Insurance Pro Blog Podcast | Life Insurance and Annuity Insights

 

Recent comments from Fed Chairman, Janet Yellen, indicate that she thinks we'll never see another financial crisis like we saw in 2008. She's probably right but is that really a profound observation?

Well, the day of reckoning has come and gone. The new Department of Labor's new Fiduciary Rule is largely in effect across the financial services industry. Discussion over the rule and its implications have been debated over the last couple of years with a fair degree of intensity. Still it seems that the smoke screen ... Keep Reading

 

Well, the day of reckoning has come and gone. The new Department of Labor's new Fiduciary Rule is largely in effect across the financial services industry.

Discussion over the rule and its implications have been debated over the last couple of years with a fair degree of intensity. Still it seems that the smoke screen has worked.

The new rule expands the definition of a fiduciary as it relates to giving investment advice regarding retirement accounts.

We're not trying to explain the rule in today's episode…as far as I can tell from attending several informational webinars/meetings regarding the implications of the rule there's no agreement or real understanding of what it means for advisers.

Big surprise, right?

We aren't all that concerned with procedural issues (disclosures, paperwork etc.) as much as we're concerned about how this new rule warps the definition of “best interest” and what it really means to act in the capacity of a fiduciary.

Our issue isn't really about a rule change, that's just what's visible. What's more troubling is that policymakers are attempting to fix a perceived problem that they don't really understand. A new rule will not fix the problem.

According to information published by the Insurance Research Council, almost 13% of all automobile accidents in the U.S. are caused by people who have no insurance. Yet, it's illegal to drive without insurance in almost every state.

I got some breaking news for you…some people do bad things and writing new rules won't change it.

The new rule implies that what's in your client's best interest has an absolute right or wrong. And before you think it…yes, fraud is always wrong.

But…what's in my clients best interest is highly subjective and that has not changed–rule or no rule.

Are increasing COI charges really a problem with universal life insurance? Or could it be that competence in understanding policy design (from the outset) and management is actually more important? Today we're discussing an ongoing lawsuit between a family and Nationwide regarding a couple of variable universal life policies that are owned by an ILIT (irrevocable ... Keep Reading

 

Are increasing COI charges really a problem with universal life insurance? Or could it be that competence in understanding policy design (from the outset) and management is actually more important?

Today we're discussing an ongoing lawsuit between a family and Nationwide regarding a couple of variable universal life policies that are owned by an ILIT (irrevocable life insurance trust).

Episode 70 marks only our second FAQ episode since we started the Insurance Pro Blog Podcast. But it proves that we do indeed love the questions that we get from our audience, so keep'em coming our way. We'll do our best to get to them in our upcoming Q&A episodes. We were planning to answer ... Keep Reading

Episode 70 marks only our second FAQ episode since we started the Insurance Pro Blog Podcast. But it proves that we do indeed love the questions that we get from our audience, so keep'em coming our way. We'll do our best to get to them in our upcoming Q&A episodes.

We were planning to answer three questions today. Alas, our attempts at brevity fell short and so we only answered two questions.

Here's what we tackled in episode 70:

1. Is the waiver of premium rider worth the cost and what does it really do for you if you become disabled?

and

2. How do you distinguish a “good advisor” from all the rest? The financial services industry views an advisor/agent/producer as top notch if they generate more revenue than everyone else. But…is that the metric you (the client) should be using?

And seriously, keep the questions coming our way, we may address your questions in a future broadcast or mash them up with other questions if we believe it provides a better context for understanding.

Today's episode revolves around a discussion of the LEAP system and how it contributed to the revocation of an insurance agent's license. An agent in Ohio had his insurance license revoked after using the LEAP system to sell life insurance as an investment. Now, this happened back in April 2016, so I wouldn't consider it ... Keep Reading

 

Today's episode revolves around a discussion of the LEAP system and how it contributed to the revocation of an insurance agent's license.

An agent in Ohio had his insurance license revoked after using the LEAP system to sell life insurance as an investment. Now, this happened back in April 2016, so I wouldn't consider it breaking news, however, it's still a discussion worth having.

At the core of our episode…is LEAP the real problem (as depicted) or did the agent lose his license because the policies he sold were structured incorrectly?

The headlines and structure of the case documents themselves would lead you to believe that LEAP is the core of the problem but we're not so sure about that. You have to read between the lines on this one and look harder at the actual numbers revealed in the case to reverse engineer what REALLY happened.

Download the document from the Ohio Department of Insurance

Please note: This episode is not intended to disparage the use of LEAP or any other methodology for selling life insurance. We believe the actual problem in this case is that the former agent represented the life insurance as functioning one way and delivered something completely different.

In fact, if you want to better understand how this sort of thing actually happens, I encourage you to read a piece we published several years ago, The Third Dimension of Cash Value Life Insurance. It will shed some light on how this sort of thing happens.

We often hear stories of sorrow regarding evil life insurance companies. Stories that depict how a person paid thousands of dollars in premium only to have the insurance company steal all their cash and cancel their coverage. But does it really happen that way? Anything is possible I suppose, however, when we took a look ... Keep Reading