What we advocate
At Finseca, we believe that every American should be financially secure and be able to live out their version of the American dream. While everyone’s path will look different at different stages of their lifetimes, we believe having a plan that includes life insurance, retirement, and investments and working with a financial security professional are the foundation to making your dreams a reality.
Our mission as an organization, and the mission of the financial security professionals we represent, is to advocate on behalf of the clients and communities our members serve on their journey towards financial security. Policies that promote the abilities for Americans to save more, have access to life insurance products and advice, and prepare for retirement enable more Americans to lead financially secure lives.
Finseca members serve their clients in a multitude of roles: across kitchen tables with families, leading offices of financial security professionals, and ensuring that financial security products are readily available in the market. As practitioners working on the ground, they have intimate knowledge of the realities of the marketplace and are an incredible resource for policymakers. By translating the experiences and needs of the clients into appropriate legislation and regulation, Finseca members can help more Americans reach their goal of financial security.
Learn more about Finseca’s definition of financial security.
Americans have choices when it comes to their financial lives. One thing is clear – studies have consistently shown that a holistic financial plan, that includes retirement planning, and combines the protection of life insurance products, annunities for permanent lifetime income, and investments consistently produces better financial outcomes for families.
Finseca members work with their clients to uniquely tailor a holistic financial plan to achieve financial security and pursue the drams of each family and business. The need for this planning rises daily – there is currently a 12 trillion dollar gap between what Americans have in life insurance coverage vs. what they need. A 7 trillion dollar gap between what Americans have saved for retirement vs. what they need. Despite those gaps, only 34% of Americans work with a financial professional. Millions of Americans could be better protected and more financially secure by working with a trusted professional in their community.
Policymakers need to do more to incentive Americans to work with financial security professionals, especially against the backdrop of a strained entitlement system that may not be able to meet the need of Americans in the future. Doing nothing means that American families may fall further behind. This has measurable costs to those who don’t work with a financial security professional on holistic planning. One study estimated that cost at 7.5% of household income every year.
Individuals and families insure the things that are near and dear to them – their homes, their cars, and their health. Importantly, individuals need to protect one of the most critical assets of all, the ability to work and provide for their families.
Life insurance is one of the best financial protection and long-term savings tools available to families and businesses. Life insurance products protect against an unexpected death or debilitating injury or illness and can provide guaranteed income in retirement.
Ninety million American families rely on life insurance for their financial security. The life insurance industry is responsible for $20 trillion of financial protection in force and pays out $2.1 billion in benefits every day[1].
Unfortunately, too many Americans are underinsured. About 40 percent of American families[2] do not have any life insurance coverage, while those families who do have coverage have less than they need. Most experts recommend coverage that is at least seven to ten times annual income.
Permanent life insurance products also come with living benefits beyond the death benefits paid to survivors. The ability to build up the cash value of a policy over time provides a significant source of long-term savings that can be accessed during one’s lifetime. Long term care and disability riders, when combined with a permanent product, also provide the ability to use a portion of the death benefit of a product to provide liquidity should you become unable to work or need long term care assistance at the end of life.
In order to be financially secure, individuals need to protect themselves and their dependents from the unexpected. The taxation of life insurance has been thoroughly reviewed and affirmed by Congress and provides Americans with access to products that protect them during difficult times.
[1] https://www.acli.com/posting/rp19-010
[2] https://www.acli.com/Industry-Facts/Retirement-Assessment
Studies have shown that Americans who work with a financial security professional are more likely to be financially secure than those who do not – and that planning that involves both risk protection and investments performs better than investments alone. As financial security professionals, Finseca members work in the best interest of their clients every day.
Financial security professionals currently operate under a robust regulatory regime that includes State Insurance Commissioners, multiple professional licensing organizations, State and federal consumer protection regulators, as well as the DOL and SEC. In addition, they are subject to detailed requirements by the carriers with whom they work and robust internal supervisory procedures by the broker-dealers with which they are affiliated. They also face frequent and comprehensive regulatory examinations by the regulators who exercise jurisdiction over them.
Financial security professionals success is derived from building trusted relationships with their clients. However, sometimes misguided regulation can result in limiting the marketplace and cutting off services from those who need financial guidance and product choice the most. It is essential to ensure product choice and access to professional financial advice is not reduced for American families.
Financial security means not just planning for immediate needs, but also providing for long-term needs including retirement. Unfortunately, America faces a number of retirement challenges, and American families worry about retirement savings.
According to a 2019 Gallup Economy and Personal Finance poll, 54 percent of Americans are worried about not having enough money for retirement, and 42 percent are worried about not being able to maintain their standard of living. The fact that fewer workers have traditional pension plans to rely on for lifetime income, combined with the growing strain on government programs like Social Security and Medicare, adds to Americans’ concerns.
Holistic planning that includes life insurance, annunities, and investments are well-suited, and in some cases uniquely suited, to address America’s retirement challenges. In fact, $1 out of every $6 of long-term savings is invested in life insurance and retirement annuities, the only financial products that ensure retirees cannot outlive their savings by guaranteeing a paycheck for life. Additionally, non-correlated assets can provide a buffer for retirees in the advent of a down market during their retirement years.
Working with a financial security professional can help an individual get the most out of their retirement years by planning today and utilizing marketplace products.
Modern Americans face a number of increasing financial challenges – rising housing costs, stagnant wages, burdensome debt obligations and an increase in the cost of healthcare can all negatively impact the ability for an individual to achieve financial security.
Recent studies have shown that nearly 40% of Americans could not come up with $400 without going into debt or selling an asset to pay for an unexpected expense. This number rises to 60% when the number hits $800[1].
Financial security professionals counsel American families how to prepare for today while planning for tomorrow and are a critical source of financial planning for families looking to navigate an increasingly complex financial reality.
Financial security professionals choose to serve their communities in a multitude of ways – as advisors, as agency leaders, in brokerage, or in whatever way works best for them. Many choose the path of owning their own businesses and utilizing the independent contractor model for all the benefits it provides them as entrepreneurs and for the multitude of benefits it provides their clients.
The financial security profession has utilized the independent contractor model for decades as a way make sure that clients get tailored solutions from a wide variety of providers. Eliminating the choice that these professionals make will harm the financial security of all Americans.
Successfully planning for your financial future and that of your family and business over a lifetime requires certainty. Effective planning also needs predictability that should not be undercut by recurring changes in the tax code.
In the area of estate and business succession planning, uncertainty with respect to tax rules has been shown to reduce incentives for thoughtful decision-making and led to unsuccessful transfers to succeeding generations and problems for the family members, employees, and businesses affected. Frequent changes to the tax regime discourage or disrupt the effective planning currently done to help ensure that businesses, farms, and other assets are passed on and remain viable from one generation to the next.
On the other hand, a reasonable and durable estate tax regime provides the predictability to use effective planning tools that protect the family, the business, and the employees by providing liquidity to manage the transition that must occur when a owner or key employee passes, as well as cover applicable taxes.
Americans need to consistently save more than they earn, both in short-term and long-term savings, so that they can manage the crisis of the future when, not if, it arises. Working with a financial security professional can help individuals cut spending, pay down debt, and increase liquidity. With a solid foundation in which to build from more Americans can become financially secure and relieve the pressure on federal spending to meet those needs during a crisis.
For many Americans, financial security starts in the workplace. Employment and benefits packages provide the foundation upon which Americans build their financial lives and plan for retirement.
In addition to the individual life insurance marketplaces, businesses use life insurance as a crucial tool in maintaining healthy and financially secure operations. Life insurance can provide an asset to fund benefits, retirement plans, and help recruit/retain key employees. 11 million small businesses utilize life insurance.
The death of an owner or key employee can imperil the viability of the business and the employees. Businesses use life insurance to provide critical liquidity after the death of an owner or employee and provide smooth ownership transitions. With the help of a financial security professional, a business can anticipate these needs and provide certainty when it is needed most.
In addition, many businesses use life insurance to provide a long-term asset to match retirement and health benefits for their employees. This helps many small to medium sized businesses attract and retain key employees while offering them competitive benefits. Non-Qualified Deferred Compensation, often times with an offsetting corporate or banked owned life insurance policy on key employees, can be an effective tool for an individual to plan for their retirement.
Millions of workers across the country benefit from the use of life insurance by institutions, and these plans and policies provide critical benefits that need to be protected by Congress.
