurance side of the business and furthered by involvement with the Brokers Health Insurance Network, Inc. (BHINI) and the National Association of Insurance Marketers (NAIM).  But today there aren’t nearly enough health insurance companies able to advertise nationally (or willing to write) to allow a Health Insurance issue.

I remember the prosperity of the MET days and have watched as, little by little, these friends either evolved or got out of the business.  I remember with glee the triumph of our industry over Hillarycare (and I’m still tickled she failed), ignorant in that moment of the eventual malignancy of state by state legislation that would eviscerate health insurers’ ability to offer affordable nationwide coverage or even its semblance, fuel industry-wide rate increases and erode, state by state, consumers’ confidence in and general acceptance of the health insurance industry.  It took twenty years, but eventually spawned Obamacare. 

And now the health insurance landscape is once again less certain—due to the malicious legislative efforts of the conservative majority to rob the past POTUS of his legacy of having masterminded the most undeniably brilliant and glorious act of compassionate achievement in the history of our great nation and, in the process, sadistically deprive hundreds of millions of Americans of their God-given right to easily affordable healthcare at the expense of the robber barons of the health insurance industry.

Ain’t the mainstream media great?  Even my local Fox affiliate, in coverage of town hall meetings with any conservative legislator, airs, predominantly, the angry voices of the uninformed and portrays them as prescient crusaders for the overwhelming majority of actual and potential (and imaginary) health care consumers.  Seldom, though I strain my ears, have I heard the faintest whispers of surprisingly high double- or even triple-digit rate increases within exchanges—almost like that sound you thought you heard but couldn’t quite be sure…  Nowhere (outside of industry outlets) has the suggestion of unfulfilled government commitments to insurers been examined or reported. News of insurers exiting exchanges is subtly shaded to imply a lack of concern for consumers as much as, if not more than, any failing of the system.  Any rational explanation of the necessary principles involved in effectively spreading risk, if even aired, seem to be smirkingly dismissed as the nonsensical prattling of a child’s made up language until the ultimate blasphemy is uttered—profit!—and then righteous indignation reigns. National deficit concerns are at worst temporary annoyances until adjustments can be made to justifiably make some or all one percenters foot the bill.

I remember the one shining moment of my direct encounter with the Occupy movement—that of a pair of colorfully coiffed teenty-somethings exiting an Escalade and armpitting their protest signs to text their downtrodden comrades from their iPhones.  But I digress.

I commend those legislators fiscally aware enough to recognize the need to replace Obamacare and stalwart enough to trudge that media-demonized path. There are easily defensible compassionate reasons to retain the rationally humane parts of the current legislation including, specifically, the prohibition of denying, discriminating against or charging higher rates to any individual on the basis of preexisting conditions.  But it’s ridiculously obtuse for legislators, and to an equal extent the media if not the general public, to enthusiastically embrace crowdfunding/GoFundMe pages as Nobel-worthy epiphanies and deliberately avoid any meaningful examination of managing risk and actuarial science.

And nowhere in any discussion is allowed the politically incorrect concern for ethical insurance professionals whose livelihoods have been disrupted, though they span all ethnic groups and number in the hundreds of thousands.  I applaud each of you who continues to help your clients navigate the labyrinth of the geometrically oxymoronic Affordable Care Act (for a fraction of reasonable compensation) and who continue to provide value through ancillary products and cross-marketing of disability income, long term care protection and other insurance products both in and not-yet-in the crosshairs of those intent on bloatedly mandating further “consumer protection.”

As an American, an employer still somehow offering private insurance to his employees (thank you UnitedHealthcare), a healthcare consumer, an enthusiastic believer in the societal blessing our industry offers to consumers, and a proud political conservative—dammit, Republican!—I pray that Repeal and Replace considers actuarial science and responsible risk-spreading principles as something more than our industry’s selfish disambiguation.[SPH]

As the result of an exhausting and extensive personal inventory (and intense clandestine investigation of my wife) I must here publicly confess that both Hope and I have a bit of a selfish streak when it comes to people we love.  The evidence is clear beyond a reasonable doubt: At a time when we should be encouraging and excited for a very dear friend as he embarks on a new chapter in his life, both she and I are mired in self pity over the fact that our path will most likely cross his much less frequently.

Jack Chiasson, CEO of the National Association of Independent Life Brokerage Agencies (NAILBA), recently announced his retirement from the organization, effective May 31—an action that represents a poignant loss for the brokerage industry’s most influential association and a source of selfish sadness for those who know him well and will miss his bright smile and witty repartee at the NAILBA annual meetings and any number of future industry events.

Jack joined NAILBA in 2004 as the director of meetings and conventions and has served as the chief staff officer since 2007, first as executive director and since 2012 as NAILBA’s CEO.  He has also served as the CEO of the NAILBA Charitable Foundation.  Prior to NAILBA Jack served in leadership positions at the United Way of America, the National Association of Broadcasters, the Association Management Group, and the Public Risk Management Association.

In a letter to the NAILBA Board of Directors, Jack noted that, “NAILBA has never been ‘just a job’ for me,” and concluded, “My work here has been the highlight of my career. I have enjoyed working with an outstanding staff and amazing volunteer leaders to move the organization forward.”

Ray Phillips, CLU, LTCP, a past NAILBA chairman and president of The Brokers Source, Ltd., Pittsburgh, PA, offers this: “The longer I was active on the NAILBA board, the smarter Jack got.   While we disagreed on many subjects, we were never disagreeable.  I knew that Jack always had a “NAILBA-first” focus.  He gave me many new insights and appreciations.  I have a great deal of respect for Jack and what he did for the association and for me.”

I’ve had the distinct pleasure of working with Jack on one committee or another for most of the 13 years he has been with NAILBA, and I fear that his knowledge of, and passion for, the organization and its bylaws, mission, responsibilities, opportunities and relationships will prove a great challenge to replace.  Countless times in meetings or on conference calls I’ve witnessed Jack’s professionalism, insight and keen sense of order refocus the group as it strayed off target.  Many and frequent were his selfless contributions and significant accomplishments for the greater good of NAILBA and the NAILBA Charitable Foundation.

In addition to his work at NAILBA, Jack is a passionate advocate for animal rescue. He volunteered for years at a non-profit, no-kill animal shelter in Northern Virginia and is currently “dad” to his fifth rescue dog.  Yet another reason to love the man.

Although the NAILBA office is in Fairfax, VA, and not in the “heart” of our nation’s capital, I must be candid:  I detest Washington DC.  Whenever I think of it I am reminded of the Alec Guinness quote from Star Wars about Mos Eisley spaceport: “You will never find a more wretched hive of scum and villainy.”  But even though Jack may be Obi-Wan, and although the wonderful staff he gathered is like a band of Jedi knights in their own right, I’m about as close to Luke Skywalker (or Han Solo) as chicken salad is to chicken…seed. (Hope, on the other hand, has many Leia-like qualities—courage, determination and optimism to name just a few.)  While I can’t see my untreated political cynicism allowing us to trek to the DC area voluntarily, if anything could draw us there it would be the prospect of another delightful visit and meal with our dear friend Jack Chiasson.  Jack, Hope and I wish you our heartfelt best in your life after NAILBA but we miss you already.  May the Force be with you! [SPH]