Archive for the ‘Insurance Industry Issues’ Category

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Does It Really Matter Who the Defendant Is?

Wednesday, September 1st, 2010

Almost as soon as the health reform legislation was passed, opponents mobilized to see where the weaknesses were and call the new law into question. And, like many conservatives before them, they found the answer in the one place where Americans most hate to see their rights being messed with: the Constitution.

Back in May, two separate groups – the U.S. Citizens Association and a group of 17 state attorneys general across the country – challenged the constitutionality of the newly passed Patient Provider and Affordable Care Act. Specifically, the attorneys general say that the insurance mandate (the part of the law which requires that all citizens have health insurance) is against the commerce clause of the Constitution, because it regulates both economic activity and economic inactivity.

The attorneys general moved to court, led by Virginia Attorney General Kenneth Cuccinelli. Recently, however, secretary of Health and Human Services Kathleen Sebelius claims that the lawsuit should be thrown out because Cuccinelli named the wrong defendants in the case.

The case, which was brought against Sebelius, should have been brought against the Secretary of the Treasury. According to Sebelius, she doesn’t have the power to oversee the mandate and therefore is the wrong defendant.

“The secretary of the Treasury is primarily responsible for the administration of the minimum coverage provision that the plaintiff seeks to challenge,” Sebelius said.

Cuccinelli has not listed Treasury Secretary Timothy Geithner as a defendant in the suit.

So, is this a deal-breaker? Could the constitutionality argument crumble because the attorneys general named the wrong defendant? It’s possible. Court cases have collapsed as a result of less. However, it turns out that government attorneys generally don’t make a big deal out of situations like this – and they happen a lot more frequently than you would think, particularly when the defendant is a government or a representative of the government. Corrective action can be taken, if it’s necessary, and in the end the case can move forward.

It seems, then, that Sebelius is out of luck again, and the suit will likely move forward.

Posted in Health Insurance, Insurance Industry Issues | No Comments »

Boomers More Afraid of Being Poor than Dying

Wednesday, August 4th, 2010

Dying is scary. There are no first-hand accounts to find out what it’s like, and no one can talk you through their personal experience of it and give you advice on what to do if you feel unprepared. Despite that, more older Americans are more afraid of depleting their assets than they are of actually dying.

In a poll of  3,257 people aged 44 to 75 conducted by Allianz Life Insurance Co. of North America, more than three in five (61 percent) said they fear depleting their assets more than they fear dying.

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Posted in Annuities, Insurance Industry Issues, Retirement Planning | No Comments »

Was Obama’s CMS Appointment A Daring or Dumb Move?

Wednesday, July 14th, 2010

President Obama recently filled the vacant CMS administrator position by using the recess appointment process, which can bypass the Senate’s approval.

Obama tapped Dr. Donald Berwick for the position, a Harvard professor and president and CEO of the Institute for Healthcare Improvement. However, Republicans believe that Berwick is an advocate of health care rationing and claim that he praises the United Kingdom’s national health system.

According to Republican-circulated versions of Berwick’s remarks, he has said that the system “developed very good and very disciplined, scientifically grounded, policy-connected models for the evaluation of medical treatments from which we ought to learn.”

Although Berwick was nominated for the CMS administrator post in April, his confirmation was held up due to Republican opposition.

Despite the Republican opposition, many political analysts applaud Obama’s decision. His appointment is backed by the American Hospital Association, the American Medical Association, and other health organizations and patient advocacy groups. Three of his predecessors who held the same job in Republican administrations all gave their approval of his appointment. Hospital executives who have worked with Berwick call him a visionary and insightful leader. Most important of all, this will be the first time since 2006 that CMS will have a permanent administrator.

However, because the appointment was made during a recess, Constitutional law dictates that Berwick’s appointment will expire at the end of the next Congressional session, in late 2011. This might be just as Berwick is starting to effect change. Of course, he can always be reappointed, so he may have just enough time to prove that he was the right man for the job all along.

It may take a little while before we see the impact of Obama’s recess appointment, so it’s unclear at this time just how strong of an impact this decision could have on insurance agents. But one thing’s for sure – we certainly want to keep an eye on Berwick as he leads CMS through the era of change brought on by health care reform and the Obama Administration.

Posted in Insurance Industry Issues, Medicare | No Comments »

What Are The Risk Factors For Your Future Clients?

Wednesday, July 7th, 2010

As Americans age at a rapid rate (by 2025, there will be 65 million baby boomers, ranging in age from 61-79, and making up 25 percent of the population 16 and older), producers who are just hitting their professional stride might be asking themselves – where is my next generation of clients going to come from? Current high schoolers will soon be heading off to college, and once they graduate (or turn 26, depending on the life path they choose), they’ll be ready to choose a few insurance policies of their own. But what types of risk factors will they be facing? As it turns out, quite a few.

According to a new study by the U.S. Centers for Disease Control and Prevention, most high schoolers engage in behavior that puts them at an increased risk of dying. The study, conducted from 1991 to 2009, analyzed risk behaviors. The most common causes of death involved motor vehicle crashes, and expected teen risk behavior such as smoking cigarettes (19.5 percent), drinking alcohol (42 percent), and being sexually active (34 percent, and 40 percent admitted that their last sexual encounter had been unprotected) were common. However, the most frequent risk factors noted over the course of the study related to health and wellness.

In the week before the survey, 78 percent of the students had not eaten fruits or vegetables more than 5 times per day, and 29 percent had consumed soda at least once per day. Eighty-two percent of students were not physically active for at least an hour a day each day for the week before the survey. Only a third attended physical education classes daily, and 12 percent were obese.

Couple the fact that high schoolers lead relatively unhealthy lives with the fact that they seem completely unprepared to deal with their own financial futures – a test by the Jump$tart Coalition measuring  aptitude for managing such financial resources as credit cards, insurance, retirement funds, and savings accounts showed an average score of only 52.4 percent.

Fortunately, there are resources out there. The Association for Advanced Life Underwriting, the Life and Health Insurance Foundation for Education, the Million Dollar Round Table, and the National Association of Insurance and Financial Advisors worked together to create NextGen3, an interactive program which includes lessons, games, and videos designed to appeal to a younger demographic. This is part of an ongoing – and growing – push to spread financial literacy at a younger age.

As insurance agents, do you think it’s your responsibility to help the younger members of our society understand financial matters and live healthier lifestyles? Do you do anything to reach out? Comment below and let us know! Or, take our poll on the ASJonline.com homepage!

Posted in Insurance Industry Issues, Insurance Marketing, Prospecting | 1 Comment »

Americans: Hating Insurers Since the Dawn of Time

Wednesday, June 30th, 2010

Recently, CNNMoney.com published a list of the 10 most hateable companies (apart from BP, who undoubtedly holds the No. 1 spot right now). These are the companies that Americans love to make fun of, to talk bad about, to boycott. The companies on the list were varied. They included retailers such as Walmart, tech companies like Microsoft – even social media giant Facebook made the list, no doubt thanks to their recent slackening of privacy policies. But no industry was hit harder than the financial industry, which claimed 40 percent of the list – including the No. 1 spot, held by Goldman Sachs – and half of those spots were held by insurers.

The anger over AIG has definitely died down some since the government bailed the company out. Still, AIG owes the taxpayers enough to give them the No. 5 position on this list. And even though the tides are definitely changing for life insurers in general, they’re not out of the water yet – one slip-up by a major company or group of companies could cause the industry to fall right back down again. What’s more, AIG and big insurers like it have become the symbol for what it means to be too big to fail. It’s no wonder that consumers feel wary of the company, and the agents who back it, even after all this time.

And WellPoint, who holds the No. 4 position, is not doing anything good for health insurers. In California, the company attempted to increase premiums by up to 34 percent. Then there are the allegations that they investigate every case of breast cancer trying to find a case of fraud. Indeed, other health insurers have recently made headlines for rescission practices, or otherwise troubling business methods. None of these instill confidence in the consumer, which is worrisome at a time when health reform was swooping in promising to fix everything.

But whether or not one or two bad companies can really change a nation’s view of the insurance industry isn’t the question. The question is – what are you, as an insurance agent, doing to make sure that your industry remains respected? Are you making every effort you can to show that you’re honest? Do you admit when you make a mistake? Do you ease your client’s concerns in the best way possible?

How is the overall animosity toward the financial industry affecting your practice on a day-to-day basis? Comment below and let us know!

Posted in Health Insurance, Insurance Industry Issues, Life Insurance | 1 Comment »

Things Are Looking Up for Life Insurance Agents

Thursday, May 27th, 2010

As I perused my list of financial news sites earlier today, I couldn’t help but notice a trend that should leave every agent who sells life insurance with a huge smile on their face. Every single headline I saw about life insurance was positive, predicting increased sales and a more secure industry. Moody, for example, has upgraded its outlook for the U.S. life insurance industry from negative to stable. Fitch is expecting higher earnings overall for life insurers in 2010 than in 2009, and LIMRA reported that life insurance sales in the first quarter of 2010 were 10 percent higher than life insurance sales in the first quarter of 2009. Considering that the first six months of 2009 saw the steepest six-month drop in life insurance sales in nearly 70 years, this optimism should make life insurance agents extremely excited.

Whenever I talk to agents or industry professionals about life insurance, they always say that life insurance is one of those products that doesn’t have too difficult a time weathering a storm. The average consumer understands the value of protecting their assets and creating a safety net for their family, so even in a financial downturn they will set aside some money for life insurance. Sure, they might turn to a more budget-friendly product like term insurance to bridge the gap between now and the time their finances turn around, but still – a small sale is better than no sale.

Still, it seems there’s no denying that the past year has been difficult for life agents. Sales were down, and the sales that were made had smaller premiums and smaller commissions. And yet you carried on. What kept you going through the rough patch? Was it knowing that there would be better times ahead? Or was it just the fact that you believe in the value of life insurance so much that you knew it was worth the effort it took to break through the financial objection and find the clients that were willing to make life insurance a priority?

No matter what it was, if you stuck around, it’s going to pay off – 2010 should be a great year for life agents.

Posted in Insurance Industry Issues, Life Insurance | 1 Comment »

Are You Reaching Out to Diverse Clients?

Wednesday, May 19th, 2010

Hispanic consumers want financial advice. Are you prepared to give it to them?

According to a new study by New York Life, the economic crisis has made Hispanics across the country more motivated to protect their finances and become better educated about financial planning. In fact, 77 percent of Hispanic adults surveyed agreed the recession increased their desire to provide a financial safety net for their families.

Unfortunately, despite their desire to be educated, many Hispanics have a hard time actually acquiring information. Almost half the respondents (47 percent) agreed that a lack of information about financial protection planning was an obstacle to providing financial protection to their families. The second most prevalent hurdle, according to 39 percent of respondents, was believing financial protection is unaffordable and that they didn’t have enough money – a common barrier in the average population as well. This is a misconception that insurance agents fight every day, and now, it seems, there’s a new battlefield to fight it on.

It’s clear, then, that there is both a lack of information available to multi-cultural clients and a strong demand for education. Which means that there is a huge opportunity available to those agents willing to put in the time to market to ethnic populations. (In fact, many major insurance companies, including Allstate, State Farm, and New York Life, are reaching out to Hispanic populations with targeted marketing campaigns.)

If you’re not sure how to get started in reaching out to this new group of untapped prospects, here are some tips that can help you through.

  • Partner with targeted nonprofits. If there is an event in your area that assists the population you want to reach, see how you can help out. Be genuine in donating your time and skills (in other words, don’t walk in trying to sell), and eventually it will come out that you’re an insurance agent. Let them ask you for advice, then see if you can schedule an appointment from there. The key is to build trust within the community.
  • Understand that the needs and priorities of one cultural group might be different from your own. Get to know the culture of the community you want to target. Learn what’s important to them, and create a portfolio of products that meets those needs.
  • The commitment to diversity is an ongoing effort. Keep it up, and you’ll see the rewards over time.

The diversity of our population is continuing to grow. Hispanics are making up a larger and larger percentage of the population – so if you don’t reach out to them, a competitor will.

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Posted in Insurance Industry Issues, Insurance Marketing, Practice Management | No Comments »

Does Health Reform Break Obama’s Campaign Promise?

Wednesday, May 5th, 2010

The Congressional Budget Office recently came out with estimates about the number of people who will be affected by the penalties caused by the insurance mandates. According to the CBO, about 4 million people will be charged fines in 2016.

Of course, this doesn’t mean that only 4 million people will be uninsured by then. The CBO estimates that 21 million people will actually be uninsured, but the large majority won’t make enough to be hit with penalties. Which means that the ones who will be hit are those in the middle class – people who make enough that they don’t qualify for exemptions, but not enough that they feel comfortable committing a portion of their income to buying health insurance in the first place.

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Posted in Health Insurance, Insurance Industry Issues | No Comments »

You’re Never too Young to Learn About Insurance

Thursday, April 22nd, 2010

Major life insurance organizations are providing teachers with the tools to help high school students learn about life, disability, and health insurance as part of Financial Literacy Month in April.  

The Association for Advanced Life Underwriting, the Life and Health Insurance Foundation for Education, the Million Dollar Round Table, and the National Association of Insurance and Financial Advisors worked together to create NextGen3, an interactive program which includes lessons, games, and videos designed to appeal to a younger demographic. And even though agents can’t actually sell to high school students – and, under the new health reform, most likely won’t have the opportunity to offer them health insurance until they’re in their mid-20s – teaching young people about financial literacy could be a great opportunity for agents looking to establish and grow their practice over the coming years.

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Posted in Insurance Industry Issues, Insurance Marketing, Practice Management, Prospecting | No Comments »

More Regulation Ahead for the Financial Industry

Wednesday, April 14th, 2010

With health care reform and the nuclear summit out of their way, Congress and president Obama have moved on to their next hot-button issue – financial industry regulatory reform.

It’s no secret that Republicans are not fans of the current Senate proposal, introduced by Senate Banking Committee chairman Christopher J. Dodd. His proposal, among other provisions:

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