What You Need To Know About Facebook’s New Ad Policies

“Your Facebook ad has been disapproved”

Facebook Ad Not Authorized

Those six words have been throwing a wrench in the works for more and more business owners as of late. If you haven’t encountered them yet, the chances will be even greater you will in the coming weeks. In response to the ongoing data, privacy, and “fake news” scandals, the world’s most popular social media platform is making some changes. These changes could have a direct impact on your marketing strategy.

Politically-Motivated Policies

In the interest of transparency, Facebook is tightening the belt on ads pertaining to elections and political issues. The new rules include new verification requirements for advertisers and “paid for by” disclosures on their ads. While the move is intended to slow the spread of “fake news,” there are a few kinks left to be worked out of the screening process. There have numerous reports of ads/sponsored posts being incorrectly flagged as “political.” The flagged ads won’t be approved until the advertiser submits certain personal information.

The policy itself was written with politicians, lobbyists, and election campaigns in mind. However, content from a variety of businesses has also been caught in the crossfire of Facebook’s increased scrutiny. Facebook launched the new political ad rules in late May. The rollout included a list of 20 initial issues that would be used to determine whether an ad was political in nature. A few topics that appear on that list might help us understand why your post about a retirement planning seminar was disapproved:

  • Budget
  • Economy
  • Health
  • Social Security
  • Taxes

Sure, it might seem silly to draw any sort of connection between the November elections and a post about how a tax-deferred annuity can supplement Social Security benefits. But, with a screening process that’s based on a combination of human judgment and a still-evolving algorithm, it’s happening. Has it happened to you? If so, don’t expect much help from Facebook. The company is passing the issue off as growing pains and claims it will straighten itself out over time. This forces non-political advertisers whose content has been flagged to appeal the decision and/or complete the authentication process. Both of these require more time and energy than most of us would rather spend on clients and prospects.

But wait, there’s more…

Dislike Button

The content of your Facebook ad isn’t the only thing under the gun these days. The ways in which you target your audience is also undergoing a major overhaul. The end of June will introduce the first step in Facebook’s move to eliminate “Partner Categories” from the available ad targeting audience. Partner categories consist of consumer data provided by third-party companies that advertisers use when fine-tuning their customized audience. This means that several behavioral and demographic parameters advertisers used to better reach those consumers who would benefit most from their products/services will no longer exist on Facebook’s advertising platform.

What does this mean for you?

Advisors often used income-based targeting options to find qualified prospects. Net worth, homeownership, and financial behaviors have long been used by advertisers when customizing an audience. Beginning June 30, those parameters will no longer be able to be used for creating new or editing existing campaigns. On October 1, any ads using data gleaned from partner categories will no longer be delivered.

Does this spell the end of Facebook advertising? No, absolutely not. Facebook will still remain one of the most valuable ad platforms available. Even after the third-party data is gone, the remaining demographic, behavioral and interest categories will remain. You’ll just have to be a little more creative when doing so. Here are a few tips that can help you work around the changes to Facebook’s advertising platform:

Geotarget Affluent Communities

You can no longer use Facebook to specifically target homeowners who make at least $75,000 a year. However, you can use what you know about your own city to geo-target consumers who live or work in a specific area. This is a good tactic that can be used to create a customized audience of potential prospects.

Replace Behaviors with Similar/Relevant Interests

While Facebook ditched third-party data, that doesn’t mean they’ve stopped learning everything they can about its users. The social media giant uses a variety of online activity to create comprehensive profiles of its users. This includes visited websites and Page “likes.” If you ever expressed an interest in clog dancing, Facebook thinks you might be receptive to an ad about clog shoes. The same goes for those who have searched for things like annuities, retirement, and life insurance. This approach might take some experimentation but can be an effective workaround in the absence of third-party data.


Facebook’s targeting policies apply to info compiled by third-party data mining companies. But the rules do not prohibit businesses from targeting people based on data they’ve collected themselves. Consider using surveys, forms, or landing pages to help build an audience of consumers who want to see your ad.

In all likelihood, we’re just seeing the tip of the iceberg when it comes to Facebook’s ad overhaul. This means we should expect the “formula” for a successful ad campaign to change with the seasons. Keeping up with it all can take more time than most of you have to spare, but you also can’t afford to waste resources on ineffective advertising.

This is where we can help. If you’d like to learn more about how to keep ahead of the curve, call us today.

Surviving the Summer Slump

Summer has officially arrived! The weather is getting hotter, but for many, business is cooling off. It’s not uncommon for advisors to experience a slump from June to late-August. Clients and prospects are away on vacation or too busy with summer activities to worry about finances. With fewer appointments and less on your plate, how will you spend your summer?

Some use the downtime as a chance to recharge before things pick up again in the fall. Others simply wait it out and accept the summer slump for what it is—an often-unavoidable decline in business. However, as an entrepreneur, you probably aren’t the type to sit around and wait for business to come in. And why should you? You might not produce many results over the summer, but you can still be productive. A little extra effort and creativity is all it takes to beat the summer slump and make long-term improvements to your business. Here are two suggestions to consider.

Get Outside

The summer months are filled with a variety of outdoor activities, events, and community gatherings. In fact, some of those prospects you’ve been trying to reach have probably already made plans to attend one. You should join them! Many community events offer sponsorship or vendor opportunities to local businesses. This can be a good opportunity to boost brand awareness and put your business card into the hands of several potential clients.

Reflect & Refocus

This would be a good time to take a close look at the first half of your year. How are your results matching up with the goals you set for yourself? What are you doing right? What could you be doing better? Even the most successful advisors can benefit from a little self-evaluation. Careful scrutiny of your strengths, weaknesses, wins, losses, and everything in between is a necessary step toward taking your business to the next level.

There are countless other ideas that are worth considering if you want to maintain some momentum during the slow season. Want to hear more? Our 2018 Summer Survival Kit is full of tips that can help create new opportunities while the competition is sitting at the beach.

Fill out the form to claim your complimentary kit today.

Key Takeaways From the Latest SSA Board of Trustees Report

The latest report from the U.S. Social Security Administration’s Board of Trustees brought some troubling news for future retirees. For the first time in 36 years, the SSA will have to tap into its trust fund in order to pay for the program this year.

The June 5 announcement puts a spotlight on the worsening long-term financial status of the combined asset reserves for both the Old-Age and Survivors Insurance and the Disability Insurance trust funds. According to projections, the OASI trust fund will be depleted by 2034. This is one year earlier than previous estimates suggested. The result will be a 79% reduction in benefits. The lifespan of the DI trust fund was actually extended from 2028 to 2032. When this occurs, only 96% of benefits will be payable. When combined, these wells are expected to run dry by 2034. As a result, recipients could lose roughly 20% of their benefits.

A Brightside to the DI Fund Depletion?

While the four additional years projected for the DI trust fund did not budge the overall combined depletion date, it was perhaps the closest thing to “good news” contained in the report. The changed depletion date for the DI reserve is “largely due to continuing favorable experience for DI applications and benefit awards.” In other words, fewer people are claiming disability.

This might suggest that more people are recognizing the value of personally-owned disability insurance as an alternative to SSDI. Perhaps the possibility of reduced retirement benefits could be a much-needed wake-up call for pre-retirees. As noted in the recent Marketing Corner post covering Social Security awareness, more than 40% of people aged 50 – 64 plan to use Social Security as their main source of retirement income.

An Insolvency Crisis?

So, overall, should we start freaking out over the looming Social Security crisis?

Yes, but no.

Shortly after the report was released, headlines and social media posts containing terms like “insolvency” and “bankruptcy” started spreading like wildfire. For many, the news re-ignited fears that they would reach retirement with no benefits. The projected insolvency should be taken seriously, but a little context is needed in response to the alarms being sounded.

The Board of Trustees “consider the trust funds to be solvent at any point in time if the funds can pay scheduled benefits in full on a timely basis.” The words “trust funds” and “in full” should add a little clarity to the overall situation. The trust fund exists to cover the gap between the payroll taxes used to pay for the program. Additionally, the funds cover the actual amount needed for the year. But trust funds do not have “borrowing authority.” When the money is gone, it’s gone for good and the gap will go uncovered. However, payroll taxes will still keep the program alive, albeit in a crippled state. Benefits will still be paid but could be lower and take longer to come.

Cause for Concern

A depleted trust fund means a significant reduction in benefits for everyone. The current average amount of a monthly Social Security benefit check is roughly $1,500. Not really enough for a “financially-secure retirement,” is it? For many, it’s barely enough to get by. We can only imagine the hardships that a reduction in benefits will bring.

There is still time for lawmakers to make the changes necessary to avoid the coming crisis. Lawmakers have presented possible solutions. One option would see a gradual increase in payroll taxes to further raising the retirement age and lowering the cost-of-living adjustments. That said, waiting on a viable solution from Capitol Hill might not be a risk everyone is willing to take. Those facing retirement in 15 or more years will have to find additional income to supplement their Social Security benefits. And doing so means they have to start planning now.

Last month’s post on Social Security awareness asked advisors what they are doing to educate consumers on the program’s retirement benefits. In the wake of the Board of Trustees report, that question bears repeating. What are you, as an advisor, doing to engage more consumers and stress the importance of an alternative/supplemental source of retirement income?

5 Reasons Why Agent Recruitment Can Be Difficult (And How We Help)

One of the biggest challenges agency owners face is recruitment. Without quality staff under your brand, how does your company grow? How do you target motivated people that will successfully join your vision and process?

Below we discuss five reasons why agency recruitment can be difficult and how we can help your firm.

Your ideal agents may be harder to find than you think.

Ideal Candidates Are Hard To Find

New agents may be molded to fit your agency’s approach and vision. Experienced agents will have fluency with product lines and sales techniques. But each also carries disadvantages. New agents may require longer on-ramping, as they may lack knowledge base and drive. Older agents may be less willing to be coached.

Generally, when you want to bring someone under your banner, you want them to have proven experience in the industry, but not so much that they will be aging out of the field soon. This means the number of prospective agents who can become long-term assets for your company is smaller than you realize. There is still great opportunity; you just need to spend more time and effort marketing to the right candidates.

Fill out the form below to claim your Agency Accelerator Guide

The trap that many agencies fall into is taking too much risk on less-than-ideal candidates. You want to grow, you need staff right away. But investing the time and money going after your ideal candidates can pay off huge.

How We Help: Legacy Financial Partners can target and manage your ideal candidates. With a large nationwide database, we can put you in contact with candidates that meet your experience requirements.


Cleary setting expectations with new agents can prevent issues down the line.

Expectations Not Clearly Defined

We find many agencies lose new agents because expectations are not clearly defined between the two parties. Terms of employment are often casual, handshake deals, without outlines as to what determines success. Putting KPIs and metrics in a document such as an employment agreement can put you both on the same page. You should also clearly describe the support, coaching, and tools available to new agents.

How We Help: From our experience working with both agencies and individual advisors, we can help your dial-in expectations, goals, and metrics that are reasonable to both parties, with support offered to you as the owner and your new agents.

Your Value Proposition Is Fuzzy

As with your consumer prospects, you should be able to articulate your distinct advantage to agent prospects. Why should an individual agent want to join your firm over others? How are you getting this message out?

For most agents, it won’t be one single thing that entices them to join your firm, but a mix of things, such as:

  • Comp
  • Prospecting and Coaching Support
  • Your Firm’s Success/Branding
  • Independence
  • Specialty Programs/Tools (exclusive, proven marketing programs)

How We Help: Legacy Financial Partners has worked with numerous agencies and agents to identify their value proposition. Our support helps you develop/enhance your business. And through Legacy, you will have access to the marketing tools, programs, and support your agents desire.


Your Website and Marketing Materials Are Outdated (or non-existent)

A prospective agent is going to check your web presence and marketing materials at some point in the engagement process. You want to give them the impression that you are a modern, forward-thinking organization. An old website can turn away potential employees, the same way it can turn away prospective clients.

And what about your marketing materials? Do you even have agent-facing recruiting brochures or landing pages? These can be very helpful as you guide a candidate to join your company.

How We Help: Legacy Financial Partners is a digital marketing organization as much as we are a brokerage. We create progressive and eye-catching websites, landing pages, email templates, brochures, and more—all designed to leave your clients and agents with full confidence in your services.


Recruiting quality agents takes time–a resource you don’t always have.

Good Agent Recruitment Takes Time

For agency owners like you, time is one of your most precious resources. Not only are you likely servicing your firm’s top dog clients, but you are also responsible for keeping the lights on, handling payroll and personnel issues, approving marketing (or creating marketing) and more. Being your own boss is a double-edged sword. You answer to no one, yet you are responsible for everything.

Throw agent recruitment into the mix and your time is that much less. Good recruiting takes time—in the sense that it can be weeks or even months before your onboard the right candidate and in the sense that it takes time away from your other duties.

How We Help: Legacy Financial Partners agent recruiting solutions saves you time and allow you to engage with prospective candidates further in the funnel.


Want to learn more about our Agency Accelerator Business Platform?

Request our Agency Accelerator Business Platform guide.

Going Guerrilla: Marketing Outside the Box

When you think of the different marketing/advertising methods at your disposal, what comes immediately to mind? Digital and print ads? Commercial spots with your local TV and radio stations? Social media?

All of the above are effective ways of getting your brand out there to your target market. However, they also exist in a very crowded space. One where each message is forced to compete for the attention of a consumer base who is already over-inundated with advertisements.

By limiting your marketing strategy to the “go-to” traditional methods, you are thrown into the mix others who offer the same services. Beyond that, your ads are competing against a host of other businesses; all waving their arms wildly and shouting “Hey, look over here!”

Studies suggest the average person is exposed to roughly 4,000 advertisements a day. That is a whole lot of arm waving and shouting. If you want to stand out and rise above that kind of clamor, you might have to go guerrilla.

The concept of “Guerrilla Marketing” can be traced back to the early 1980s when author and advertising guru Jay Conrad Levinson first coined the term. He used it to describe any “unconventional marketing tools used in cases when financial or other resources are limited or non-existent.”

Books have been written detailing the finer points and evolution of guerrilla marketing since it was first introduced. To this day, the overall concept remains the same and can be pinned down to one word—unconventional.

What Does “Unconventional” Look Like?

For starters, guerrilla marketing does not necessarily mean “free advertising.” After all, in order to make money, you have to spend money. However, a little creativity can go a long way when it comes to the money you invest in brand awareness.

At its core, guerrilla marketing is all about taking the consumer by surprise; presenting your business in a way that strikes a resonant chord with consumers. This is actually easier than it may sound if you don’t mind pounding a little pavement. As an independent agent or advisor, your business is based on forging real-life relationships with your consumers. You can get that ball rolling by taking your marketing efforts directly to would-be-clients.


Before the days of Facebook, you couldn’t walk past a telephone pole, public bulletin board or storefront without seeing an array of fliers promoting concerts, speaking events, garage sales, etc. In fact, you probably still see them scattered about the community. This should tell you there is still something to this overlooked, but cost-effective promotional vehicle. Consider hanging a few fliers for your next seminar. Just make sure they’re in a well-trafficked area and posted with permission

Plant A Seed

Community gardens and pocket parks are popping up in neighborhoods all over the country. Chances are, you pass by one or more on a daily basis. Chances are even greater that you pass by one or more locations that would greatly benefit from a little beautification. Look into filling those voids with a flower garden and bench, complete with a “Brought you by [Your Brand Here]” plaque that lets everyone know that you have a vested interest in the community.

Make an Appearance

Think about all the various community events, gatherings, festivals, and parades that take place in your area. Are you getting involved in any of that action? You should! Keep in mind that “getting involved” means more than just paying to have your brand displayed on the event poster. Arm yourself with a bag of “swag” (aka cheap giveaway items that feature your logo and contact info) and send everyone home with your brand in their pocket.

If you’re at an event with vendors, consider giving away reusable shopping or tote bags to people as they come in. Charging cables, phone holders and USB drives are also handy items that we never seem to have enough of. And don’t forget about the kids! Sure, a fidget spinner or squeeze ball with your logo might not seem like the best way to connect with people who are interested in retirement planning and life insurance. However, that’s exactly who is going to pick it up once their child puts it down.

This is just a small example of the non-traditional marketing opportunities that you could add to your toolkit. Maybe they’ll work for you. Maybe they won’t. The point is to start thinking outside of your own box. Know that you are not confined by the formulas set by traditional marketing methods. If you’re still looking for new and innovative ways to engage your target market, get in touch to find out how we can help.

Addressing the Need for Better Education on Social Security and Retirement

The obstacles that stand between an individual and a financially-secure retirement should the focus of a conversation between advisors and clients. These discussions often revolve around strategies and financial products that can protect one from outliving their income. However, recent data indicates that there is one crucial topic many aren’t talking about—a basic awareness about Social Security.

News outlet CNBC recently published a report, based on a study conducted by MassMutual, showing 47% of people aged 50 and above failed a 10-question, True-or-False quiz about Social Security retirement benefits.

Now, compare this to a 2017 Gallup poll that showed 43% of respondents aged 50 – 64 stated they would have to rely on Social Security as a “major source of retirement income.” This is the same demographic who took and, for the most part, failed the quiz.

Does This Raise Your Eyebrows?

It should. Here is a group of people who are at most 15-18 years away from retirement age and many of them don’t seem to have a clear understanding of Social Security. And this is the program that a) many of them are counting on to keep them afloat during retirement, and b) could be exhausted in less than 20 years.

Most advisors are proactive about discussing the various alternatives to Social Security benefits as a source of lifetime retirement income. However, the amount of confusion and over-reliance of Social Security is telling. It suggests that many consumers could use a crash course on the ins-and-outs of the system.

After all, knowledge is power, is it not? Even those who have already made use of more fiscally-sound retirement strategies should still take advantage of the Social Security benefits they’ve paid into over the years. And for those who are approaching retirement without a safety net, the lack of a clear understanding of how to navigate the system could lead to major challenges down the road.

Going back to the MassMutual quiz, one area that seems to be muddier than most involves full retirement age. More than 70% of those who took part in the quiz believed that their benefits would not be reduced if they claimed them at age 65.

This is false.

Social Security Clarity

For anyone born in or after 1960, the full retirement age as set by the Social Security Administration is 67 years old. If they were to claim Social Security retirement benefits at age 65, the reduction to their benefits would be about 13.3%. Given that the average monthly payout for Social Security benefits is around $1,368, the roughly $182 reduction is a fairly significant cut for someone on a fixed income.

The reduction of survivor benefits (another area that many were unclear about) is a staggering 58.3%. Given that full survivor benefits max out at 50%, that’s not quite as painful but it can still hurt if the beneficiary has little to nothing else to fall back on.

Millennials & Social Security

While the MassMutual study only included those aged 50 and older, the Gallup poll revealed that many younger workers might also be in need of a little more education about Social Security. Of respondents aged 18 – 29, 25% said they plan to rely on Social Security in retirement.

That’s almost twice the number of people in that age group who gave the same answer to the same survey taken 10 years ago. The increased projected reliance on a program that faces uncertainty in the not-so-distant future speaks volumes. Can you hear it?

Overall, this should tell us two things:

  • The need for advisors who can help prepare consumers of all ages for retirement is greater than ever; and
  • The need to educate these consumers on Social Security retirement benefits is even greater than that.

Chances are, some, if not most, of your clients are at least somewhat unclear on the ins-and-outs of Social Security retirement benefits. The question is, what are you doing to rectify that? Arming your clients with a basic understanding of how the decisions they make about their Social Security benefits can not only boost your credibility in their eyes but also set the foundation for their retirement strategy.

Legacy Financial Partners has a wide variety of materials that can help you coach your clients on this and other important topics. Get in touch to learn how we can help.

How Table Shaving and Simplified Issue Save Clients Money and Time

Consumers often cite cost and convenience (or the lack of) as reasons for not having life insurance. Any agent worth their salt should be able to counter excuses they hear from the uninsured, but convincing people to part with their time and money can be challenging. Rather than trying to convince a hesitant consumer otherwise, a better approach might be to show that you’re saving them money and time.

How? You can employ Table Shaving to help save them money and Simplified Issue to save them time. We discuss both life insurance concepts below.

Table Shaving

If everyone who wanted life insurance could qualify for the cheapest rates available, perhaps cost wouldn’t be as much of an issue. Unfortunately, consumers find that any number of health conditions (be it their own or related to their family history) and/or lifestyle factors can result in high monthly premiums.

For many, looking at the difference between what others might be paying and what they’re being forced to pay can be frustrating enough to walk away without a policy. This is why you should become familiar with the various table shave programs offered by insurance companies.

A table shave program is a way for applicants with certain health conditions to save money on life insurance premiums by meeting specific criteria and/or wellness targets. Not all carriers offer table shave programs and those that do have their own set of specific limitations, exceptions, and criteria. They’re typically used more for permanent life insurance policies, but a select few carriers also allow table shaving on term coverage as well.

A table rating can be triggered by anything (medical or non-medical) that increases the likelihood that an applicant will die prematurely. Those triggers can vary from carrier to carrier, but a few general examples are:

High blood pressure, cancer, diabetes, combined height/weight (obesity), poor family health history, sleep apnea, asthma

Mental illness, hazardous occupation, adventurous lifestyle, criminal record

Underwriting is more formulaic than fluid, which means an applicant with these, or other, impairments can be automatically rated up several tables. Table shaving offers a little more flexibility in the underwriting process for eligible applicants. Again, specifics differ from carrier to carrier, but there are a number of favorable health and lifestyle characteristics that can offset those impairments and improve an applicant’s rating.

Ideal Candidate for a Table Shave Program

Let’s say an applicant is overweight and works in a hazardous occupation.

The underwriter will most likely see these as unfavorable or risky lifestyle factors and give them a lower health class rating. This can result in higher premiums rates. However, the same applicant also undergoes routine wellness checks, exercises, and has a healthy family history. These favorable lifestyle factors can earn the applicant wellness credits that improve their health rating. The improved rating could save them hundreds of dollars each year on premium costs.

Due to all of the carrier-specific variations in table shave programs, you might need to do a little digging to find one that matches your client’s individual situation. But the potential discounts they offer could go a long way toward converting a potential client.

Simplified Issue

Like money, time is a valuable commodity these days. When a person wants something, they want it now. Not six to eight weeks from now. A Simplified Issue policy is a quick and easy way to get coverage without the medical exam or waiting period.

Granted, this convenience does come at a cost. The carrier is providing coverage without a medical exam to provide a clear assessment of the policyholder’s mortality risk. As a result, the policy is going to be more expensive than a traditional plan. Premiums are based on the amount of coverage and can range anywhere from a few dollars more to twice as much as a traditional term life policy. And coverage for most Simplified Issue policies typically maxes out at $250k.

Not everyone will qualify for a Simplified Issue policy. This is because the carrier is essentially “going in blind” by waiving the medical exam. The applicant will have to answer a series of detailed questions and submit additional personal information. This information is used by the carrier to determine whether applicants are “low-risk” enough to be approved.

The Ideal Candidate for Simplified Issue

A Simplified Issue policy is typically ideal for young, healthy people who have not previously carried a life insurance policy. Another advantage to both the consumer and agent is the quick turnaround time for these policies. The application process is fairly simple and can often take place over the phone. Typically, the application is approved or denied in a matter of days. Death benefits are available immediately after the policy goes into effect.

A few situations where a Simplified Issue might be ideal include:

  • Starting a new job in a hazardous or high-risk occupation
  • Traveling abroad or to a dangerous location
  • Medical issue or procedure that makes a person temporarily ineligible for traditional term life insurance
  • Smoker
  • Someone who takes part in dangerous or high-risk hobbies

A Simplified Issue policy is far from the most ideal product available. However, it can be a good solution for those clients who value time above all else.


May Is Disability Insurance Awareness Month

May is National Disability Insurance Awareness Month. The campaign was launched in part by the Council for Disability Awareness. It is used to educate wage earners on the importance of planning ahead should their income source be disrupted by an unexpected disability. Because many advisors and agents butter their bread with retirement planning and life insurance products, disability insurance is probably not a topic that comes up in too many client meetings.

But it should. If you’re asking why, the answer can be found within the annals of pop culture.

Dr. Steven Strange was at one time considered the top neurosurgeon in the world. That all changed one fateful night when he was involved in a fiery car crash. While Strange survived the crash, his hands—once skilled surgical instruments—were injured beyond repair. Despite months of treatment, his hands never fully healed. Dr. Strange would never perform surgery again. One tragic incident, one miscalculation on a windy, mountainside road was all it took to ruin a lucrative career.

Fans of the movie or comics know that Strange drained his life savings in pursuit of a remedy for his career-ending disability. Sure, he eventually stumbled upon an ancient mystic, gained superpowers beyond imagination, and has saved the universe a dozen or so times. But in the real world, the story of Dr. Strange would have ended with “drained his life savings.” Unless, of course, he had a good disability insurance plan

Assuming that none of your clients are superheroes, the following paragraphs (rooted in facts, rather than comic book fantasy) should illustrate the value of a private disability insurance plan.

Staggering Stats on Disability

According to the Council for Disability Awareness, at least 51 million working adults in the U.S. do not have disability coverage other than what is available through Social Security.

Roughly 48% of American adults would not have enough savings to cover three months of living expenses if something happened that prevented them from earning any income. This is an alarming statistic. Especially in light of a recent report that found nearly half of all foreclosures on conventional mortgages are caused by a disability or other medical-related setback. This is why agents and advisors should encourage their clients to consider adding disability insurance to their existing plan.

Far too many consumers believe (or at least hope) that Social Security Disability Insurance (SSDI) will be enough to keep them afloat if they become disabled. Data from the Social Security Administration reveals a much more sobering truth. At the onset of 2018, the average monthly disability payout was $1,197. That’s barely enough to keep the beneficiary above the current poverty level.

Why SSDI Isn’t Enough

Even the federal government discourages people from banking on SSDI should an injury or medical condition renders them disabled. The Social Security Administration gives a very strict definition of the term “disability.”

  • You cannot do work that you did before.
  • They determine that you cannot adjust to other work because of your medical condition(s).
  • Your disability has lasted or is expected to last for at least one year or to result in death.

Furthermore, SSDI benefits are not available for those determined to be suffering from a partial or short-term disability.

Of those who meet those guidelines and applied for benefits, only about one-third were actually approved to receive payments. And those payments typically won’t start coming in until after the roughly six-month waiting period. Someone who is forced to live within those means for several years, if not permanently, can forget about setting up or holding onto any sort of retirement nest egg.

Life insurance provides a way to soften the financial blow that comes with a death (income loss, funeral expenses, medical/hospital bills).  Clients need to know that disability insurance can provide the same protection. A personally-owned disability insurance policy, used with additional sources of income, can provide the insured with a sense of stability and security after becoming disabled. If the insured is able to return to the workforce, it can keep money coming in while they recover or learn a new skill. This can also be the key to avoiding asset liquidation or dipping too deeply into existing retirement or life insurance funds.

Developing a DI Plan

Several factors will determine the details of an individual personally-owned disability insurance policy. First, the policyholder’s current situation should be taken into account. How much income will they need in the event of a disability? What additional sources of disability income are available to them?  How much can they currently afford to put toward monthly premiums?

Once those questions are answered, then you can start hashing out the finer points of the policy. How long must the insured be disabled before benefits kick in? How long they will receive those benefits? Most policies only pay until the insured turns 65.

An important component here is the definition of total disability. Carriers give a much looser definition of “disabled” than the government. Most look at whether the insured can perform duties related to their current job or skillset.

There are additional factors that will affect the overall policy. Do they want benefits for partial disabilities following a period of total disability? Do they want any rehabilitation expenses covered? Premium waivers, renewability options, the impact of inflation, and cost-of-living riders should also be a part of the conversation.

Be A Super-Advisor

The astonishing tale of Dr. Strange is perhaps the only example of NOT holding a personally-owned disability insurance policy working out for a person whose main source of income was taken away due to a disability. But he’s not real. And in the 12 years that May has been used to raise awareness about the value of disability insurance, the numbers suggest consumers are still slow to get the message. So, it’s up to you—Super Advisor/Agent—to the real hero here.

Next week, we’ll explore how liability insurance could have protected a science lab from litigation after a high school student touring the facility was bitten by a radioactive spider. Just kidding…

How Blockchain Technology and Marijuana Decriminalization Are Changing Life Insurance

Last week we looked at how the emergence and evolution of biometric technology are changing the face of the life insurance industry. Through wearable devices, facial recognition software, and other biometric-based developments, many carriers are embracing the future. However, biometric tech is only ONE of the many game changers that agents and advisors should keep on their radar. Two other factors—one technological, the other social— could also impact your business.

Blockchain and Life Insurance

Where the Internet was the portal that brought the industry from paper-based to automated processing, Blockchain technology looks to be the next “big thing” in the world of finance and life insurance.

Blockchain is a virtual series (or chain) of blocks containing data. It was initially developed as a way to keep track of Bitcoin transactions. Whenever a transaction is made, a new block containing a timestamped and encrypted record of that transaction is added to the chain. Anyone involved in the chain can view the data in each block. However, no single party can alter, or tamper with the records. The transparency and security of Blockchain could be the solution to many of the industry’s problems that bog down the life insurance and finance industries. Specifically, blockchain can help with longer turnaround times and fraudulent claims.

Streamlining The Death Claims Process

When a person dies, the hospital enters all relevant information about the deceased into the chain. That information is then immediately available to all involved parties. The death claims process can be streamlined into a unified system that drastically reduces the burden for the beneficiary. What takes anywhere from two weeks to six months could be done in a matter of days using Blockchain.

Mitigating Fraud

Blockchain technology can benefit carriers by significantly reducing fraud risk. An estimated 10% of claim costs are attributed to fraudulent claims. As a shared, yet secure ledger, everyone involved in the chain can view and audit any updates in real time, making it much more difficult to falsify information or otherwise commit fraud within the network.

Like the innovations in biometric tech we explored last week, Blockchain is still in its infancy. That said, more and more carriers continue to adopt a beneficiary/consumer-focused approach to their business. This sort of streamlined and modernized systemcould easily become the next industry standard.

Marijuana and Life Insurance

Another real-world revolution that is already leaving an imprint on the life insurance industry is not tech-based but rooted in social change.

As of this year, more than half of the United States has passed pro-marijuana legislation. Legal reforms at the state level have resulted in widespread changes for multiple industries. This includes life insurance.

The way in which life insurance companies handle marijuana reforms is just as varied as the states that enacted them. Many carriers will still raise premiums or decline coverage for applicants who test positive for THC. Others are responding with more lenient policies of their own. However, nearly all still require applicants to undergo a medical exam that includes blood and/or urine tests.

More Options for Marijuana Users?

Regardless of why they use (medicinal or recreational), you should encourage your client to be honest when applying for coverage. This has less to do with the legal issues surrounding marijuana and more to do with health factors. According to a  survey by Munich Re, only 29% of underwriters said their company classifies marijuana users as non-smokers. The majority of carriers out there do not differentiate between marijuana use and tobacco use when pricing policies. And despite alternate forms of use (edibles, vaping), there is little consideration given by carriers as to how the applicant consumes marijuana.

Premium Rates

Frequency and reason for use can make a difference for some companies. How often does the applicant smoke? Is there a legitimate medical reason for their use? If an applicant admits to using for medicinal purposes or carries a prescription for medicinal cannabis, the carrier may base rates on the medical condition. For the recreational user, someone who uses a few times a month is going to get a much better rate than a heavy user. Either way, it’s likely that an applicant who admits to or tests positive for any use will pay the same rates as a tobacco user.

Life insurance carriers are individualistic in their reaction to the changing tide of marijuana regulations. Some are adjusting, while others still adhere to longstanding policies. Will pro-legalization lobbyists and changing attitudes see more carriers taking a relaxed stance on marijuana? That is a question only time can answer.

A Selfie Worth A Million (In Insurance Coverage?)

Biometrics and Life Insurance

There are currently an estimated 10 billion devices connected to the internet, a number that is expected to drastically increase in the near future. Rare is the consumer who doesn’t spend the majority of their day connected to the grid, via smart phones/homes/watches/etc. We love our gadgets and use them extensively in our daily lives, but almost every device on the market ultimately serves the same purpose—collecting data.

Life insurance carriers rely on personal data for underwriting purposes but collecting that information has traditionally been a lengthy process that involves medical exams and mountains of paperwork. Today’s “I want it now” society has given rise to a consumer base unwilling to wait the weeks (or longer) it can take carriers to approve a policy.

In fact, the 2017 Insurance Barometer Study published by LIMRA and Life Happens found that 51% of consumers surveyed listed “faster sign-up process” as an important factor when buying life insurance. That same study found 7 out of 10 respondents would be more likely to purchase life insurance priced by data and without a physical exam. The industry is responding by delving into the world of biometric data.

According to Munch RE, wearable tech (and the analysis of biometric data gleaned from these devices) has become the catalyst for change to the traditional underwriting process. Select carriers first started using biometrics a few years ago by giving wearable fitness monitoring devices (Fitbit, et al.) to new policyholders.

Programs like this are modeled after wellness initiatives, but also allow for quicker, cheaper, and, if the research is to be trusted, more accurate risk assessment. While not yet commonplace, several carriers are looking at biometrics as a way to improve consumer experience in a number of ways, including expedited policy approval and discounts/perks for health-minded customers.

The legalities and consumer confidence surrounding biometrics as it relates to life insurance are still being determined. It’s a given that any personal data used for policy underwriting (whether it be through traditional or tech-based means) is both necessary and submitted voluntarily. For agents and advisors, it will likely be more challenging to convince a Baby Boomer into allowing an insurance provider to track their physical activity than it would a Millennial. Concerns over who can access that data and what they’re doing with it might outweigh the enticement of policy discounts or third-party perks. Of course, when technology presents a problem, it can be quick to offer a solution.

A new product being rolled out by Lapetus Solutions uses facial recognition software to add an extra layer of security to the customer’s account and help mitigate fraudulent claims. The platform—Cronos—also incorporates biometrics in ways that go far beyond activity tracker-based programs. In addition to the enhanced security, Cronos’ facial analytics technology can scan a customer-submitted selfie, along with additional data, to predict individual life expectancy.

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The company claims their product, which became available last year, can eliminate the need for physical examinations and provide quotes within minutes. Essentially, the software scans an image of the applicant’s face and extracts biological, physiological, genetic and behavioral information. This information, combined with other data, can—in theory—predict life expectancy and mortality risk more accurately than medical exams. Lapetus is also working on further innovations that could potentially identify early warning signs for various diseases and determine whether the applicant is, or once was, a smoker.

The jury is still out on how effective and accurate this technology truly is, and how heavily it will affect the life insurance industry as a whole. That said, this sort of innovative use of biometric-based tech is undoubtedly leading the industry into a brave new world.

Next week, we’ll examine other emerging social, technological, and industry-based trends that are changing the game for independent agents and advisors.