By Jay Scheiner JD CLU

Could life insurance rates skyrocket? As the COVID-19 pandemic continues to impact the health of people throughout our country and the world, producers are questioning how the virus will affect life insurance pricing for their clients going forward. I spoke with several industry experts and actuaries – here’s what I found…

COVID has made it harder for many to get a new life insurance policy. Insurers considered immediate and significant pricing hikes on rates in the short-term, but we have not seen this. Instead, some insurers have stopped selling insurance to individuals over a certain age or above a certain rating class, rather than taking a singular pricing action. This withdrawal from selected markets (the populations most at risk for COVID deaths) is how many insurers defensively dealt with the virus early on in the pandemic.

While all insurers experienced losses as a result of a spike in mortality from early 2020 to early 2021, some realized a less dramatic increase in claims because many of the COVID deaths were from populations that tended to no longer be insured (the elderly) or insured for more modest face amounts. There is also the reality that many of the deaths that have occurred from COVID in the elderly or sick populations would have occurred anyway. Companies specializing in term insurance experienced less of an impact than those concentrating on permanent coverage.

Is the spike in mortality short-lived or will it be a continued threat to insurers? The industry pros I spoke with point to the record-breaking development of highly effective vaccines as a game-changer; they believe in the ability of those pharmaceutical companies to also modify the vaccines to combat COVID variants. However, the big question is whether the industry will actively price into a life product the possibility of new and wholly unrelated pandemics years or even decades into the future – and at what cost. As former CDC Director, Virologist Robert Redfield, stated recently, “there will be another pandemic, guaranteed.”

There are less direct but related factors affecting mortality as a result of the COVID-19 pandemic and lockdowns: 

• People have been reluctant to see their personal physician and specialists for routine examinations and screening tests
• Impact of effects of “COVID Syndrome” where the illness carries a lasting impact on the body which can ultimately impact mortality
• The increase in alcoholism and drug usage seen as a result of lockdowns

A few unforeseen benefits uncovered during the pandemic:

• The near disappearance of the flu and reduction in the common cold in the US last winter, likely due to mask-wearing, frequent hand-washing and social distancing
• Many young and healthy people can now purchase significant amounts of insurance without an exam or bloodwork – some carriers have raised these non-medical limits to multi-million dollar levels

Ask your client, does the COVID-19 pandemic make it more important than ever to have life insurance? The answer will probably be, yes. We don’t think that COVID-19 significantly changes the answer to whether your client needs a life insurance policy. Life insurance has always been necessary for anyone whose death would result in financial strain for a family member or business, or anyone who depends on someone else for financial support. Your clients should have enough insurance to replace that support for as long as it is needed. Married couples, even those without children, can also use life insurance to ensure that each spouse can maintain their prior standard of living even if the other passes away.

So, will life insurance rates skyrocket as a result of the COVID-19 pandemic? According to the sources I spoke with, the answer is probably no. But combining the COVID-19 burden with other pressures the insurers are currently dealing with, such as sustained low interest rates and increasing regulation, there is now a pronounced upward trend in life insurance pricing.

The bottom line is that your clients should buy while they can qualify, and sooner rather than later, as it is unlikely we will see rates as affordable as they are today.

Jay Scheiner is Executive Vice Present of Agent Support Group, an AmeriLife Company.

Sam Kaufman, President, Agent Support Group

The first 60 days of 2021 have been very exciting and point to this being an exceptional year for ASG and many of our advisors.

Traditional Guaranteed Universal Life products have all but disappeared from the portfolios of many companies.   New forms of GUL are appearing in variable and indexed universal life products that offer clients both guaranteed premiums and death benefit in addition to cash value accumulation.  ASG is able to work with your broker dealer and still provide you the same underwriting and design expertise for variable life products  as we do on traditional life products.  Find out how competitive GVUL is before seeing your next client.

More companies start to limit products in New York.   The most recent company to withdraw many products from New York is John Hancock.   If you have a pending sale involving any John Hancock product other than term or Accumulation UL make certain that the application is submitted as soon as possible.   Don’t be surprised to see other companies follow John Hancock’s lead in New York.

Agent Support Group is also expanding its annuity portfolio with the addition  of a Fixed Indexed Annuity designed by Nationwide exclusively for Amerilife, our parent company. Peak 10 offers two exclusive index options from Alliance Bernstein and JP Morgan plus a guaranteed participation rate for ten years.  Give ASG a call and we will provide you additional information about this exciting product.

More exciting news is coming in coming months so stay tuned.

Gary Bleetstein
Senior Vice President

While 2020 has been a year of change and huge challenges , it has also been a year for the life insurance industry of pivoting to remain in competitive positions of writing life insurance. With the Covid-19 Virus getting our attention in March, it is still at the top of the list for distractions in  industry including the Life Insurance Industry.

With more and more employees of carriers and distribution working remotely, the challenge has been how to create more sales as the statistics have shown more young people are re-considering their life insurance needs. This also goes for Final Expense products.

The good news is that we have succeeded. While premiums are flat and there has been a change in the types of life products not only being offered but purchased, the distribution and ease of purchasing life insurance has evolved. Yes, term insurance for younger people has increased, premiums have decreased yet sales of VUL have soared to our wildest expectations.

Agent Support Group has been following this trend towards more electronic, exam free  fluid free accelerated underwriting and we are exciting about introducing VIVE- an end to end, Drop Ticket Platform for Term Insurance from many of the top carriers.

Vive is an exclusive platform only available to BGA’s who are members of Libra and their advisors. Libra is one of the leading IMO’s in the life insurance marketplace today and this exclusivity is important.

With the Vive platform an advisor will be able to quote, share a quote, and within 5 minutes, submit an order via an electronic application that from that point forward with be handled by the carrier of choice and our ASG case managers.

This platform is cutting edge and we hope you take advantage of it. Click Here to see a demo of how Vive work.

ASG will be sending out some information on Vive and our formal introduction will be via a Webinar on March 2^nd – you will all receive an invitation and hope you do join us. PLEASE SAVE THE DATE – MARCH 2^ND – 10 AM EST.

In conclusion, while our lives have been disrupted and changed in 2020, we are looking forward to a sate, productive and better 2021.

By: Mark D. Milbrod, CLU, CLTC

As we enter this new year, there will certainly be many changes.  And as always, with change comes opportunities.  You can either be part of the glass half empty camp or the glass half full camp.   I always choose the half full side.

Changes are already happening at a very fast pace in our industry.  We have seen more contraction in the GUL space with more carriers withdrawing their products.  This is mainly due to a couple of factors; the continuing low interest rate environment and tighter reserve requirements being placed on the insurance carriers.  With an incoming democratic President/Administration, we will likely see some changes as they relate to the Estate Tax and other regulatory issues affecting the products we sell.

There are some good things coming down the pike.  And believe or not, it is positive and there is a silver lining.  Here is some of what to expect:

• To replace the GUL, there are several IUL chassis that will have very competitive Extended No Lapse provisions all the way to age 100.
• A new simple to use Term Insurance platform called Vive. Under this proprietary platform, you will be able to quickly and efficiently submit your business with dramatically fast turnaround times.
• Due to some year-end tax code liberalization, insurers will be able to expand premium thresholds for purposes of Section 7702. This will be a boom for Whole Life insurance sales with larger Non-Mec limits.
• Continuation of NON-MED underwriting programs to further your ability to provide products to your clients as we navigate through more of the pandemic.
• We have seen somewhat of an easing on some of the previous COVID underwriting rules. Some of these changes have expanded issue ages and/or face amounts.
• Re-pricing and lowering of some term rates.
• Introduction of a new Proprietary Annuity Product
• New Webinar Series for 2021

As we did last year, we as your partners at ASG, will continue to keep you informed about the things that matter to you most.  Timely sales ideas, product and industry news will be vital to your success for 2021 and beyond.

The previous year had its challenges but through it all, we were there to assist.  But like any year, challenges bring opportunities.  Together, with the optimism of that glass half full, we wish you a Very Safe, Prosperous and Happy New Year!

By: Mark D. Milbrod, CLU , CLTC

To say this year has been challenging is probably the most gross understatement of all time.  We have all been living through not only the toughest year of our lives, but certainly the most challenging year of our careers.

But as we wind down 2020, I would like to first acknowledge all that have been personally affected by COVID.  If you have lost anyone close to you, I would like to express my deepest condolences.  As I put these thoughts to paper, the pandemic is still raging on.  That is something that I never would have thought when this started so many months ago.   When this is all said and done, I won’t miss hearing words like Pandemic, Unprecedented/Challenging times or my favorite, “We’re all in this together.”

It would be remiss of me to not mention a special thanks to all of the front line workers such as the Doctors, Nurses and First Responders who put US all first in the fight against COVID-19.    Add to that list the grocery store workers, truck drivers, delivery service personnel, restaurateurs, etc.  The gratitude for all of these individuals can’t be expressed enough.

But as we move forward, I must say that we have certainly evolved as an industry.  Yes, there were and still are challenges that remain as we face our day to day grind.  We have however, found a way to prosper through innovative delivery systems from our manufacturers that help us bring the much needed products and services that we provide to our clients.

Life Insurance, Annuities, Disability Income or Long Term Care products are probably more important than ever.  Prior to COVID, there was a vastly underserved market.  Now, that market has grown as we have found ourselves in front of a wider, more receptive audience, who are actually thinking about their mortality in a more serious manner.  Some of us still meet clients in person as well as through other means. We utilize services  such as Zoom, as a way of staying in front of current customers and to bring on new, prospective clients.

The carriers that we represent have developed unique ways of writing new business as a way of adapting to the pandemic.  A wide range of non-medical programs are available to apply for life, disability and long term care insurance.  Even Annuity products can be applied for via e-submissions.  In addition, a wide range of e-delivery options have been implemented.

In the end, we have so many options at our fingertips.  We have an important job to do and many options on how to do so (even through this pandemic).    As we navigate through this holiday season, albeit a strange one, we must look ahead to the future and welcome 2021 with a large amount of optimism.

We hopefully will see the virus abate sooner rather than later.  There are vaccines around the corner, which will offer additional promise,  speed up and control this virus to a point where we can get back to some degree of normalcy.

Several years ago, I came across the following quote by Wilbur Wright when my family and I visited the Wright Brothers Museum in Kitty Hawk, NC…

“…it is not really necessary to look far into the future; we see enough already to be certain it will be magnificent. Only let us hurry and open the roads.”

With that degree of optimism, I feel that this was representative of where we are today.  Brighter days are definitely ahead of us, both professionally as well as personally.

As your partner, we, at Agent Support Group will continue to bring you relevant and timely information about products and sales concepts.   And of most importance, we remain committed to assist you in any way possible and keep your success growing.

We appreciate your business and wish you and your families all the best for a Very Happy, Safe & Healthy Holiday Season.

Gary Bleetstein
Senior Vice President

November is Long Term Care Insurance Awareness Month and ASG would like to remind you how important LTC planning is for you and your clients.

66% of Americans say most people need long-term care insurance, according to the 2020 Insurance Barometer Study that Life Happens and LIMRA conducted. However—and here’s the catch—only 18% say they own it. This gap suggests an active market demand from over 100 million consumers.

Here is some really good and important information from Life Happens – one of our industry associations who advocate with a passion for education.

Why is long-term care insurance worth it? 

• First, it’s worth reviewing a long-term insurance definition.

• Long-term care insurance is coverage that pays for care either in your home or in a specialized facility should you develop a health condition that requires partial or full-time care.

• Long-term care insurance is an increasingly important consideration for an aging population that is living longer than ever. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹

And that care doesn’t come cheap: Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.²

These statistics underscore the reasons why long-term care insurance is worth it. They include the following:

• It protects your assets.Many people falsely believe that public health programs like Medicare or Medicaid will cover their long-term care expenses. In reality, Medicare caps payments for skilled care at 100 days, and it only pays if certain requirements are met. Meanwhile, Medicaid only kicks in after you spend down your own assets. Private health insurance cannot be relied on either, since it only pays for doctor and hospital bills. If you planned on relying on these options, you would have to spend most of your own money to pay for care. That would deplete your hard-earned savings and make it impossible to leave money to family members or a favorite charity when you pass away.
• It takes pressure off your family.It’s also not a great idea to assume that a family member would step up to provide care. Becoming a caregiver is physically, emotionally and often financially burdensome. Many people are not able or willing to make such a huge sacrifice. This is especially true when the caregiver is a spouse or partner also facing their own aging health issues.
• It gives you care options.Long-term care insurance gives you flexible options when it comes to deciding where to receive care. You almost never get a say when you rely on a public health program like Medicaid to cover your long-term care expenses. Many facilities don’t accept Medicaid, so your only option may be a no-frills nursing home with shared rooms rather than a more amenity-oriented private nursing home where you’d get your own room. What’s more, Medicaid doesn’t pay for all (or even any) assisted living costs in many states. Relying on care from a family member likewise limits the say you have in the care you receive.
• It may come with life insurance protection.Today, many long-term care insurance policies are hybrid policies that bundle long-term care coverage with life insurance coverage (or an annuity). Hybrid life and long-term care policies offer your loved ones protection in the event you pass away, while also giving you the assurance of knowing that your long-term care needs are covered. Plus, a hybrid life and long-term care policy can save you the time and expense of buying two separate policies.
• It puts you in control and gives you peace of mind.With long-term care insurance coverage, you never have to wonder what would happen if you needed long-term care and how that care would be paid for. And because long-term care insurance can be bundled with life insurance, your family has the extra benefit of knowing they’re protected if you were to pass away. For many people, this peace of mind is the top reason for buying a long-term care insurance coverage.

¹ U.S. Department of Health and Human Services
² Genworth’s Cost of Care Survey

There are many options for long-term care insurance.  

When it came to long-term care insurance options in the past, the only offering was a standalone policy. These policies offered coverage only for long-term care coverage in either your home or in a specialized facility.

Now-there are several ways to purchase Long Term Care- one way that Agent Support Group can assist you is by using the Linked Benefit / Hybrid LTC with Life Insurance –

Today, you can buy a policy that bundles long-term care coverage with life insurance coverage (or an annuity). This means you get two important coverages in one policy: life insurance, which offers your loved ones financial support if you were to pass away, and long-term care coverage, which covers you if a chronic illness or disability means you’d need long-term care.

These policies go by several names such as hybrid, combo or linked-benefit products. No matter their name, there are several important benefits to having both life insurance and long-term care insurance in one policy. They include:

• Benefitting from more complete coverage.Life insurance may be a priority for you and your family right now while the need to pay for long-term care may become a higher priority in the years ahead. A hybrid policy serves two very important coverage needs in one policy.

• Having flexible payment options.You can pay for a hybrid policy with either a lump sum or through an annual stream of premiums.
• Having the option to lock in your premium.Unlike traditional standalone long-term care insurance policies, many hybrid policies give you the option of locking in your premium. This means you pay a consistent premium the entire time you own the policy and don’t need to worry about price increases.
• Enjoying a better return on your premium dollars.There is no “use it or lose it” aspect to hybrid policies. That’s because the life insurance portion of a hybrid policy offers a death benefit and/or an annuity payment, ensuring that all those premium dollars you paid will return to your family if you never need long-term care. (Just know that tapping the long-term care portion of the policy will reduce the death benefit on the life insurance side of the policy.)
• Being easier to obtain.Medical underwriting for hybrid policies is often less involved than it is with traditional standalone long-term care policies.
• Benefitting from tax savings.Life insurance benefits are almost always paid out tax free while premiums paid for long-term care insurance can sometimes be deducted from your state and federal taxes.

So let’s all use this as a reminder that November is Long Term Care Insurance Awareness Month and Agent Support Group is here to support you and your clients in these trying times with new and innovative sales and underwriting solutions.

Gary Bleetstein

Jay Scheiner, Executive VP
You are an insurance advisor meeting for the first time with your new clients, Jim and Deb. You asked them to bring, among other documents, their current insurance policies and their Wills to the meeting. This married couple, around 40 years old, have twin daughters, Dana and Donna, age 10. While reviewing their current life insurance policies, you notice that their beneficiary designations are not what they should be.

Jim’s Policy Primary Beneficiary: Deb, spouse of the insured. Contingent Beneficiaries: Dana and Donna, children of the insured.

Your clients should not name their minor children as direct or contingent beneficiaries, since a life insurance company can’t pay out proceeds directly to children until the children reach the age of majority, typically 18 or 21 depending on state law.

In most jurisdictions, to protect the interests of a minor, state law requires appointment of a guardian or trustee to administer proceeds payable to the child. Appointment proceedings will delay access to the death proceeds and generate unnecessary legal and administrative expenses. As important, the fiduciary named by the court may not be the one the insured would have chosen if they had made this decision during their lifetime.

Deb’s Policy Primary Beneficiary: Jim, spouse of the insured. Contingent Beneficiaries: (none indicated).

Your clients should designate a contingent beneficiary in all of their life insurance policies, and the beneficiary designation should be worded in a way that will best benefit their children.

Having no named contingent beneficiary is the same as naming the insured’s estate as the beneficiary. Is this a bad thing? It can be; in the absence of a Will designat- ing a guardian or trustee the courts will intervene, which may cause long, frustrat- ing delays. The courts could also impose restrictions on how the proceeds will be spent or distributed, which may be contrary to what the insured would have wanted for their children.

While Jim and Deb will go to great lengths to protect their children (that’s a major reason they purchased the life insurance), they need you, the insurance advisor, to help them find appropriate solutions. It is therefore important that the beneficiary designations allow for the distribution of the life insurance proceeds in the most disciplined manner possible to provide maximum benefit to their children when the parents are gone.

Okay—here are some practical ways to ensure that minors, through the people entrusted with their care, have access to the life insurance proceeds intended for them:

• Make the contingent beneficiary of the insured’s life insurance policy a Testamentary Trust in the insured’s Will. The terms of your client’s Will can contain this trust, which does not spring to life until the death of the insured. Referencing the trust in the Will is a precise way to ensure that the parent’s exact wishes for their children are followed. The trust, which is a legal document, names the person the insured chooses as the Trustee, and describes how the parent would like to have the money managed and spent and for how long. An 18-year-old may be an adult under the laws of many states, but the client’s testamentary trust could be written to keep the newly-minted adult from frittering the money away before he or she is 25 or 30.

In our example, the contingen beneficiary section of the life insurance application would state: (Trustee’s Name) as Trustee under (Article X) of (Jim or Deb’s) Last Will and Testament dated (January 1, 20XX).

• Taking advantage of the Uniform Transfers to Minors Act (UTMA) is an excellent way to ensure that children receive proceeds from a life insurance policy, especially if the parents have not yet executed their Wills. Under the UTMA, the parents would name an adult custodian who is given the discretion to make distributions for the minor’s welfare. The UTMA account (which is essentially a statutory trust) allows parents to choose a custodian— a person they trust—who would man- age the life insurance death proceeds, and other assets they might have in the account, as they see fit prior to the children reaching majority.

Some insurers have a specific form to assist in making a beneficiary designation with UTMA custodian the beneficiary or contingent beneficiary of a life insurance policy.

If no special form is available, the following wording would generally be accepted: (Custodian’s Name) as custodian for (child’s name) under the (State) Uniform Transfers to Minors Act. However, you should confirm with the insurance company the specific wording they would accept.

• Designate a Living Trust as beneficiary or contingent beneficiary in place of the child directly. This is similar to the testamentary trust referenced above, except that a living trust exists at the moment it is executed, whereas the trust in the client’s Will (testamentary trust) begins its life only at the insured’s death. Like the trust in a Will, a living trust allows the insured to detail the terms and conditions of gifts and plan for every contingency. The downside of this type of trust is that it will require some level of administration from the outset. If your client has a child with special needs, your client should have a living trust. If their net worth is in the tens of millions, it’s a no-brainer, and in that case the trust should be irrevocable.

Conclusion: Your clients rely on you to help them make good decisions with respect to their life insurance. These skills can separate you from those less knowledgeable. Your ability to immediately spot planning flaws (minor children as direct beneficiaries or silence as to contingent beneficiaries) may get your client to open up to you and begin talking about what is important to them. Your understanding of, and the ability to explain, the various beneficiary options is just one of many skill sets you should pos- sess. While it may seem like a big job to get this step right, keep in mind that not doing so could have repercussions for your clients’ heirs for many years to come.

Sam Kaufman,
President, Agent Support Group

At the beginning of this year we all believed that we had a clear vision for 2020.  Then came Covid-19, which required us all to change the way we conducted our day to day business.  The life insurance industry rallied to the cause with new expanded underwriting systems and procedures in an effort to accommodate advisors and their clients in a way never seen before.   We should all applaud our insurance companies for the rapidity in which they responded to this world changing event.

During this time, Agent Support Group reached out to advisors to educate and train them in the use of automated e-application processing systems, e-delivery and e-signatures.  Suddenly, a new world was thrust upon us and we all needed to speedily adjust to our new environment.   Perhaps the only thing lacking was creating public awareness to the fact that the life insurance industry was here to help provide needed financial protection for families and businesses.

Historically, the life insurance industry has been like a snail in adopting technological advances similar to those we have all witnessed in the financial services industry.   However, in 2020 the industry came to the rescue of Americans that were concerned about the financial needs of their families and businesses.   This presented an amazing opportunity for advisors to engage their clients and a reason to reach out.   Just a simple act of calling to check in on the status of a client and letting them know that you are here to help.

Covid-19 may be just a warning shot to let us know that technology, while bringing many benefits, does not replace human compassion.  We have quantified every element of our lives by comparing costs, but maybe not the product we are selling.   How many of you are selling the first product on a term spreadsheet, not knowing that the conversion feature may have limitations that are important to your client.  Is “cheap” always good?   We all know the answer, but do we make it part of our practice.

Hopefully, everything that has occurred in 2020 will bring some good.  Whether it be a speedy discovery of a safe vaccine or just a change in the way we conduct our day to day lives.   Remember, we are selling financial security that will be here for your client when needed.

Gary Bleetstein, Senior Vice President

There was quite a lot of discussion in the industry about IUL and in its early stages, how will it look, and how will it illustrate? Remember when carriers would set maximum crediting rates based on their own lookback durations and their own calculations. This alone  caused the industry to realize IUL would look either great or even better than great. At this point everyone or almost everyone wanted a level playing field for illustrating IUL.

Then came the multipliers and other factors that made IUL products impossible to compare, especially when it came to accumulation and expenses.  Some carriers were riding high on illustrating top rates, bonus’s and huge multipliers, some guaranteed and some not.

After a number of years of this, the industry has and plans to have this fall, a new Regulation spirit where products with very high multipliers, high cap rates and other features may need to review how they will compete when they may not be permitted to use these factors when illustrating IUL in the future. This is one way of leveling the entire playing field. Another change being reviewed dis the way a carrier illustrates loans in an IUL Going forward, loans are going to be shown at .5% higher than the stated loan interest rate which will effect product performance.

Well 2015 is behind us and now it’s time to re-evaluate the true performance of an IUL and in that case, any cash value life insurance product. Our clients and advisors expect our carriers and our distribution to give them all of the facts and let’s hope the new AG- 49-A does just that for IUL.

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