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NAIFA Kicks Off Ambitious Agenda

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Las Vegas

When Kwame Jackson spoke before a packed general session of the National Association of Insurance and Financial Advisors Convention and Career Conference here, the words he uttered were undoubtedly music to the nearly 2,800 delegates in attendance.

“Im living proof of why its so important to include life insurance in financial plans and to plan for the unexpected,” he said. “Prudent planning and life insurance enabled my mother to fulfill her promise of sending her kids to college so that they could do even better for themselves than she did for herself.”

The presence of Jackson-star of the hit reality television show “The Apprentice” and a spokesperson for Life Insurance Awareness Month-also spoke volumes to the marketing muscle that NAIFA intends to wield during the coming year. The organization, say NAIFA executives, will build on a much-improved balance sheet to raise public awareness of the value of life insurance, as well as to realize ambitious membership and legislative objectives.

“Now that were financially sound, were going to do 2 things really well: political advocacy and adding to benefits that will impact our members financial bottom line,” says Randy Kilgore, NAIFA immediate past president.

NAIFAs strong financial position represents a significant turnaround for the organization, which only 2 years ago was facing insolvency.

C. Robert Brown, who was inducted as NAIFAs president at the meeting, also credits NAIFAs Transformation Task Force with narrowing the organizations focus (political advocacy, member benefits, membership, governance and administration), which he describes as key to boosting membership. But the process, he acknowledges, was not painless.

“It was gut-wrenching,” says Brown. “Any time you revise your mission statement, there will be those who will voice a difference of opinion. We had to consider everyones viewpoint.”

The exercise paid off. NAIFAs membership now stands at 65,000. Thats 5,000 more than the organization had budgeted for recruitment in 2004, though down from the 67,700 recorded in 2003. NAIFA is aiming to reach 75,000 by next year.

To entice prospects, NAIFA is looking to craft benefits around 4 practice specialties: life insurance, annuities, health insurance and employee benefits. To that end, it is partnering with other organizations that offer complementary products and services.

Among them is The American College, Bryn Mawr, Pa., which now offers to NAIFA local associations sales skills training leading to the LUTCF (Life Underwriting Training Council Fellow) designation. The college also delivers Horizons, an advanced learning system that allows NAIFA members to complete the CFP curriculum, plus 5 courses toward the CLU and ChFC designations. (LUTC also provides credits toward these designations.)

American College President and CEO Larry Barton told meeting attendees that the college is additionally teaming with NAIFA to roll out, by next year, a new financial advisor program based on the LUTC training model.

“The year-end goal is to make our member benefits package so rich that it becomes economically impractical for a prospective member to pass on joining a NAIFA local association,” says NAIFA CEO David Woods.

NAIFAs educational and sales resources extends to other initiatives the organization helped to kick-start. NAIFAs Leadership in Life Institute (LILI), a leadership development course for NAIFA members that nurtures personal growth, now has a presence in 18 states and 160 graduates.

NAIFAs Young Advisors Task Force (YAT) developed marketing and “how-to” resources to address the needs of young advisors. Among them: networking, mentoring, education and sales ideas; plus guides on the benefits of NAIFA membership, how to start a YAT group in the advisors locale, and how to hold a successful networking event.

As one of 7 founding members of the Life and Health Insurance Foundation for Education (LIFE, now 10 years old), NAIFA contributed $400,000+ in dues to help fund LIFEs public education programs. Life Insurance Awareness Month (LIAM), the latest of these, aims to reach an estimated 50 million Americans who lack life insurance or are underinsured.

Kwame Jackson, LIAMs first spokesperson, is only the most visible representative of a wide-ranging effort targeting consumers. Nearly 100 industry companies are supporting LIAM to make September 2004 a record month for insurance sales, according to Woods. The firms collectively sponsored ads in Newsweek and Time magazines and 22 one-minute radio spots as part of $2.5 million ad campaign.

LIFEs initiatives arent limited to adults. The organizations next-generation high-school education program has reached 41,000 schools, 600,000 classrooms and 18 million students nationwide, says Woods.

NAIFA executives view the consumer education initiatives as key to insuring the vast market of middle-income families that are uninsured and underinsured-and therefore crucial to staving off government assaults on the tax-free status of death benefit proceeds.

The danger of that assault, Woods warned attendees during a general session, can be expected to mount in tandem with the federal governments red ink.

“If we as an industry continue to sell only to the top of the economic pyramid-if we dont get [insurance] products to all Americans-then it wont be long before Congress removes the tax advantages of life insurance.”

“The current deficit is $450 billion,” he adds. “Last year, the nations life insurance companies transferred $400 billion in mostly tax-free death benefit proceeds to beneficiaries. Where do you think Congress will go to fill its [budget] hole?”

To guard against this possibility, NAIFA is ratcheting up lobbying efforts on Capitol Hill and in state legislatures, backed by a fresh infusion of cash. NAIFAs political action committee raised $62,000 during this years convention, according to NAIFA spokesman Jim Edwards.

Together with other industry groups, NAIFA is aiming to blunt initiatives deemed to be a threat to the tax-favored treatment of life insurance.

At the federal level, these include congressional attacks on corporate-owned life insurance; proposals by members of Congress and federal regulators to eliminate payment of mutual fund distribution and marketing expenses (12b-1 fees) that NAIFA members receive as compensation for ongoing service and advice; and a Bush administration proposal to create a tax-favored Lifetime Savings Account (LSA).

The last, as currently envisioned, would allow individuals to deposit up to $5,000 per year tax-free into an LSA account. They also could withdraw the money at any time, tax-free and without penalty.

“Why would anyone not buy term [insurance] and invest the difference with one of these so-called Lifetime Savings Accounts?” asks Woods. “We believe they are so fraudulent that weve coined a term, short-term spending accounts.”

To be sure, not all of NAIFAs federal lobbying efforts are in opposition to congressional or administration proposals. Two bills that NAIFA favors are an established business relationship exception to the do-not-fax rule, set to go into effect in 2005, and a bill to make life insurance premiums tax-deductible.

“Tax-deductible life insurance is not only possible, but, I would argue, essential if we dont want more government and higher taxes,” says Woods.”

Reproduced from National Underwriter Edition, September 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Reproduced from National Underwriter Edition, September 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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