May is Disability Insurance Awareness Month and these industry veterans have ideas that will assist you in taking advantage of this great opportunity to educate your clients!
GEORGE DAVIDSON, Secura Consultants
KAREN GARDNER, MetroDI
GREG JACHELSKI, Financial Solutions Group, Inc.
Q: If a producer has never sold DI insurance, how would you suggest he get started?
George Davidson: Disability Insurance Awareness Month (DIAM) should be a trigger for financial professionals to devote time to assure that all of their current clients understand how important this product is to risk planning.
If DI planning is not part of a client’s portfolio, a broker should clearly discuss the relevance of the coverage and help resolve this issue. If a client has DI coverage, a summary of that plan should be provided to the client and a review scheduled. A producer cannot simply abdicate this responsibility—either do the work or make sure your clients are referred to someone who does!
Karen Gardner: Producers should talk to every employed client and prospect about the need to protect their most valuable asset—the ability to earn an income. In doing that, it is important to understand how a DI policy works, what will be protected, and how a policy would pay if a client is unable to work due to injury or sickness.
Income replacement policies have many options. A new producer needs to understand the benefit each option provides in order to appropriately meet a client’s needs. The definition of a disability can vary greatly between contracts, and not all clients need the most comprehensive definition of disability. Income, education and the ability to work at another occupation should be taken into consideration when choosing the right policy.
What could prevent a surgeon from doing his job is not the same as it would be for an attorney. Some income replacement products provide benefits when an insured cannot do the substantial and material duties of his occupation, and some contracts pay only if a person cannot work at any job. Income replacement insures duties, not titles, so that is why understanding what your client actually does at his job every day is important.
Another important note is that policy conditions and terminology varies among carriers. One carrier may refer to “own occupation,” while another may say “your occupation” and still another “regular occupation.” This is true for other options and riders that are part of each contract. What constitutes a catastrophic or residual disability varies from carrier to carrier as well.
To effectively sell disability income, new agents must take time to read and understand the terms of a contract before presenting it to a prospect. We often receive phone calls from agents who are on the way to their appointment, wanting to review and/or learn the basics about the proposal they are about to present. That is why we ask every producer to read through the proposal and then call us to discuss it before their meeting with the client.
There are many resources available to help get the message out about the need for DI and to help producers better understand the provisions that are available. Lifehappens.org has many articles and videos that speak about the value of income protection. We also post DI basics on our website for agents to familiarize themselves with products and definitions.
Producers always need to ask their clients: “What would you do if you were sick or hurt and could not work? How would that impact your family and assets?”
Greg Jachelski: Most people are unaware of their need for disability income protection. Those who may have employer-sponsored disability income protection are generally not aware of the benefits they have or don’t have. The fact is that 60 percent of gross, non-bonus income protection may equate a net of only 35 to 40 percent of base income protection after taxes, COBRA and any other benefit coordinations are accounted for. A skilled DI specialist can get that number up to 100 percent.
Q: If a producer has sold DI, but with mediocre success, how would you guide him to the next level?
Gardner: Producers need to know what price point is affordable for their client in order to tailor a product to fit their client. Some producers tend to oversell by adding extra riders when, in fact, a plan with fewer bells and whistles is better than no plan at all.
Our experience shows that managing the client’s expectations from the beginning with thorough field underwriting will help a producer succeed in placing policies. Pre-existing conditions, unusual job duties and income can affect the price and the benefits that are available. If a producer is thorough in his fact-finding prior to presenting a proposal, the plan will be tailored more accurately to the client. In turn, once a plan is underwritten, it will be more likely to be issued as applied for.
When policies are issued with unexpected limitations, exclusions or higher premiums, clients feel they are not getting what was quoted and will often reject a policy. Pre-qualifying income, job duties and health before presenting a quote dramatically increases success rates.
Jachelski: There are a couple of paths one can take. First, I would strongly suggest that brokers become students of disability income protection. Enroll in the Life Underwriting Training Council’s Disability Income Course offered by the American College. These courses are generally available through local NAIFA organizations. Next, review all marketing materials, Powerpoint presentations and articles available from companies specializing in disability income protection. Also, you might try doing joint cases with fellow agents who have successfully incorporated DI product sales into their practices.
The best way to learn and understand the importance of DI protection is to work on an actual case. Start with your current clients and find out what, if any, benefits they have.
One approach I would suggest is to send an empty envelope with only your return address and a stamp to a list of your clients. You will be surprised how many calls you will receive, letting you know that there was nothing in your correspondence. When you talk with them, let them know that “nothing” is what they may receive if they are sick or disabled. Then suggest that you get together with them to make sure they are never in such a situation.
Davidson: Discipline is the key to successfully implementing any new strategy. You must have a plan and then execute it.
If a producer has an established practice, then the road may be a bit easier. I suggest that an advisor should review his existing client information and filter for five characteristics:
1. Between 30 and 55 years of age.
2. Professional, self-employed or employed earning more than $75,000 a year.
3. Stable employment and earnings for the last two years.
4. Children still in the home or in school.
5. Diligent in establishing a secure financial plan.
Call these clients and use a simple, “low key” approach such as:
“John, I’m reviewing my favorite clients’ files and I noticed I don’t have information about your plan should you or Mary get sick or hurt and can’t work. Who has helped you with this planning?”
“John, if anything were to happen to either you or Mary and you were out of work for an extended period of time, do you believe any of the planning we have done together would help during this time?”
Either of these simple questions will open a line of discussion which may unveil an opportunity. Even if this doesn’t generate additional business (which it will), you will have at least informed your client that the planning he has done does not address the important disability exposure.
Q: What advice do you have for brokers on how to take advantage of the DIAM campaign?
Jachelski: Please reread my answer to question two. The insurance sales profession should not be about one’s selling skills only—it should be a “calling.” Primarily, we all must be in this business to help and guide our clients to achieve financial wellbeing.
Keep it simple. Use feeling and finding questions when asking your clients to explain to you just what would happen to their current existence if they suffered a long term disability. Then just listen—don’t speak. You will be amazed at the responses you receive when your clients actually take the time to think about their particular situation.
Be persistent. Ask all of your prospects and clients about their disability income protection: “Do you have paycheck protection?”
Be diligent. In today’s environment, if you do not properly discuss the consequences of a premature disability, you are not only putting your client at risk, you are putting your practice at risk as well. I would strongly suggest that you have your clients sign a “Waiver of Liability Agreement” if they choose not to accept your guidance on disability protection. If you do not have such an agreement available, email me (greg@fsgbrokerage.com) and I will send you a copy of the one I use.
DIAM is an ideal time to make clients aware that there may be shortfalls in their financial protection. In fact, agents should consider every month DIAM by providing continuous awareness regarding the paramount importance of proper disability protection planning.
Remember: Nothing lasts without a strong foundation, and disability income protection is the cement!
Davidson: One of the major reasons financial professionals fail to successfully move a client to a successful DI placement lies in the mistake of presenting too early. The practice of showing a client a carrier’s proposal before the appropriate questions are asked (and answered) leads to a confused client who will more often than not decline to move forward.
Proposals are the validation of a plan, not a selling tool. They should not be presented until the need is established, the basics of a solution developed (including a premium budget), and an agreement to seriously examine moving forward has been obtained. By keeping in mind that you should not present too early, you will become more successful in delivering disability insurance solutions that your clients will implement.
Gardner: Because income replacement is such an undersold product, any campaign that brings awareness to the consumer and producer is helpful. Having funny duck commercials has certainly raised awareness about the need for DI.
When I hear the stories about people’s lives shattered by injury or sickness and how having an income replacement policy saved them from financial ruin, I feel strongly about spreading awareness. Having DI awareness month is a good way to educate both agents and their clients.
