“The key issue, I think, is what motivated the agent to sell that particular annuity: it was the highest commission product he could find. Were there other annuities that paid lower commissions and had better surrender terms? Absolutely. This is why anyone who gives financial advice must be held to a fiduciary standard. Hope he had enough left from that sale to buy cigarettes in prison.”
“Frankly, if the American life insurance industry wants to go back to being well respected, the mutuals we still have will need to remain that way.
“Eventually, the competitive force of the mutuals providing a fundamentally better product will drive the stock companies out of the insurance industry, and they will be somewhat forcibly re-mutualized as their insurance divisions are assimilated by the remaining mutual companies.”
“Our agency is focused on this problem and has been for the last 25 years. It’s our target market. But, we haven’t been getting any product support except in the last year or so. The industry is still putting a majority of its effort in the high net-worth market and the big case. There’s a good business reason for that, and we understand it in the brokerage world: a couple of big cases can make your year. To remain profitable in these low-interest environments and market instability, the need for big cases is even greater. In other words, the middle market is not buying, and when they do, it’s not a big case. We stay afloat through volume, and our operating motto is ‘sell lives.’”