All About Retirement & Insurance


US Life Insurers Remain On Strong Financial Footing, ACLI
Speaker Says

October 2021

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A panel of executives from S&P discussed the challenges and opportunities facing the industry and several factors driving the outlook for the industry in this COVID-19 environment during the 2021 American Council of Life Insurers’ (ACLI) virtual Annual Meeting.

Kevin Ahern, managing director, North American Insurance Ratings, S&P Global Ratings, moderated the discussion, which featured Katilyn Pulcher, associate director, S&P Global Ratings, and Carmi Margalit, senior director, Life Insurance Sector Lead, Insurance Ratings, S&P Global Ratings.

According to Pulcher, capitalization remains strong for U.S. life insurers, and investment portfolio stress has diminished. Mortality claims have also declined, and demand for life insurance and annuities has led to significant sales recovery for the industry, year over year.

The life insurance sector remains a highly rated sector, she added. Ninety-two percent of companies are rated A or higher, and 93% have a stable outlook. Life insurance sales are stronger than they were pre-COVID-19.

“Sales have rebounded, and that is an encouraging sign,” she said.


In addition, second-quarter, year- to-date adjusted earnings have improved, although they were weighed down by mortality rates during the first quarter of the year. “This appears to be on the rebound,” she added. Sales for annuities, both fixed and variable, also continue to grow in 2021.

From Margalit, attendees received more good news from the ratings arena: Strong capital buffers remain and support our ratings, he said. Eighty-nine percent of rated insurers have strong or better capital. “The industry has withstood the impact of COVID-19 so far and is able to grow its capital,” he said.

In addition, share buy-back activities represent some level of strength and have increased on the back of strong earnings and improved market conditions. “We are carefully tracking this,” Margalit added.

In addition, since September 2020, deal flow in the M&A arena “has been on a tear,” outpacing that of 2019, Margalit said. In talks with company officials, a major theme has been how alternate asset managers are stepping into this space. For example, during the past year and a half, new entrants have entered the market.

What’s Ahead

Looking ahead to 2022 and beyond, Margalit offered several observations, including the following:

  • More M&A activity is likely to occur, as private equity enters the market.

  • COVID-19 is not yet over, and insurance companies will need to manage the unknown, longer-term impact of the pandemic on morbidity and mortality.

  • Low interest rates will continue to present challenges.

  • Insurtech will continue to modernize the life insurance value chain.


ACLI’s 2021 Annual Conference runs from Oct. 12 to Oct. 13, and brings together senior executives from life insurance and financial services companies to examine the business and political issues that impact the industry.

The program features general sessions with well-known speakers and more than 20 breakout sessions addressing several key areas, including investment/financial, reinsurance, compliance, retirement security, advocacy, and legislative and regulatory issues.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine.

5 Top Benefits of Life Insurance

October 2021

Life insurance is often overlooked but should be part of your financial plan

Life insurance can be essential for protecting your family financially in case of a tragedy, but many people go without it. In fact, nearly half of American adults do not have life insurance, according to a recent survey. One reason is that people assume life insurance is too expensive. For example, when asked to estimate the cost of a $250,000 term life policy for a healthy 30-year-old, the majority of survey respondents guessed $500 per year or more. In actuality, the average cost is closer to $160 a year.

5 Top Benefits of Life Insurance

Life insurance provides a number of useful benefits. Among them:

1. Life Insurance Payouts Are Tax-Free

If you have a life insurance policy and die while your coverage is in effect, your beneficiaries will receive a lump sum death benefit. Life insurance payouts aren’t considered income for tax purposes, and your beneficiaries don’t have to report the money when they file their tax returns.

2. Your Dependents Won’t Have to Worry About Living Expenses

Many experts recommend having life insurance that's equal to seven to 10 times your annual income. If you have a policy (or policies) of that size, the people who depend on your income shouldn't have to worry about their living expenses or other major costs. For example, your insurance policy could cover the cost of your children's college education, and they won’t need to take out student loans. 

3. Life Insurance Can Cover Final Expenses

The national median cost of a funeral that included a viewing and a burial was $7,640 as of 2019. Because many Americans do not have enough savings to cover even a $400 emergency expense, having to pay for a funeral can be a substantial financial burden. If you have a life insurance policy, your beneficiaries can use the money to pay for your burial expenses without having to dip into their own savings or use credit. 

Some insurers offer final expense policies. These policies have low coverage amounts and relatively inexpensive monthly premiums. 

4. You Can Get Coverage for Chronic and Terminal Illnesses

Many life insurance companies offer endorsements, also known as riders, that you can add to your policy to enhance or adjust your coverage. An accelerated benefits rider allows you to access some or all of your death benefit under certain circumstances. Under some policies, for example, if you are diagnosed with a terminal illness and are expected to live less than 12 months, you can use your death benefit while you’re still living to pay for your care or other expenses. 

5. Policies Can Supplement Your Retirement Savings

If you purchase a wholeuniversal, or variable life insurance policy, it can accumulate cash value in addition to providing death benefits. As the cash value builds up over time, you can use it to cover expenses, such as buying a car or making a down payment on a home. You can also tap into it if you need to during your retirement years.

However, a life insurance policy should not replace traditional retirement accounts like a 401(k) or an IRA. What's more, cash value life insurance is considerably more expensive than term life insurance, which has no savings component but simply a death benefit.

The Bottom Line

Life insurance isn’t just for the wealthy. No matter your income level, life insurance can ensure that your loved ones could make ends meet if you were to pass away. And, life insurance might be more affordable than you think. If you decide to get coverage, check out Investopedia's list of the best life insurance companies of 2021.

The Annuities Dirty Little Secret Number 1

Tim Heslin (via
October 2021

Annuity secrets will tell you the truth about annuities

You have probably seen this ad:


“Invest in an annuity; earn stock market returns with no exposure to losses!”


“Your annuity can only go up never down. Your funds are never at risk!”


 How can your funds only increase? How can there be no risk? What type of annuity could this be? The answer is Fixed Indexed Annuities (FIA)

Fixed Indexed Annuities tie your crediting returns to an outside source, usually the Standard and Poor’s Stock Index Fund.

How do they do that and how do they guarantee your funds against loss? How can your funds increase but never be exposed to any risk or loss?

Your funds will never equal stock market returns, and your returns will depend on your contract. There may be fees and some expenses that must be paid first so a reasonable estimate is approximately 40% to 70% of what the Index may return. Be informed and be sure these products are for you.

What is the real benefit of Fixed Indexed Annuities? Your funds are fully guaranteed and are safe and secure. Your Fixed Indexed Annuity can only increase. Fixed Indexed Annuities are best suited for people who want to protect their original principal and provide for an increase in funds linked to a major index.

Fixed Indexed Annuities vary by company and by state. Always completely understand your annuity and make certain it fits your situation. Make certain you understand the premature use charges associated with these products.

With a Fixed Indexed Annuity, your return is linked to the increase in one of several stock market indexes, such as the S&P 500. However, if the stock market goes down, you do not lose any of your money.

Most Fixed Indexed Annuities have a guaranteed minimum rate of return which is typically 1%, even if the index you invested in goes down the entire time you are invested, you will still have the minimum guaranteed growth.

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