State Of The Disability Insurance Market In The United States: Trends, Growth, And Outlook

The U.S. disability insurance market continues to evolve, driven by demographic shifts, technological advancements, and changing economic conditions. Over the past five years, growth in sales across individual, Guaranteed Standard Issue (GSI), and business disability coverages has demonstrated both resilience and adaptability. Leveraging data from Milliman, LIMRA, and industry leaders, this article explores key trends, economic impacts, and market projections for the next 12 months.

Growth in Sales: A Five-Year Snapshot

Individual Disability Insurance
Individual disability insurance (IDI) remains a cornerstone of the market, with steady growth over the past five years.

• According to LIMRA, IDI sales premiums increased at an average annual growth rate of six percent between 2018 and 2024.
• In 2024, total IDI premiums exceeded $5.4 billion, driven by rising awareness of income protection needs among high-income earners and self-employed professionals.

Guaranteed Standard Issue (GSI) Disability Insurance
The GSI market has also grown significantly, as employers increasingly offer disability benefits to attract and retain talent.

• GSI premiums have experienced a four percent annual growth over the past five years, reaching $460 million in 2023 (Milliman).
• Employer-paid GSI plans continue to dominate, although employee-paid premiums now account for nearly 60 percent of the market.

Business Disability Insurance
Business-focused products, such as key-person disability insurance and business overhead expense policies are gaining traction.

• Sales of business disability products have risen by an estimated eight percent annually over the last five years, reflecting the growing recognition of the financial risks associated with employee disabilities in small and medium-sized enterprises.
• Simplified underwriting and higher issue limits have made these products more accessible for business owners.

High-Limit Coverage
Petersen International Underwriters, a leader in high-limit disability insurance, has observed increased participation and issue limits among domestic carriers. This trend reflects growing demand for higher limits of coverage, particularly for high-income professionals seeking coverage beyond traditional limits. While the domestic markets are increasing their limits in many areas, there is still the need for excess coverage in many other places.

Technological Innovations Transforming the Market
Technological advancements are reshaping how disability insurance is sold and underwritten:

• Digital Application Platforms: Petersen International Underwriters has launched online platforms for personal and business disability programs. This mirrors many of the domestic markets approach as well.
• Simplified Underwriting: Many carriers, including Petersen, are adopting streamlined underwriting protocols. Exams and labs are no longer required for a significant portion of disability applications, reducing friction for applicants and accelerating policy issuance.

Economic Impact on Sales (2023-2024)

Past 12 Months
The economic landscape over the past year has presented challenges for the disability insurance market:

• Inflationary Pressures: Rising costs have stretched household budgets, leading some consumers to deprioritize discretionary expenses, including supplemental disability coverage.
• Employment Trends: While low unemployment rates have supported group disability sales, wage stagnation in certain sectors has dampened individual disability policy growth.

Next 12 Months
Looking ahead, the market is poised for recovery and expansion:

• Increased Awareness: Economic uncertainty has heightened awareness of the need for income protection, which is expected to drive sales growth in both individual and business disability lines.
• Higher Limits: Domestic carriers have increased issue and participation limits in many occupations, but still need to utilize higher limits in many cases.
• Unique Occupations: The domestic markets have embraced some traditionally difficult to insure occupations such as Influencers and Remote workers, but there is still a very strong need for the specialty disability markets to fill in gaps for higher incomes and other unique occupations.
• Enhanced Accessibility: Simplified underwriting and digital platforms are likely to accelerate policy adoption, particularly among younger, tech-savvy consumers.

Market Outlook: 2025 and Beyond
The U.S. disability insurance market is expected to continue its upward trajectory, supported by:

• Aging Workforce: As the workforce ages, disability risks rise increasing demand for coverage.
• Evolving Employer Benefits: Employers are likely to expand disability offerings, particularly through GSI plans, as part of competitive benefits packages.
• Innovation and Efficiency: Advances in digital technology and underwriting practices will streamline the application process and broaden the market’s reach.

Conclusion
The U.S. disability insurance market is adapting to economic challenges and leveraging technological advancements to drive growth. With strong performance in individual, GSI, and business segments, as well as increased participation limits and simplified underwriting protocols, the outlook for 2025 is optimistic. Industry players like Petersen International Underwriters are leading the charge by enhancing accessibility and innovating their offerings, setting the stage for a dynamic and customer-focused future.

By addressing the evolving needs of individuals and businesses, the disability insurance market remains a critical pillar of financial security for millions of Americans.[TP]

“It don’t come easy
You know it don’t come easy
Got to pay your dues if you wanna sing the blues
And you know it don’t come easy.”
—Ringo Starr

This time of year, I find myself singing this tune as, like many in our industry, I work through the challenges of goal setting, performance management, and project planning. I also use it as a time to reflect on what I’ve accomplished and how I can leverage what I’ve learned in the future.

That means I’m evaluating a recent corporate acquisition. In 2024, Mutual Trust Life Solutions, a Pan-American Life Insurance Group division, completed the integration of Encova Life, and all former Encova Life products were discontinued. As head of sales, it’s my job to figure out what opportunities that creates for clients, distributors, and products.

New product offering to fill portfolio gaps—and generational niches
Considering the discontinued Encova product line encouraged us to look at our existing product offerings and the general market and identify gaps we could fill. This led us to expand our portfolio and create a non-participating whole life product, which we think will resonate currently with key segments looking for simplicity and guarantees.

One of the most common types of whole life, non-par whole life is designed to appeal to clients seeking affordable permanent coverage with guaranteed premiums, cash value, and death benefits. As a non-participating policy, it’s easy to explain to clients. When the policy is in force, there’s no need to follow dividend-paying performance since the policy is fully guaranteed.

Consider these client scenarios:

• Stepping-Stone Solution: For clients who need permanent coverage but can afford or are only interested in term insurance. This could resonate with Millennials (born 1981-1996) who may have family protection needs but face high living costs, student debt, and childcare.
• Entry-Level Solution: For clients on a limited budget who appreciate the benefits of a permanent policy and can start with a small permanent base and a term rider to keep coverage costs down. Gen Z (born 1997-2012) clients could be a good fit here, as they are just starting out and likely on a limited income and show an interest in financial stability and planning.
• Cost-Effective Planning: For clients who understand and appreciate the benefits of traditional whole life and are unable or uninterested in exploring the more complex and costly features of guaranteed universal life products. Consider this for middle-income Millennials, Gen X (born 1965-1980), and Boomers (born 1946-1964) to provide solutions to protect growing families during their prime working years and offer benefits for their grandchildren.
• Hispanic Market: Many customers in the diverse U.S. Hispanic market are a fit for this solution. This market has and will continue to experience explosive population growth yet lags in overall insurance ownership. Using an easy-to-understand, non-par whole life can be a gateway to owning the full spectrum of life insurance solutions.

Regularly looking at generational niches can open our eyes to underserved segments and support financial advisors in developing flexible and customized solutions to meet new and changing needs, quickly responding to economic conditions and trends. For example, our non-par product starts with a minimum face amount of just $25,000. This entry-level scenario can solve for a final expense need, which often makes for an easier sale, versus the leave-a-legacy approach of larger face amount policies that turn off some clients. On the flip side, with issue ages up to 80 and an assortment of riders and benefits, the product can also be used to support end-of-life family or charitable gifting solutions.[LC]

Raising The Bar In 2025

Customer-centric growth has been a hallmark of Mutual of Omaha’s story for 115 years. As we look to the future, our purpose to help our customers protect what they care about and achieve their financial goals is as relevant as ever.

We’re operating in an uncertain and complicated world where financial security is increasingly our customers’ personal responsibility. Mutual of Omaha partners with trusted brokers to come alongside those customers and lighten their burden by helping them navigate uncertainty, protect what’s most important and improve their financial well-being.

Guided by a Clear Plan
Mutual of Omaha continually monitors and strategically responds to the many external dynamics affecting the insurance industry. Key dynamics such as declining interest rates, decreased consumer discretionary spending, regulatory changes and rapidly evolving technologies are important considerations for our business, and we are well prepared to succeed in this complex environment.

We remain committed to exceeding the expectations of our customers and sales partners and are raising the bar on providing an outstanding, seamless experience–now and in the future.

Here are some of the ways we delivered on this commitment in 2024:

Senior Health

• We released several improvements to our Medicare Solutions e-App storefront, making it easier to cross-sell Medicare supplement and dental insurance.
  • There’s no longer a requirement to include medication information on Med supp applications.
  • Customers only need to sign once, even when submitting applications for both Med supp and dental policies.
• Our underwriting team auto-decisioned over 70 percent of Medicare supplement underwritten applications, resulting in decisions in less than three minutes.
• We enhanced our dental insurance benefits in most states, offering a no-wait period, immediate coverage for major services and maximum benefit options up to $5,000.

Life, Annuities and Supplemental Health

• We increased the auto pedestrian benefit on our accidental death insurance product from 25 percent to 50 percent at no additional cost.
• Our new underwriting program allows customers to bypass the initial paramed exam for higher face amounts of life insurance if they had a qualifying physical exam in the last 12-18 months.
• We launched a text message signature option to offer more convenience to our customers and brokers.
• We created an automated signed illustration process at the time of sale to streamline this experience.

Looking Ahead to 2025

In 2025, we’ll continue our work to meet the evolving needs of brokers and customers. Here are a few areas of focus:

Senior Health

• We will continue to offer competitively priced Med supp and dental solutions to customers.
• We will explore new value-add options for our Med supp and dental insurance to support our customers’ well-being.
• We will continue to provide superior customer service to our policyholders.
• We will deliver an exceptional experience that delights our brokers and cultivates repeat business.

Life, Annuities and Supplemental Health

• We will launch a fixed index annuity (FIA) product with a performance trigger to expand the annuity options available to our customers.
• We will continue to offer competitively priced IUL plans and evaluate marketplace positioning to bring you and your clients the most valuable IUL products.
• We will continue to focus on enhancements and competitive pricing for our simplified issue portfolio.
• We will introduce e-delivery on our IULE product and continue to enhance our e-application platform and e-signature process for additional product lines.
• We will continue offering our strong stand-alone long term care products.
• We will expand and improve our digital capabilities to provide convenient options for our sales partners and customers.

Thank you for your ongoing collaboration to help us deliver on our promises to our customers. We appreciate the trust you place in us and strive to be your carrier of choice in 2025 and beyond.[RM] [JD]

Digital Turning Point For The Insurance Industry

Throughout my nearly three decades working with insurance, wealth management, and financial services technology, I’ve witnessed many transformations, but none as significant as what we’re experiencing today. Meeting with carriers and distributors across the country, I see firsthand how digital innovation is redefining our industry.

Twenty-five years ago, Y2K forced companies to update outdated systems to prevent widespread system failures when computer clocks rolled over to the year 2000. That massive technology investment taught our industry valuable lessons about adaptation and change.

Companies need technology to match their unique short-term needs while also giving them flexibility to adapt and succeed in the long run. In my visits with our clients nationwide, I see them achieving results that were impossible just a few years ago.

What excites me most is seeing our clients transform their businesses in ways they never imagined possible. Modern sales platforms process applications faster, help firms reach new markets, and provide superior client service.

As paper forms become a relic, modern solutions create new opportunities across the industry. From small agencies to large carriers, each firm can now shape its own path forward. It’s redefining how we operate and how we think about insurance.

The most encouraging part of this transformation is seeing how our clients use technology to strengthen their relationships with their clients while expanding their reach. In my experience, the most successful companies have been those willing to embrace change while maintaining their focus on relationships.

The financial landscape keeps changing. Interest rates shift while new regulations emerge. Advisors and consumers want faster service in our modernized world. To stay competitive, adaptable technology has become essential to support evolving business needs while delivering lasting value. This digital shift is unlocking new opportunities for our clients while enhancing the way they engage with their clients.

Digital Transformation Impact
Today’s transformation goes beyond system updates. Digital processing has redefined policy delivery, from initial applications to in-force servicing. It’s enhancing accuracy while enabling faster submissions and more efficient policy management.

Digital-first operations help carriers unlock new market opportunities. They transform how carriers deliver products and services. Carriers seek new ways to work with distributors to bring products to market faster. Brokers want easy access to multiple carriers and products. This helps them stay competitive as the industry evolves.

Distributors want platforms that work their way. They seek platforms that adapt to their specific business needs. The real breakthrough is how modern platforms bring everything together.

They combine life insurance, annuities, and other financial products in one system in support of complete wealth management. Modern platforms bring streamlined processes, and these improvements enhance customer experiences and drive business growth.

Optimized Technology
Customization has become a critical driver of success. Companies are no longer confined by rigid, one-size-fits-all solutions. Instead, they can tailor technology to match how they work. This flexibility helps them to adapt quickly to new opportunities and evolving market changes.

Working directly with our clients, I’ve witnessed how this control over their processes energizes their teams. Companies now have direct control over their product management, workflows, and business processes. This marks a major step forward. They can create and manage their own business and sales processes with tools that match their exact needs.

This independence frees them from waiting on vendors for changes. The results are significant. Product launches happen faster. Business rules flow better. Companies can now handle updates and compliance needs in an instant.

New Markets
Modern tools have opened doors to markets we couldn’t reach before. Technology lets us create specific solutions for different groups—from young buyers who want quick online service to older clients who need more personal help.

Current insurance buyers want digital options but still value expert advice. As an industry we can deliver both, while keeping the personal connections that make insurance sales work.

Carriers and distributors report happier clients thanks to advanced processes and instant access to information. These improvements help them serve clients better while growing their business.

Hexure’s Industry Leadership
Hexure is at the forefront of the industry’s digital-first transformation, leading the way with our FireLight platform. I’m particularly proud of how FireLight has evolved to meet our clients’ changing needs. The platform digitizes the sales process of multiple lines of business and products in a single unified experience. The integration of sales activities simplifies the end-to-end workflow, reducing application processing times, speeding up policy issuance, increasing in-good-order submissions, and supporting holistic sales.

FireLight’s API technology connects insurance products and services to advisor portals, CRM systems, planning tools, and other third-party solutions. Carriers can effectively distribute products broadly, while distributors create custom systems tailored to their brand and workflows.

Each firm gains complete control over the entire sales process and overall user experience. By centralizing everything in one platform, FireLight simplifies work for advisors and enhances client experiences.

Moving Forward
Like Y2K, today’s digital changes reach beyond technology. It’s reshaping how insurance is sold and serviced. The future belongs to those who adopt flexible and robust platforms designed to support and manage their unique operational and sales strategies.

This evolution empowers carriers and distributors with the tools they need to succeed. By embracing new technology while focusing on relationships, we create a more connected insurance ecosystem.

The path forward needs bold action and fresh thinking. The changes we are making now will shape insurance sales for years to come. Collaboration is essential to driving these changes forward. Together, we can improve the client experience and make our industry stronger.

I’ve never been more optimistic about our industry’s future. The transformation we’re leading today will create opportunities we haven’t yet imagined. I’m personally committed to ensuring Hexure continues developing solutions that help our clients thrive in this digital era while maintaining the relationships that make our industry special.[KP]

My Thoughts About 2025

As an Independent Marketing Organization, I have never been more excited than I am now to be in this business. What is “this business?” Helping our agents help their clients with annuities, life insurance, and long term care.

Today the oldest baby boomer is 79 years old and the youngest is 61. Yes, I know! Another baby boomer statistic! Every time I hear the tired statistics of a baby boomer hitting retirement age every X minutes, I am reminded of the story of the Irish band, U2, playing in Dublin. Their lead singer, Bono, stopped the show and started clapping very slowly and firmly. He then emotionally yelled to the crowd, “Every time I clap my hands, there is a child in Africa that dies.” At that point somebody yelled from the crowd, “Then stop clapping your damned hands!”

Although I poke fun at the constant baby boomer statistics we hear, there is merit to it and I see it every day. The number of 401k/IRA/CD/etc. transfers is much more prominent than I have ever seen. Furthermore, the dollar amounts are larger than I have ever seen. Reading statistics in the news is one thing, but actually experiencing the statistics is eye opening. I am witnessing the “opportunity snowball” getting bigger and bigger as time goes by!

The wealth that is moving around is huge! Baby boomers own over 50 percent of our country’s wealth: $80 trillion. With annuity sales, I remember when $100,000 in an annuity was a decent case! Now that is well below the industry average FIA sale. The annuity industry had its third consecutive record-breaking year with sales well over $400 billion! With long term care sales, I used to be paranoid while presenting a $20,000 per year long term care premium to a client, thinking they would pepper spray me after hearing the number. Then, I realized that many times they understand the long term care risk and therefore don’t blink an eye with that size of premium. What about life insurance? I don’t need to tell you that life insurance is one of the most efficient ways for these baby boomers to pass on wealth and offset taxes for the next generation.

Offering the above three product lines, annuities, life insurance, and long term care should excite you today! These three products can be viewed as helping your clients in chronological order:

• Stage 1, Annuities: The annuity helps them once they hit the “retirement red zone” to protect their money and/or guarantee a lifetime payment stream.
• Stage 2, Long Term Care: Later in life there is a 7 in 10 probability you will have a long term care event. Whether the client has non-qualified money or is all “qualified” there are solutions available to leverage those dollars.
• Stage 3, Life Insurance: Passing on a tax-free death benefit to the next generation.

I also look at the baby boomer statistic (10,000 baby boomers per day retiring) a little deeper. Many of those baby boomers retiring are also your competition, other agents! The average agent is over 60 years old. Some are retiring and some will stick around. For those sticking around, the opportunities are huge. All of this wealth moving around will be left to fewer advisors/agents to manage. This should be exciting if you don’t plan on retiring anytime soon.

With all of the above said, here are the opportunities in product as well as practice management that you can leverage:

1. Annuities: With where interest rates have gone, accumulation indexed annuities have S&P 500 caps in the double digits! For guaranteed income (GLWB) annuities, the payout rates have never been higher.
2. Long Term Care: Today over 90 percent of the long term care business is in the “hybrid” space. That is, annuities/LTC hybrid and life/LTC hybrid. Work with your IMO, like yours truly, to understand these awesome products. For instance, there is a product where you can move over qualified money into a hybrid long term care policy. How do we do that with pre-tax money? That is a conversation for another day.
3. Life Insurance: Carriers are getting much better with accelerated underwriting and the rest of the application process. This will continue to improve your experience and the client experience.
4. Technology: Related to #3 above, whether annuities, long term care, or life insurance, the E-App solutions that exist are fabulous and continue to get better! Doing away with paper apps can be a way to literally cut your time dealing with paperwork by 75 percent.
5. Volatility: I as well as many Wall Street money managers believe that 2025 is going to be a volatile year in the stock market. Volatile markets are almost always good for fixed and indexed annuity sales. Watch for the volatile markets and call your clients when they happen.
6. Seminars: Seminars are back after the COVID fiasco! My IMO is getting registrants to seminars for less than $25 per household. That means for $1,000, you should have 40-50 registrants! Gone are the days of buying pallets of “mailers” of which 99 percent will go in the trash! There are more efficient ways to market for seminars. CG Financial Group has mastered this process. Three seminars that are very popular are: Social Security, Long Term Care, and Estate Planning.
7. Virtual Meetings: The nation is now your playground, versus just your local area. Consumers are embracing Zoom calls more than they ever did. This means that you are no longer confined to just marketing in your local area. Learn best practices in selling virtually.
8. Planning Software and Processes: I believe that consumers like buying into “processes” more than “products.” In other words, if you have a process that the consumer can go through in various steps that incorporates software with nice visuals, you will build credibility and trust. Of course, the product is plugged into this process.
   Selling a product is often transactional. Selling a process is often consultative and nurturing. CG Financial Group has some remarkably successful agents that will walk a consumer through a process that takes five to eight meetings/calls. Sound tedious? Well, in the end, they are getting $1 million plus annuity sales quite consistently.
9. Social Media: In a world where social media “influencers” are becoming more prominent than Hollywood movie stars, why would you not leverage the same apps to be a financial “influencer?” By leveraging social media, you have the ability to market to millions of consumers, for free. Make videos. And while you make them, remember, perfection is the enemy of progress.
10. Work with your IMO: Many agents like to “go it alone” without realizing that a good IMO can help you in areas you never thought of. There is so much innovation taking place that what we all knew last year is almost outdated this year. Things are moving quickly. Work with your IMO to keep up to speed, and be coachable.

Fortunately, I am extremely optimistic as I see more opportunities in this environment than I do challenges. However, if I were to think of our next year and the challenges that may arise, I would point to a few areas:

1. Interest Rates: We have been spoiled lately, and I do not want us to go back to 2015-level caps and participation rates. However, it is always a relativity game. As in, annuities will almost always be higher than CDs.
2. Inflation: Everything is so dang expensive! For agents to stay in business, they need to be smart with their money, especially right now.
3. Regulations: New administration or not, our industry has always headed toward a more regulated and more litigious industry. So, take good notes in client meetings and get a CRM (Customer Relationship Management) System to keep track of correspondence.
4. Paperwork: Related to #3 above, paperwork with all three product lines (annuities, life, long term care) is only getting worse. As are the carriers’ requirements for the annuity suitability forms to be perfect… Again, e-applications can change your life!
5. Anti-Insurance Sentiment: With the recent killing of the United Healthcare CEO and also with many folks that were impacted by the California fires complaining about insurance companies, I am concerned about the reputation of “insurance” and “insurance companies.” We all need to continue to tell our success stories in order to offset the negative stories. [CG]

The Lloyd’s disability markets have had a few years of upheaval, primarily due to the international financial markets and low interest rates. For the past three years this insurance market has been pushing (kicking and screaming by many) with higher premiums and lower commissions, as well as more and more conservative terms and conditions in coverages.

As of 2023, these markets have finally slowed their big shifts in changes and become more stable and consistent. These changes have impacted all Lloyd’s Coverholders, which in turn, impact producers who sell excess and supplemental disability programs.

While these changes were happening some Coverholders early on had to adopt while others took an aggressive approach (contrary to market direction) and offered terms and conditions not seen before, such as individual policies with a 30-day cancellation clause. This allowed them to keep rates drastically lower. However, those offering the lesser quality wording are now facing the higher premiums the markets are demanding as well.

What does this all mean?

2024 and beyond are poised for more consistent and strong markets. Pricing is higher than three years ago, but so is the cost of a Big Mac! More stability of the markets also means less radical pricing and terms within the market.

Most standard disability carriers have increased their limits making the attachment point for excess disability insurance higher as well. Also, many carriers are now offering coverages to occupations which, historically, were not written, such as social media influencers and others that may actually work from home.

Does this mean fewer sales in the excess and special risk disability markets? Not at all! The Special risk disability programs from Lloyd’s address numerous situations which the standard disability carriers are unwilling to write. This may include occupations that are still “undesirable” as well as severe health issues (impaired risks), and there is still a need for layers over and above what is available for personal disability as well as business disability coverages.

Based upon a recent Milliman report, 45 percent of all disability sales are now written on a GSI basis. Top executives and professional occupations with high incomes still look to excess disability insurance also written on a GSI basis.

Bottom line, as rough and bouncy as 2020 to 2023 has been in these markets, these same markets are once again offering great products at reasonable (not cheap) prices with strong (not ultra-liberal) terms and conditions.[TP]

Embrace Challenges. Seize Opportunities.

The unique conditions of the last few years presented our industry with several unexpected challenges and, in some cases, strategic opportunities. Odds are, we’re not done yet. We expect 2024 to have its fair share of twists, turns and curveballs.

The good news is with every challenge comes an opportunity. We all have the chance to evolve with—and even help shape—the insurance industry next year and beyond. A lot of changes will happen. What matters is how we respond.

New and Persistent Challenges
The greatest challenge for BGAs and IMOs in 2024 will be friction. Specifically, the friction in the sales process for life insurance, annuities and wealth management products.

Consumers in our industry don’t want to buy. They want to be sold. Even in what may prove to be a challenging year for BGAs, you can find ways to deliver that sales process consumers are looking for. An experiential environment that reduces friction but still manages to create trust between advisor and client.

A significant portion of this industry continues to use paper processes. Paper is an extremely coarse interaction you have with the client. It’s more like sandpaper roughing up what could otherwise be a smooth experience. If you think about any other industry, from P&C to banking, most industries in the world have moved away from paper.

What really is challenging to brokers right now is being able to interact with their clientele in a way that meets their expectations—quickly, efficiently and digitally. That doesn’t involve slow and erroneous paper processes. Brokers need to be empowered to respond to skyrocketing client expectations. To offer a sales experience on par with what they get from other industries.

And, this will all need to be accomplished in an increasingly strict regulatory environment. It’s counterintuitive, but the very technology we rely on to improve our sales processes invites more rules and regulations into the equation. We’re seeing this with the expansion of some rules coming out of the government. They are trying to change the way annuities are documented. And, while we already have this wonderful process for illustrating and creating audit trails, they want more.

Real struggles are coming down the pipe, with rules and regulations becoming more stringent. With these added consumer protections, we need to ensure that the consumer is part of the conversation when it comes time to adapt our processes in response.

Create Your Own Opportunities
With all these challenges encroaching, there is still opportunity to be successful for firms with the vision to see it.

Imagine if your firm is the one who eliminates that friction in the sales process. What if you could provide a single pane of glass? A centralized, end-to-end digital experience? The contract sold and executed fully within one platform. You don’t have to jump around from system to system. Or worse, to paper.

You manage every part of the sale in that one system, which allows other opportunities such as instant issue sales. That’s something Hexure has offered through multiple carriers on our platform. And it looks a lot more like the modern sales experience clients expect.

Now, that won’t be the same for annuities. Annuity sales are more about building and maintaining that client relationship as a trusted financial advisor. But you can still include the client in the conversation.

You can even find opportunities with the increased regulations. It is an opportunity to better inform and educate the consumers of these products. A chance to build trust with your clients.

Trust is an inextricable part of sales in our industry. You might consider yourself a savvy investor, but nobody is going to drop $100,000 on an annuity using a mobile app. That’s just not going to happen. We all want to have that experience that when we hand over our money, we trust it is going into good hands.

What we at Hexure are working on is finding ways to, yes, enable clients to interact with this industry the way that they want. But keeping those guardrails in place so it’s still a very safe and secure world. We think that’s accomplished through education and visualization. Providing the visualization tools that help clients see what their investment looks like over time. And does it in a clear and understandable way.

Taking the Long View
I believe that this industry is going through a transformation. No one knows exactly where it’s going. But, we can be there asking the right questions. We can all be doing things today to prepare for the long term.

That philosophy is driving what Hexure is doing to help our clients prepare for the future. More specifically, we’re:

• Doubling down on our promise of providing an end-to-end digital sales process. Consumers expect it, which means advisors need it.
• Focusing on our roadmap to deliver curated experiences for every persona interacting with our platform—vendor, carrier, distributor, advisor.
• Using embedded APIs and an open-architecture strategy to avoid building a walled garden. We want to make the industry more efficient by breaking down barriers between systems. Legacy systems. Competing vendors. We don’t care. We want efficiency for carriers and distributors, and seamless experiences for advisors and consumers.
• Continuing to scale the benefits we deliver by bringing more features and functionality into the fold. The perfect example is our recent acquisition of Vive, which further enhances our ability to provide a single, comprehensive distribution platform.

Further enabling firms to empower their advisors with a true multi-carrier sales solution for all lines of business.

A Bright Future
The last few years have brought their challenges, and 2024 will be no different. Don’t let that stop you from being optimistic about the future. Take the steps today that will make you more resilient tomorrow, and you can find opportunities in any situation. [LR]

Creating an Even Better Broker And Customer Experience In 2024

For 114 years, Mutual of Omaha has defined success by our ability to help people address their financial needs. Working with brokers, we have evolved to meet customers’ changing needs over generations, innovating and expanding into new markets to continue growing and serving even more people.

As many of our brokers know, serving clients in the current environment isn’t without its challenges. Inflation and interest rates remain high, contributing to increased expenses and reduced consumer purchasing power. Consumer expectations are constantly changing when it comes to digital, customized experiences. And the rapid advancement of artificial intelligence has put a premium on companies’ ability to leverage data to better serve customers.

Growing With You
It takes our entire team–including our trusted brokers–to navigate this complex environment, operate with excellence and help even more customers with their financial needs. At Mutual of Omaha, we aim to provide an exceptional broker experience that enables you to serve your clients more easily and effectively.

One way we delivered on this commitment in 2023 was by releasing the Book of Business tool so producers can access their in-force policy information in one easy-to-sort file in Sales Professional Access.

Here are some of the other notable enhancements we implemented for our brokers and customers in 2023.

Life and Supplemental Health

• We launched e-signature enhancements on our life insurance products, including text message signature capabilities.
• We strengthened our indexed universal life product line by launching a fourth crediting strategy, the Bank of America U.S. Agility Index: One-Year Uncapped account.
• We increased the maximum issue age on IUL Express and Term Life Express products to age 75.
• We launched a new tool that enables producers to run their own in-force illustrations to provide better ongoing service to existing policyholders.
• We added Mutual Income Solutions (disability income product) to our mobile quotes tool.
• We updated the underwriting guidelines for Term Life Express and IUL Express. Marijuana is no longer considered an unlawful drug for the purposes of applying and underwriting.

Senior Health

• We released a new e-App storefront, making it easier to cross-sell Medicare supplement, dental insurance and prescription drug plans.
• We enhanced our dental insurance benefits in most states by offering a no-wait period, immediate coverage for major services and maximum benefit options up to $5,000.
• We continued to help customers save money by offering competitive Medicare supplement rates and discounts.
• We auto-decisioned over 70 percent of Medicare supplement underwritten applications, resulting in decisions in less than three minutes.
• We formed a strategic alliance with Wellcare to offer co-branded Medicare Advantage PPO plans in Georgia, Missouri, South Carolina and Washington as well as in the Dallas/Fort Worth and Houston markets in Texas beginning with plan year 2024.
• We focused on the broker experience and enhancing interactions with key service areas.

Looking Ahead to 2024
In 2024, we will build on our efforts to create an industry-leading broker experience in a variety of ways.

Life and Supplemental Health

• We will continue to focus on enhancements and competitive pricing for our simplified issue portfolio.
• We will continue to enhance our e-application platform and e-signature process for additional product lines.
• We will continue offering our strong stand-alone long term care products.
• We will expand and improve our digital capabilities to provide convenient options for our sales partners and customers.
• We will plan to enter the fixed indexed annuity market.
• We will continue to offer competitively priced IUL plans and evaluate marketplace positioning to bring you and your clients the most valuable IUL products.
• We will continue to focus on growing our simplified issue and indexed universal life business.

Senior Health

• We will expand the Book of Business tool to include prescription drug plans.
• We will continue to offer comprehensive Medicare solutions and value-add options for our senior-aged clients.
• We will continue to focus on our e-application capabilities as we strive to create the easiest and fastest experience in the industry.
• We will roll out enhanced dental benefits in additional states.
• We will explore additional Medicare Advantage opportunities to expand our footprint in the senior health market.

Mutual of Omaha’s purpose today remains the same as in 1909. We help our customers plan for the future and protect what matters most. We appreciate your ongoing support in fulfilling that mission and look forward to a successful 2024! [RM] [MS]

Many Americans are stressed out about their finances. With increased cost of living, market volatility and other economic factors, they are worried about how they will fare in retirement.

In fact, at the end of 2023, 40 percent of Americans said they are more stressed than they were last year, according to the New Year’s Resolutions Study from Allianz Life Insurance Company of North America (Allianz Life). That’s up from 34 percent at the end of 2022.

Americans want to find ways to relieve financial stress. A financial strategy that helps manage risk and volatility could help protect their journey through retirement.

Our lineup of products is designed for just that–to provide a level of protection. Here, we’ll address how our products can help mitigate risks like the rising cost of living and market volatility for a smoother retirement.

Protecting against rising cost of living
While inflation has slowed since recent highs, the cost of living does continue to increase. Because even in times of modest inflation, every dollar saved for retirement purchases less year after year. That’s why Allianz Life fixed index annuities (FIAs) and registered index linked annuities (RILAs) and fixed index universal life (FIUL) policies all offer innovative opportunities to help address this risk.

Our annuities offer increasing income potential that can help address the rising cost of living. Allianz FIAs and RILAs both offer guaranteed lifetime income that can increase each year the annuity earns a credit through either built-in or additional-cost riders.

Allianz FIUL policies also can help hedge against inflation with features like accumulation potential through indexed interest and Index Lock. Since inflation often coincides with rising interest rates, that typically creates an environment for raising the participation rates and caps on FIUL policies. This brings more accumulation potential to clients.

For our FIA contracts with increasing income potential, 90 percent have received an increase.¹ This “annual reset method” for increasing income means that income will increase by the same percentage every year interest is credited. Previous lifetime income withdrawals, fees or index losses don’t factor in. This method, available with Allianz income benefits, often results in a client receiving more opportunities for income increases. For many Allianz FIA contract holders, their income has not only kept up with inflation but their purchasing power has increased over time.²

Rising cost of living includes medical costs too. As we celebrated our 10-year RILA anniversary in 2023, we enhanced our products with additional index options and features that can help retirees pay for certain long term care expenses.

The new Income Multiplier Benefit on the Allianz Index Advantage+ Income Variable Annuity is a unique feature that allows clients to withdraw up to twice their annual maximum income payment to pay certain acute and long term care needs or they could use it for any other desired objective. Income Multiplier Benefit is automatically with the contract, and with no separate fee other than the income benefit rider fee. The Income Multiplier Benefit is not a substitute for long term care insurance.³

Protection from market volatility
Nobody can predict the market. Allianz knows that timing the market rarely works out, so our products have features that help protect assets during periods of volatility.

Many of our products have a lock feature that gives clients the opportunity to lock in gains at any time once during a crediting period. With Index Lock (available with select index options in our FIAs and FIUL products), you can lock in an index value, track and view the index values online, and help minimize the effects of market volatility throughout the year. We also have Auto Lock⁴ that, when activated, automatically locks in when an index reaches a set target.

Many of our clients take advantage of these features to lock in index gains. Among our FIUL policies with an active Index Lock, the average locked-in value is 10.78 percent. On our FIAs, the average credit among account values with an active Index Lock is 6.3 percent.⁵

While Performance Lock6 has been a feature of Allianz RILAs for several years, we added an Early Reallocation feature also called Lock and Get Back In this year. This feature allows clients who have executed a Performance Lock to reallocate their locked index option values, beginning a new term without having to wait until the next index anniversary. Rather than remaining locked through the end of the index year, clients can get back in and participate in index returns. Allianz also added a new Index Dual Precision Strategy and bigger buffers on Index Performance Strategy to products in our Allianz Index Advantage+ RILA suite. The Index Dual Precision Strategy offers growth potential in not only a positive or zero market, but also in a down market if the negative index return is within the 10 percent buffer amount. This helps our Allianz Index Advantage+ products to offer growth potential with a flexible level of protection on the downside with enhanced functionality.

Similarly, Allianz FIUL policies have unique features that help provide some insulation from market volatility, including guarantees for the accumulation value.

That means you have the ability to react in a volatile market, but you aren’t trying to time the market.

Your protection partner
With the increasing stress and mounting worries, many Americans are more likely to seek out financial guidance in the coming year. The shifting dynamics of retirement mean that financial professionals are more important now than ever. Allianz wants to be a partner for you to provide more than just a product to your clients. We know that the distribution landscape is changing. But, whether you work for an entity that is independent or owner, Allianz wants to help you provide value to clients. Allianz products help address some of Americans biggest retirement fears like outliving their money. And, ongoing economic uncertainty is affecting how Americans feel about their long term financial strategies. Finding ways to help clients take part in the market while mitigating risks can be important.
Allianz wants to be a part of your client’s financial strategies to help provide reassurance and weather market downturns over the long term. The growth potential and levels of principal protection in FIAs, RILAs and FIUL policies can strengthen the outcomes of a holistic financial strategy and help manage risk.

Allianz continues to strive to help deliver levels of protection to your clients. Allianz products that address risk can play a pivotal role in helping clients protect their well-earned retirement. We believe that FIAs, RILAs and FIUL will continue to resonate with your clients in the New Year. And, we will continue to evolve to create new and updated products.

Looking ahead to 2024, we believe clients will continue to seek a financial strategy that helps them manage risks and volatility for a smooth ride through retirement. Insurance products like annuities and fixed index universal life insurance will continue to play an important role in those strategies to help ease some of the biggest worries about preparing for long term financial stability. We’re committed to being your partner for protection in the year ahead.

*Allianz Life conducted the 2023 New Year’s Resolutions Study online in November 2023 with a nationally representative sample of 1,005 Respondents age 18+.

Annuities can help you meet your long term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.

Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

Products are issued by Allianz Life Insurance Company of North America. Variable products are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA.

This content does not apply to the state of New York.

RILAs are subject to investment risk, including loss of principal, and contract values fluctuate daily. Investment returns and principal value will fluctuate with market conditions so that units, upon distribution, may be worth more or less than original cost.

Withdrawals will reduce contract values (including any Cash Value) and the value of any potential protection benefits. Withdrawals taken within the period stated in the prospectus will be subject to a withdrawal charge or a Market Value Adjustment (MVA), depending on the product.

All withdrawals are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10 percent federal additional tax.

For more complete information about registered index-linked annuities and the variable option, call Allianz Life Financial Services, LLC at 800.542.5427 for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the index variable annuity and the variable option, which your clients should carefully consider. Encourage your clients to read the prospectuses thoroughly before sending money.

For financial professional use only.

Reference:

1. The total number of contracts used for this analysis was 42,416 and represents any increase of any amount in a given year. This data reflects fixed index annuities, which elected a withdrawal option using the annual reset increase method from 1/1/08 through 12/31/21, and would have been eligible to receive interest credits from 1/1/09 through 12/28/22. Past increases do not guarantee future increases.
2. With Allianz, your lifetime income payments will continue for the rest of your life, as long as you follow the terms of your contract. And, every time you get a payment increase, that new higher payment is guaranteed for the rest of your life.
3. Double income payments come from the Income Multiplier factor. We establish the Income Multiplier Benefit wait period and the income multiplier factor on the date the clients sign the application provided we receive the initial Purchase Payment within the required time period. Income Benefit supplements with terms for each Allianz RILA with Income Benefit can be found at www.allianzlife.com/rates.
4. Auto Lock feature may be discontinued at any time.
5. Average locked interest rate for clients who applied the Index Lock feature between Sept. 9, 2019 and Nov. 22, 2022. The total number of contracts used for this analysis was 7,970 and both one-year and two-year crediting methods were included. Potential interest varies by index strategy and index. Past results are not a guarantee of future performance. Exercising an Index Lock may result in a credit higher or lower than if the Index Lock had not been exercised. We will not provide advice or notify you regarding whether you should exercise an Index Lock or the optimal time for doing so.
6. Executing a Performance Lock or Early Reallocation may result in you receiving less than the credit you would have received had you not locked the Index Option. It is possible to lock in a negative return. We will not provide advice or notify you regarding whether you should execute a Performance Lock or Early Reallocation, the optimal time to do so, or if you execute a Performance Lock or Early Reallocation at a suboptimal time. We are not responsible for any losses related to your decision whether or not to execute a Performance Lock or Early Reallocation.