In conjunction with the "Far from home" feature appearing in the January 2013 print issue on life insurance sales in emerging market countries, NUL Senior Editor Warren S. Hersch questioned insurance professionals from several of these nations about their practices. The following are written responses from Hiroshi Sasamoto, CFP, an executive vice president of the independent agency Nexus Company Limited, based in Tokyo, Japan.
Hersch: How would you describe your life insurance/financial service practice? What are your areas of expertise? Whom do you serve?
Sasamoto: I specialize in business insurance, key-person insurance and executive retirement planning for small to mid-size companies.
Hersch: How would you assess the current market for life insurance and annuities in Japan? Is the market growing or contracting?
Sasamoto: The annuity market is growing, in part because Japan's social security and pension system is facing financial challenges; and because the slowing economy increases concerns about the future. People are more concerned about living too long rather than dying too soon.
Hersch: Which life insurance and annuities products are selling well in your practice?
Sasamoto: These products include long-term level-term life, variable whole life and fixed annuities. Long-term level term life is suited to building retirement savings for business executives. Premiums are considered business expenses, exempt from taxable income.
Variable whole life is good for estate planning and estate building. Fixed annuities provide retirement income until national pension payments starts. The annuities can also provide supplemental income thereafter.
Hersch: Which life insurance-funded techniques (to be used, for example, in estate planning, business succession planning, executive compensation planning or retirement planning) are especially popular among your clients?
Sasamoto: There are tax benefits associated with using life insurance to build assets for executive retirement funds. Life insurance also provides additional options for estate planning.
Protection from premature death is available only through life insurance, whether purchased for an individual or for a business. Life insurance in Japan also provides protection against loss of income due to a disability.
Hersch: What regulatory, legislative and business challenges do you face in Japan? How do these challenges affect your practice?
Sasamoto: I am looking forward to some regulatory changes. Currently there are too many documents required to close a business insurance case. Typically, taxation changes will involve insurance. Depending on the type of change, some businesses will suspend purchasing insurance until we know what changes will be made.
Hersch: How are you adapting your practice to meet these challenges and grow your business?
Sasamoto: It's important to learn from advisors worldwide and to be aware of industry changes impacting life insurance professionals and their clients. I am constantly and proactively gathering information for myself and for my customers.
Hersch: What financial goals and objectives have you established for your practice in 2013? How confident are you that you can reach these goals and objectives?
Sasamoto: I expect to double my 2012 production and celebrate my 25th year of membership with MDRT. I will also be spending more time to develop my aspirants—agents I'm mentoring—and successors.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.