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March 15th, 1999 Edition
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Industry News |
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IN GOOD HANDS - Allstate, after much anticipation that they would
buy their way into the variable annuity market, announced that
they will launch their own tax-deferred product with Putnam as
the money manager.
HEALTH OF U.S. HEALTH INSURANCE - Aegon, the Dutch giant, after
making its mega-purchase of Transamerica, reportedly will get out
of the U.S. health and accident insurance business within the
next year. This could put Bankers United, Monumental, Life
Investors and PFL Life "on the block" and make you wonder where
the business is headed. Apparently bigger is not just better,
but is the only way to do health insurance business in the U.S.
MDRT QUALIFICATIONS - We're a little late reporting this, but
here are the year 2000 (1999 production) requirements for MDRT
qualification:
- Member...............$ 57,000 eligible 1st year commission
- Court of the Table...$171,000 eligible 1st year commission
- Top of the Table.....$342,000 eligible 1st year commission
At least 60% must come from core products (life, annuities, DI,
etc.)
VIATICALS, VIATICALS - As we review a variety of industry
publications, there seems to be an ad for viatical services on
every other page. Meaning: viaticals are popular and selling
well. This despite some concerns about investor losses
(apparently the insureds were living too long...think about that
for a minute!). For more information, check out the National
Viatical Association at http://www.nationalviatical.org
JOHN HANCOCK CHANGES - Agents with John Hancock will be elevated
to "full-service independent financial advisors" and agents who
don't "rise to the challenge" by July will have to leave. The
company is consolidating their managerial and general agency
systems into a standalone distribution organization...Signator
Financial Network. Signator will sell other company products, as
well as Hancock products, and agents will be expected to deal
with customers in the $75,000+ income range.
HAD TO HAPPEN - The growing popularity of Internet stock trading,
as well as the associated problems, continues to draw SEC
scrutiny. Reports are that SEC regulators are in the process of
making "routine" visits to online brokerage firms, looking at
such issues as advertising, what customers are being told about
the execution of their orders and operational capabilities.
LTC AGENTS - You already know that LTC is the fastest-growing
segment of the insurance business. Now get your fair share.
This system consistently brings in 50-80 qualified seniors to an
LTC seminar. Accelerate your sales and sell more policies more
quickly. Build an incredible residual stream. Click for
details: http://www.nfcom.com/promo.cgi/ltcenews
CITIGROUP SALES PLANS - Citigroup is taking steps to begin
selling Citibank customers the investment and insurance products
offered by Travelers. Plans call for Citibank to train and
license up to 3,000 of its branch employees in financial analysis
and sales over the next six months. Problem is that long lines
and fees have "encouraged" more and more bank customers to access
banking services through ATMs, telephone and computer.
Citibank's challenge is to figure out how to lure those customers
back inside the bank.
SPEAKING OF BANKS - On Sunday, Fleet Financial Group announced
its plans to acquire BankBoston for $16 billion in stock. The
deal will create the eighth-largest U.S. bank. FleetBoston
Corp., to be located in Boston, will thus become the pre-eminent
New England bank.
WHAT'S IN A NAME? - It is almost universally agreed that using
the term "Private Pension" is a compliance "no-no" in describing
insurance as a vehicle for retirement savings. However, if you
call it "Life Insurance Supplemental Retirement Plan," you are
not only on safe ground, but are also doing your clients a
service. The March 1, 1999 issue of National Underwriter has a
nice article on the subject by Lincoln National advanced
underwriter Alan Fry.
WHAT'S IN A NAME II? - With very strong name recognition, what
does Mutual of Omaha call itself if they choose to convert to a
stock company? The Nebraska Insurance Commissioner has
tentatively approved "Mutual of Omaha, A Stock Company." We had
suggested "Wildlife of Omaha," but....
NAIFP? - The National Association of Life Underwriters (NALU),
following the lead of other industry organizations, is expected
to vote in September to change its name to the National
Association of Insurance and Financial Professionals (NAIFP).
Many preferred the National Association of Insurance and
Financial Advisors (NAIFA...it is easier to say) but, you guessed
it, compliance concerns axed it.
HO HUM, ANOTHER SALE - Royal & Sun Alliance will sell its U.S.
life insurance operation to Swiss Re. The financial strength of
the soon-to-be owner of Royal Maccabees is said to be a positive
for the Charlotte, NC-based company.
LTC FOR FEDERAL EMPLOYEES - Congressional hearings are beginning
on a long-term care program for federal employees. According to
the administration, the cost will all be borne "initially" by the
federal workers. That "initially" scares the Republicans, and it
should scare us taxpayers as well. Could be the "camel's nose
under the tent."
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| | Marketing/Tax Update |
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BAD DAY - A woman came home to find her husband in the kitchen,
shaking frantically with a wire appearing to run from his waist
towards the electric kettle. Intending to jolt him away from the
deadly current, she whacked him with a plank of wood, breaking
his arm in two places. Till that moment, he had been happily
listening to his Walkman.
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MONY ONLINE - InsWeb (http://www.insweb.com), the Internet's
leading insurance marketplace, has added another big-name
insurer...MONY. While other quote services are attempting to
provide quotes from virtually any and all insurance carriers,
InsWeb appears to be positioning itself to allow consumer
"shopping," but only with top, select carriers.
WHAT DO YOU DO NOW? - As a public service, LIMRA has placed its
popular survivor's guide, "What do you do now?", on the Net. If
you or a client has a need, just go to http://www.limra.com and
click on the cover page.
BREAKPOINTS - If you sell mutual funds, you better take even more
care to ensure that you don't sell short of the fund's volume
discount (the breakpoint). The SEC is toughening up, even if the
planner uses an "asset allocation" system.
VITAL STATISTICS - According to "The Women's Millenium," U.S.
women are a growing and substantial consumer group.
o Women represent 43% of U.S. citizens with assets of $500,000+.
o 20% of working wives earn more than their husbands.
o Women own 8 million businesses doing $2.3 trillion in annual
sales.
Women represent a good, strong market for all financial service
professionals...female and male.
BROKER NEWS - A publication serving over 620,000 licensed
insurance producers in 19 states with state specific and national
content. Online content available for all others at
http://www.brokernews-online.com
FINDING PREMIUM DOLLARS - A recent announcement by the IRS
reminds us of a good source of premium dollars. Through March 6,
more than $52 billion of income tax refunds were issued by the
IRS, an increase of 16.2% over the same period last year. The
average refund was $1,677, up from $1,450 last year. Don't
forget to ask your prospects and clients if they are "over
withholding" and talk to them about putting that money to better
use.
CHEAP TERM? - This from guru Howard Wight...suppose term
insurance gets so "competitive" that an individual can buy
$1,000,000 of term insurance for $1 per year. There's only one
catch...this policy expires just before you die. It was a great
deal...it just didn't work. Studies have shown that less than 1%
of term policies result in a death claim. Term insurance hardly
ever works. Other than that, it's great. Sell a huge amount of
term insurance...and then convert it...once your clients
understand that they are probably throwing money down the toilet
with term.
A TOE IN THE WATER - Merrill Lynch, which has resisted offering
online trading because of the potential impact on its brokers'
commissions, is opening Internet trading to some 55,000 of its
8.4 million accounts. These select few clients are those with
fee-based accounts which pay Merrill Lynch an annual percentage
of assets. In return they receive advice and a number of
commission-free stock trades, which those customers will now be
able to execute through the Internet.
DISABILITY INCOME - After some disastrous claims losses in the
"high-end" DI market, many carriers stopped selling DI
altogether...or merged into mega-DI carrier UNUM. Some are now
looking closely at the middle-income market. If you want to see
a company that has stayed the course in non-4A risk, check out
Illinois Mutual at http://www.IncomeProtection.com/fso.htm
"PENNIES ON THE DOLLAR" - The great Ben Feldman and others have
used this approach, but Howard Wight has taken this concept to
new heights...he will actually sell you $1,000,000 for "pennies
on the dollar"...million dollar bills that is! Call Howard at
(800) 928-1251 for details about this neat prospecting idea.
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