Eugene Cohen

April 2015

Disability Insurance Awareness Month Planning Panel

Eugene Cohen

Eugene Cohen Insurance

Agency, Inc.

Marvin H. Feldman

Life Happens,

Feldman Financial Group

Sean Hanson

Council for Disability

Awareness

Patrick T. Jackson

The Plus Group,

Income Replacement Agency

M. Susan Ondack

IDIS,

Principal Financial Group

Thomas R. Petersen

Petersen International

Underwriters

William J. (Jeff) Wheatley

Ohio National

Financial Services

Q: What suggestions do you have for brokers to help them take advantage of Disability Insurance Awareness Month?

Eugene Cohen: Disability income insurance is the “best kept secret.” You can make your clients aware of DI by telling them that May is Disability Insurance Awareness Month.

Ask questions:

 • How important is your pay check?

 • Is your income protected?

 • If you were forced to retire tomorrow, how long would your savings last?

It is extremely important for you to study the policies, be familiar with the companies and brochures, and to review the illustrations.

Knowledge is power. It is important for the brokers who are not familiar with DI to work with an agency that is strong in this area and has the knowledge, time, patience and personnel to help you. Knowledge will build confidence, and confidence will result in sales.

Marvin Feldman: Life Happens created DIAM because far too many Americans don’t understand that their ability to earn an income is an asset that needs to be insured. Take this statistic: 51 percent of working Americans are concerned about supporting themselves if they were injured or ill and couldn’t work, but only 29 percent own disability insurance, according to the 2014 Insurance Barometer Study (www.lifehappens.org/industry-resources/agent/barometer/) by Life Happens and LIMRA. The only thing that’s going to change these numbers is if agents start talking about it with all their working clients and prospects.

 So the simplest piece of advice I have is: Ensure that the agents you work with take advantage of May’s campaign-when a national spotlight will be on DI-to at least begin the DI conversation with all their clients and prospects.

Sean Hanson: We know from countless industry studies, including our own, that the typical working consumer is more focused on the messy reality of life-job security, health, kids, aging parents, and even just the daily grind. But, while that may not seem ideal, all of those issues are intertwined with the need to insure their income. As their advisor, it is your job to inform them about risks and issues they haven’t considered and to show them how those issues relate to what’s most important to them.

It’s always easier to focus on an issue when you have a deadline, and Disability Insurance Awareness Month provides an opportunity. Challenge clients and prospects to schedule a protection checkup by the end of May. This works equally well for clients who do have disability insurance and those who don’t. Maybe they need more coverage, or maybe they just need to be reminded of the value of DI so they’re not tempted to forgo their coverage to pay for something more immediate.

Just this week I received an email from my mortgage broker. She used tax return season as an opening to start a conversation. I’d been procrastinating a possible refinance for weeks, but her email finally kicked me into gear. All I had to do was take a minute to reply, and now the ball is in play. The lesson? Be a trusted advisor and get in touch at the right time with the right questions. Mortgage brokers are trying to find the best deal for you and get you what you need, so there is a strong level of trust there with wholesale lenders for mortgage brokers coming into play for the best financing options that will catch the right attention, this is important.

Patrick Jackson: The Plus Group is sponsoring the first-ever National DI Day on May 5th at locations across the country. Experienced professionals from our industry will present on a wide array of subjects related to the sale of disability income coverage. MetLife will show us innovative ways to communicate with our prospective buyers with a “Words that Work” presentation. Other insurance experts will provide insights into the claims process, help us with handling objections, show us ways to begin the conversation about income protection and help producers recognize opportunities-among other topics. Individuals who have experienced disabling events will describe how their lives were affected when disability struck. CE training will be available in most locations. At the end of the day, we want insurance brokers to be motivated to discuss income protection with all of their clients.

Susan Ondack: Marketing perspective: Use resources from industry organizations like the Council for Disability Awareness and Life Happens to build a campaign so that you’re communicating throughout the month. (Carriers also provide resources.) Your goal: Keep the topic of income protection in front of clients. Take advantage of print and digital media. Send postcards, send emails, post videos to your social media channels. And as a reminder, the income protection conversation isn’t just something for May. It should be happening year-round.

Tom Petersen: Disability Insurance Awareness Month has developed a number of years ago and each year increases in its scope. In May there is an increase in ads, public service announcements, social media communications, and other forms of communication, all designed to message the importance of disability insurance directly at the consumer level.

With this in mind, it is the producer’s opportunity to speak about disability insurance to clients while they are getting similar messages from third-party sources.

So what can a producer do?

Many things. First, recognize that there is no magic bullet! Period! It takes communication and time.

 a. Go to the www.LifeHappens.org website and look at all of the producer resources available. Download or order some of these items as needed.

 b. Mention the need for disability insurance to your clients.

 c. Send them a copy of an ad or video on the need for disability insurance.

 d. Make appointments to see, or at the very least speak with, as many clients as possible about this most valuable protection.

Jeff Wheatley: This is the biggest month of the year for disability insurance carriers, so there is plenty of material and education available to both brokers and consumers to help spread the importance of income protection.

I would encourage brokers to discuss income protection with every client or prospect they meet this month. The majority of people who don’t own DI say it’s because no one ever asked them about it. And of those who are asked, nearly half of them buy. (“Disability Insurance: Why Not?” 2011 Buyer-Non-Buyer Study, LIMRA.)

Take 20 seconds of courage during your next life sale or life insurance policy delivery to ask the person, “How would you continue paying bills and maintain your lifestyle if you suddenly became too sick or hurt to work?” Ohio National is a proud supporter and member company of the Council for Disability Awareness (CDA), a third-party organization that focuses on increasing awareness among American workers about their chances of losing their ability to earn an income due to illness or injury.

Q: What tools, processes and techniques do you recommend for brokers to help engage clients and prospects in the income insurance discussion?

Feldman: Life Happens has created a complete suite of DI marketing resources that agents can use in their outreach, which are available on our industry-only site at www.lifehappens.org/industry. You can see the complete list in the accompanying box “Making the DI Conversation Easier.”

But I’d like to highlight the power of the Real Life Stories videos that we offer and why agents should use them. These stories show how real families were able to survive and thrive financially because an agent helped them put DI in place-before it was needed. And these videos work. An independent survey showed that those who watched one of these Real Life Stories videos were 94 percent more likely to consider purchasing DI than those who had not seen one. That’s powerful. These videos open doors. 

Life Happens also has an updated Disability Insurance Needs Calculator (www.lifehappens.org/DIcalc) that allows people to input their own information without any outside influence. It will tell them what, if anything, they need to do. It allows them to make the decision: Do I want to protect my income or don’t I? It’s powerful to have people come up with their own answers.

Hanson: I believe there are three steps to making the case for income insurance: (1) The importance of their income; (2) the risk of losing it, and (3) the right solution. Evidence from the Council for Disability Awareness’ 2014 America’s Income Protection Picture study showed that two-thirds of consumers understand the importance of their income, and one in three consumers say they’d be more likely to purchase DI if they knew more about it. That’s where a trusted advisor can make the difference.

A great salesperson knows how to ask great questions and then to sit back and listen. I don’t think you need to be too clever about this. Ask clients what they currently do with their income. The answers won’t surprise you: their home, transportation, kids, health care, retirement savings, and so on. But this opens the door for you to ask how they would pay for these things if their income stopped.

It’s then important to know what their likely answers might be and to have your responses prepared. The most common answers are that they would live on their spouse’s income, use savings or debt, get help from friends and family, or use government assistance. Smart use of data can help you make the case for the importance of having short and long term disability insurance coverage.

The most commonly heard answers are inadequate as long term solutions. When both spouses work, it’s typically because they need both incomes. The Council for Enterprise Development reports that 44 percent of Americans are living with less than $5,887 in savings for a family of four. Since 56 percent of Americans currently have subprime credit, if emergencies arise, many people are forced to resort to high interest debt from credit cards or payday loans. Most working consumers couldn’t afford to support a friend or family member and still meet their own obligations. And even if they qualified for government assistance, most could not maintain their lifestyle on SSDI alone.

Once you have agreement about the importance of income, the next step is to demonstrate that the risk is too high to ignore. This is more difficult, especially with data alone. While we have an abundance of statistics on this topic-and a good place to start is the CDA’s calculator at whatsmypdq.org-the real key to a connection is to create context, to tell a story, and to relate with an individual about things that matter to him.

That’s why we have insurance-to protect what’s important to us-whether it’s our home, our car, our health, our lifestyle or our livelihood. The very best financial professionals are able to show their passion for their product by telling stories that bring their message to life in a way that data alone cannot. Most of us know someone who’s had chronic back pain, cancer or depression. The CDA consumer survey showed that almost one in three people who have disability insurance cite “knowing someone who was disabled” as a primary reason for owning it.

The final step is the easy part: Narrow down their options and show them the right solution(s). If you can take away some of the uncertainty, it’ll be that much easier for them to make buying decisions.

Jackson: One of the tools we use to assist brokers is a lifestyle protection program. The idea is to relate costs of other insurable risks to that of insuring one’s income. Comparing the cost of insuring your cars, your house and medical insurance with that of insuring your income is enlightening. Most families spend thousands of dollars every year to insure their home and cars, and the cost of health insurance dwarfs both of these costs. Many clients can insure their income for a fraction of the costs of insuring the above risks.

To clearly define the dollar value of the risk of disability, do a simple capitalization of income calculation. A 40-year-old client earning $100,000 per year has a future income stream of at least $2,500,000 to protect. The loss of that income stream without income protection leaves your client in a devastating financial condition.

Real life stories of the impact of a disabling event on people’s lives are particularly compelling. The impact of a severe disability is felt by more than just the person disabled-it is felt by their whole family. If you do not personally know of a real life story, we can bring many to your attention.

Ondack: Offer an income protection review. Whether clients or prospects have any coverage in place or not, it’s a way to start the conversation and help them think about an area of their financial strategy that they may not have previously considered.

Petersen: Again, there is no magic bullet. However, as a successful producer, use the same techniques that work for your life, annuity, LTCI or medical sales.

Explaining the need each and every time is critical! My wife, a yacht broker, once told me that people buy boats when they feel “comfortable.” She always found that answering questions, getting information and constantly chatting about a boat is what sells. Not price. People have a hard time imagining themselves disabled. They then, in turn, think about the cost of the premium and what they perceive as their “chances.”

First, refer to DI as income protection. With the economy having been in shambles for a number of years, people can relate to reduced income. Relate this to the fact that even in the best of times, income loss can still occur.

Second, share stories. Most disabilities are not obvious. The wheelchair is obvious. The MS, degenerative eyesight, heart valve issues, PTSD are not as obvious. Also, don’t forget the beer truck-the unexpected accident. Point out that a disability does not have to be permanent to be financially ruinous. Sharing stories is key! If you don’t have one of your own, share mine! Or someone else’s!

Third, think about how DI is asset protection! For decades we have been taught that DI is all about cash flow. While that is what it is, what it does is maintain a person’s assets. Just like life insurance. A person who is severely sick or injured is, from a financial standpoint, just as dead, but they are still consumers. The bills must be paid, the mortgage of the house must continue, the car loan and insurance premiums paid, etc. These never stop! When we speak of cash flow for a disability, people often think their interest income will suffice. What they forget is that using savings or investment income today is sacrificing retirement income later.

Last and most important, a producer needs to see the value in DI with as much “heart” as he does a life sale! Financial planning begins and ends with income planning, and you cannot truly plan income without protecting it. Also, as alluded to before, for most people the assets they have today were generated by their income. If the income ceases, those assets will have to be liquidated back into cash to pay ongoing bills. If you, the producer, believe that you are helping by selling medical insurance alone, or just life insurance, then you don’t realize that you are only talking about a fraction of the protection your client needs.

Wheatley: Social media has become a very efficient way to disseminate information. Using what’s available and making a commitment to discuss income protection with each and every client. Speaking with conviction and giving your client or prospect the feeling that you truly care goes a long way.

Cohen: Use the month of May to schedule insurance reviews with your clients. This is an opportunity for you to educate your clients on the need for DI protection.

One of the best tools available to you and your clients is the website www.LifeHappens.org. This website is a great source for both the consumer and the broker for information on the need for DI. You will find videos and real life stories. Life Happens has so much great material that emphasizes the need for disability income. It is well worth your visit.

During your review, bring up the value of earned income. Ask the question, “If your income stopped tomorrow, how long can you survive financially?” Point out that future income may be their greatest asset. An individual earning $50,000 a year with no raises over 20 years would have earned $1 million; income of $100,000 would equal $2 million, and $200,000 would equal $4 million in 20 years. This, most likely, will be your client’s greatest asset.

Asking questions creates sales. Ask your client, “What is the longest vacation you have ever taken?” The answer is usually two or three weeks. You then ask your client, “Why only two or three weeks?” The answer is usually that the client has a job and needs to work. You then ask your client, “If you were out of work for two or three years due to a sickness or accident, would you have a problem? Usually the answer is yes. Then your reply is, “Let’s talk about solutions.”

During a disability your client would want stability in his life. The bills continue to come in, but the income has stopped. How many years did it take to accumulate his savings? How long will it take with no income to watch those savings disappear? You can tell your clients that owning disability protection can help solve some of that problem.

Q: What, in your experience, hinders or prevents agents from having the DI discussion with clients, and how do you address these concerns?

Hanson: It’s not an easy discussion to have. People are hopeful by nature. They expect their health to remain the same over time. Overcoming the “it won’t happen to me” objection takes patience and persistence. We also know that most people misunderstand the word “disability.” This misnamed label drives most of us to picture a catastrophic injury or illness. But this is another great opportunity to educate.

The fact is that-for most of us-disability is associated with an injury, surgery or sickness that puts us out of work for a closed period of time. Even the healthiest individuals are at risk to temporarily leave work, and the financial consequences are too large to ignore. This is where personal stories combined with smart use of data can really help.

One in three of our survey respondents said their reason for not having DI is that they can’t afford the premiums. Yet among those respondents there was a wide variety of perceptions about how much income protection costs. You can explain the premiums and explore a range of plan designs to help clients find an affordable solution. Some protection is always better than none, and you can (and should) check back with them down the road to see if they would like to increase their coverage. While clients may not think they can afford to insure their income, they can much less afford to lose it.

The other major obstacle we see is that some brokers and agents lack familiarity or expertise in disability insurance. DI is one of the more difficult insurance products to sell. We commonly hear from agents and brokers that the product is too complicated, it takes too long to complete, to hear back from the insurance carrier once the application is filed, and-when they get a response from the carrier-the coverage is often modified from the requested plan design. Each of those issues creates the possibility that the client will lose interest, which contributes to agents’ unwillingness to learn a new product. But if an agent wants to learn, the resources available are plentiful-from carriers, experienced DI brokers, and industry groups and conferences. The more you know, the more you can prepare prospects for what they’ll experience during the application process.

Financial professionals have to decide which products to offer their clients, and not all of them will decide to sell DI. However, Disability Insurance Awareness Month is a great reminder that being a trusted advisor sometimes means recommending a solution you’re not able to provide yourself. I experienced this recently when, after the birth of our second child, my own life and disability agent convinced me to hire a professional to update my family’s estate plan. Your clients will value your expertise that much more if they see that you are looking out for their interests-even when you don’t stand to gain anything.

Jackson: I think there are two major reasons producers hesitate to discuss income protection with their clients. A lack of confidence in their knowledge of product solutions is the number one issue. These individuals likely offer high level advice in areas such as life insurance planning where they have great expertise. They fear losing the confidence of their clients if they offer advice in areas where they lack expertise. These producers also do not want to tarnish their relationships if the underwriting result is less than their client’s expectations. Avoiding the issue appears to be the path of least resistance for these producers. The other reason I think producers avoid the topic is that they really do not know how to broach the topic with prospects. We provide training to producers to help them begin the conversation. Something as simple as a five minute talk over a cup of coffee is a great way to begin the conversation. Simply let your prospect know you would like to talk to them about something that has been on your mind. Ask your client: “If you were injured or sick and unable to work, would your family expect that we had covered that risk?” The yes or no answer will drive the conversation. Our office provides product training in conjunction with sales training that gives producers the confidence to begin the conversation with clients about protecting their income. We also offer a concierge service to those individuals who want their clients covered but do not wish to be involved.

Ondack: I think fear is the biggest obstacle that hinders agents or financial professionals from having the discussion about insuring clients’ incomes. Think about it: We are all trained to sell life insurance and retirement plans. Some of us even get training on long term care insurance or the alternatives available. Assets under management are a no-brainer for those of us brought up in this industry, but a discussion on disability insurance-now that is something way out of most agents’ comfort zones. All the definitions are baffling. Somehow common sense has escaped us! And it is so expensive! Reality check: It costs between 2 and 4 percent to insure our income. Income is the foundation of every financial plan, so find a company or wholesaler you feel comfortable with and trust them to guide you on plan design and product. Quit looking at the lowest benefit, the monthly payout, and the highest cost-the annual payment. Think of it as a life insurance contract. Multiply the monthly benefit by the number of months to life expectancy and divide the premium by at least 12 months. You will be shocked to see that the “face amount” of the income protection plan costs the same or less than the life insurance you are proposing!

Petersen: Fear. There is a fear that talking about or selling DI may screw up current or future sales. Why? There are a couple of perceptions that some producers have which make them reluctant to sell DI:

 a. The premium for DI looks big and may hinder the large life or medical case.

 b. Disability cases sometimes come back with waivers, rate-ups, declines or other things that the producer feels might make him look bad to the client.

So here is what needs to be done:

The perception of the premium looking too big is often the producer’s perception and not the client’s. Let the client decide! Additionally, it can be the way the proposal is shown. If I show a 45-year-old a $5,000 monthly benefit DI policy and the annual premium is $4,000, the instant perception can be, “You mean for $4,000 I might get $5,000?” Instead, if you show the aggregate of the benefit (like life insurance), you  show the customer the $1,200,000 ($5,000 to age 65) benefit for $4,000/year. It has a whole different feel and suddenly it looks reasonable.

Regarding underwriting issues, the key is managing expectations up front, and it gets easier the more you sell DI!

“Dear client, based upon your occupation, age and the benefit structure we discussed, I believe our best program will be through ABC insurance company. However, there is a lot that goes into underwriting disability insurance, and since they are underwriting with the purpose of being a partner with you for the next 20 years, they may look at things much differently than a life insurance policy. Depending upon any existing health conditions, it is possible that they could issue a policy with an exclusion, or even possibly decline it. While we don’t anticipate this, I wanted you to be aware of this going forward. We have determined together that this type of coverage is very important. We will do our best to make the process as smooth as possible. Should an adverse decision be made, we will discuss options at that time, which may include talking to the carrier or perhaps seeking options with another carrier. In either event, we will do this together!”

Wheatley: Human nature is to talk about what you know. With the decrease in the number of insurance companies offering income protection, there isn’t as much chatter as there once was. There is a lack of confidence among younger agents because income protection has taken a back seat to other products such as life insurance and retirement plans.

Cohen: Brokers come from many specialties: property and casualty agents, financial advisors, life agents and health agents. There are very few individuals and very few insurance companies that specialize in individual disability income protection.

Unfortunately, many agents do not have a comfort level with disability income protection. Because of the lack of knowledge, many agents do not offer it to their clients. This is why I stated earlier that DI protection is the best kept secret.

The job of a brokerage general agent is to make agents comfortable with the uncomfortable. We make agents comfortable by educating them about the need and products of DI protection. We review the questions that they should ask clients to see if this insurance is important to them. We review the illustrations that they will present to the client, as well as going over the features and benefits of the DI policy. We introduce the company brochures that are helpful to the agent. Our goal is to educate the broker and give him a new comfort level with this very important policy.

The need for disability income protection is great. Once the presenting agent understands the need and the policy, DI protection will no longer be the best kept secret. It will become part of their clients’ financial plans.

Feldman: The first problem is that most brokers and agents don’t do DI at all. They may not sell it because they are focused on life insurance, annuities or investments, which are much easier to sell, and choose not to discuss DI with their clients. It may also be because they’re not comfortable with it or they don’t understand it.

Regardless of why they aren’t currently selling it, brokers need to start these conversations so their clients understand that it is critically important to protect their incomes-and offering brokers DI marketing materials to use is a good first step.

At the very minimum, agents need to discuss DI with their clients to make sure they are aware of the problem that exists if they don’t have a DI benefit through work or if the benefit is limited. Agents should note the conversation in the client’s file along with the client’s decision of whether or not to get coverage. It’s important that agents verify that they did their duty to discuss it with every client who needs it.

It also might be a good idea to find a DI specialist to refer business to if a broker feels he wants to routinely sell. That’s what I did in my own business. I would refer my DI business to a specialist, telling clients, “I have someone associated with me and all she does is DI planning. I think you should sit down with her and see what your needs and options are.” We would split the commission; so for her it was a constant source of referrals, and for me a constant source of income.

Q: What advice can you offer to brokers working in the business market, from worksite sales to DI solutions for owners, key executives and high income earning professionals?

Jackson: Insurance carriers are very aggressively offering guarantee issue in the key executive arena. The number of executives needed to create a GSI plan has continued to drop. The competition among carriers in this market segment is fierce. If you have clients in the small business market you may be surprised how much easier it is today to secure coverage for them.

Insurance company issue and participation limits have been expanding for the last 10 years. Excess coverage special risk carriers are also aggressively involved in both GSI and very high limit coverage. We will help you identify prospective sales opportunities and help you complete the sales process with them. [PJ]

Ondack: There are so many income protection solutions for the business owner in today’s marketplace. If you are not aware of what is available, please work with a disability income wholesaler that you trust. They can guide you through the best solutions available. Most of us know what is available in the marketplace and can help with the best solutions available for your client. It may be special risk products, or it may be traditional business products. There isn’t an income or business risk protection need that there is no solution for. The industry has thought of everything. Be it key person, buy out, overhead expense or the arm of an exceptionally gifted pro football player-there is a solution to every problem! Pick up the phone and ask! [SO]

Petersen: Talk about it! Believe in it! DI is much the same sales story as you use for life insurance, medical insurance, group/employee benefits, etc. You are of much greater service when you think of the whole of your clients’ DI protection needs-including personal, colleagues/key man, buy/sell and overhead expense coverage. Look for opportunities everywhere with your existing clients. [TRP]

Wheatley: Income is the foundation to any financial strategy, whether it’s personal income or business revenue. For most business owners their b

Kenneth A. Bloch,  The Bloch Agency

Eugene Cohen, Eugene Cohen Insurance Agency, Inc.

George G. Davidson, Secura Consultants

Cindy V. Gentry, Life Happens and BBA Life Brokerage Agency

Barry Lundquist, Council for Disability Awareness

Thomas R. Petersen, Petersen International Underwriters

Thomas Petsche, Sr., International DI Society and Brokerage Solutions

Raymond J. Phillips, Jr., The Brokers Source, Ltd.

Q: What advice do you have for brokers on how to take advantage of Disability Insurance Awareness Month?

Eugene Cohen: The best kept insurance  secret is disability income protection. I ask myself, “Why?” It is such an important part of financial planning. Most advertisements for financial planning are geared toward income for retirement years, not taking into consideration that many individuals may be forced to retire before age 65 due to disabilities.

Brokers should take advantage of Disability Insurance Awareness Month (DIAM)by calling their policyholders and telling them that the month of May is DIAM, and follow that up by asking their clients questions such as:

 • “What is the longest vacation you have ever taken?” Most will respond, “Two or three weeks.” You ask why that is the longest and the response will usually be, “I have to work. Who can afford to take a longer vacation?”

 • “If you were to have an illness or accident and you were out of work two or three years, would you have an income problem?” If the answer is yes, you respond, “We have to talk.”

 • “Do you have a plan if, due to an illness or an accident, your income should stop?”

 • “Would you agree that your greatest asset is the ability to earn an income?”

It is my belief that if brokers asked their clients these questions, the clients would see the need for disability income protection.

George Davidson: While many organizations and carriers support the Disability Insurance Awareness Month initiative, it does not matter if financial professionals don’t embrace the concept, utilize the tools, and launch a campaign to reach their clients and prospects.

However, the first order of business should be a review of your own disability planning! As I was recently reminded, you sell what you own. Many financial professionals are woefully underinsured themselves, and you can’t preach the message if you don’t heed your own advice.

Cindy Gentry: The easiest way is to let someone else do the heavy lifting for you. Life Happens (formerly LIFE Foundation), which is the nonprofit organization that coordinates the national DIAM campaign each year, has free turnkey tools for brokers and agents to use during DIAM—and beyond. There is really nothing that you have to do from scratch. You can find the DI tools and resources at www.lifehappens.org/industry. (The sidebar gives you some concrete examples.)

Success with the campaign, however, lies in consistency. Plan ahead, choose the resources that you’d like to use, distribute them and then be sure to communicate about DIAM and DI on a consistent basis. In my business, besides a monthly newsletter, we also send out two weekly emails with sales ideas, marketing resources and product information. This consistent drip of information is invaluable. If you want them to sell it, they have to hear about it and know more about it.

Barry Lundquist: A broker’s responsibility is to help people protect what is most important to them. We know from research conducted by the Council for Disability Awareness that consumers, brokers and employers all agree that the ability to earn an income is a wage earner’s most valuable financial resource; income is what pays the bills, pays for housing, food, clothing, transportation and other living essentials, as well as giving breadwinners an opportunity to save for retirement, a new home, a child’s education, or just for a rainy day. Disability Insurance Awareness Month  gives a broker a reason to contact prospects and clients and start a conversation about the importance of income to their financial security, about the risk of income loss related to illness or injury, and about solutions that can help them protect that most valuable resource. It’s also a great time to remind those clients who have already purchased disability insurance how important it is and to suggest a checkup to make sure that the income protection they have remains appropriate. For those brokers who do not talk to clients about protecting their income, DIAM is a great reminder to them of what being a trusted advisor is all about. After all, their responsibility is to help people protect what is most valuable to them, and for most working Americans, nothing is more valuable than their income.

Tom Petersen: Disability Insurance Awareness Month is just as the name implies—awareness. Disability insurance does not sell itself like many other forms of insurance. It has to be sold. It is also difficult for the average person to picture himself disabled much beyond a cold or flu. DIAM does an enormous job of marketing and spreading awareness at both the consumer and industry professional levels. Groups such as CDA, Life Happens, and IDIS have great tools to help make marketing DI easier. But don’t start in May! Start in April! May is when the blitz to the public happens, and it is best to have all the resources going at once!

A side note: When May ends, the need for disability insurance doesn’t! Hopefully, insurance professionals recognize that DI can be sold, should be sold, and should be part of our everyday sales activities.

Thomas Petsche: We need to start ASAP getting emails, mailers and brochures sent out to brokers and clients just to get DI on their radar.

Ray Phillips: Invest in the tools available from Life Happens. Invest the time to know what is on their website. Invest the money in those marketing pieces that might help spread the word about disability income insurance.

Use the benchmark reminder of Disability Insurance Awareness Month as a reason to start a conversation with clients about DI.

For clients who have purchased DI, use this as a time for brief review of the client’s situation to confirm that benefit amounts are accurate; review the definitions and features of the plan so the client knows what he has and can expect if a claim arises. Provide a brief overview of the actual claims process—how to file, what happens, etc.—in case a claim does arise.

Q: What tools, process or technique do you recommend that brokers make use of to engage clients in a DI discussion?

Cohen: I recommend asking clients questions to engage them in the mindset of disability income protection. Ask them how important their earned income is to them. Ask them how they would fund their retirement plan if they were to become disabled. Ask a small business owner how he would pay his business expenses if he had a disability.

Selling disability income protection is easy when the need is established.

Davidson: The important news is that you don’t have to “reinvent the wheel.” There are ample materials provided by Life Happens and the Council for Disability Awareness. Take a few minutes to find the tools that fit your practice style and put them to use.

Gentry: Increasingly, one of the most effective means of connecting with people on a very personal level—especially with Gen Xers and Millennials—is through social media. None of us really seems to have the time necessary to devote to these new channels of communication, but the truth is that we ignore them at our business peril. Again, free resources from Life Happens can make it much easier. They have pre-written “compliance neutral” content about DI, including images and “info-statistics” that you can literally copy and paste to share. You can also follow them on the Life Happens social media channels, such as Facebook and Twitter, and simply share the new content that they post several times a day.

Lundquist: From knowing and observing hundreds of brokers over the years, I have tried to discern what differentiates those who are highly successful from the others. I have observed four traits common to the best of the best:

 • They are dedicated, lifelong learners. They never stop learning; never stop striving to be more educated and professional.

 • They are passionate. For them, selling is not about commissions, it’s about doing the very best job to protect their clients and best meet their most important needs.

 • They tell stories. They share stories from their personal and professional lives; stories from which, for many, their passion derives; stories about how important it is for people to protect themselves from the most catastrophic risks.

 • They ask great questions and then they shut up and listen. Clients don’t want to be sold, they want to be listened to, they want to be educated, and then they want to make their own decisions based on advice from someone they trust.

So I think the answers to this question are apparent from these four traits. There are no silver bullets. Clearly, being the best requires hard work. But those who dedicate themselves to learning, who are passionate, who have stories to share, and who have great questions to ask will be successful.

Some good questions to start a conversation about income protection include:

 1) If you were sick or injured and couldn’t work, how would you pay your bills?

Know what all the responses might be and have answers prepared. For example, if the person says, “We’d live on my spouse’s income,” what would your response be? What follow-up question would you ask? If the person said, “I have disability insurance,” that’s an opportunity to ask about their protection and to help them determine whether it is enough.

 2) What is your most valuable financial resource? What is it worth?

When they respond, they may talk about their home, their retirement nest egg, etc. Use the Earnable Income Quotient calculator, which is a great tool made available by the Council for Disability Awareness, to help them estimate the value of their income. It is typically a very large number, much larger than the value of their home or 401(k) balance.

 3) What are your odds of experiencing an illness or injury during your working career that will prevent you from earning a paycheck for three months or longer?

We know that most people dramatically underestimate their odds of becoming disabled. Use the CDA’s Personal Disability Quotient calculator to demonstrate that their risk is higher than they think. The good news? Solutions are available.

The key is to ask the question and then let the client talk

Petersen: There is no one way to engage someone. Some people are visual. Some are analytical and need statistical information. Some people empathize with stories, and others feel a need to protect their family or business. And finally, there is a group that buys because they are told they need it (usually by an attorney, friend, parent, business partner, etc.). As a professional salesperson (it doesn’t matter if you sell insurance, refrigerators or widgets), you need to be able to engage people on their level. Do you have a story to share? Do you have statistics? Do you have pictures? If not, get them! Life Happens, CDA and IDIS all have great tools to help.

One other source that is not to be overlooked is your local disability insurance brokerage outlet. These are the experts in many areas, all on DI. They have tools, they have knowledge, they can help with marketing, and they can help with sales calls in some cases. Most DI brokerage outlets represent several carriers so that they can provide you an assortment of products to solve insurance needs.

Petsche: I have my three questions:

 1. If your car were stolen or destroyed tomorrow, how quickly could you find another car to drive?

 2. If your house burned down, how soon could you find a place to live?

 3. If you became sick or hurt and your doctor told you that you could not work for the next six months, two years, or the rest of your life, do you have an income guaranteed to cover your regular monthly bills, no matter how long you cannot work? Your income potential in your working lifetime is several million dollars—that is, if you don’t become disabled.

Phillips: ASK! Ask clients if they have DI.

If they do have DI, ask if they know what they have (chances are they won’t). If they have group coverage at work, ask to review the policy to point out any shortfalls and perhaps provide input on insuring any benefit shortfall relative to their income. Ask if an individual policy they have will cover their current situation. Ask if you can do a DI policy audit to ensure proper coverage.

If clients do not have coverage, ask how it would impact their lifestyle if they were sick or injured and couldn’t work. Ask if you can provide an affordable solution to the exposure they have.

Q: Many DI specialists share the view that every month should be treated as if it were DIAM. What can be done to convince specialists in other insurance fields to impress upon their clients the need to protect their income?

Cohen: Specialists in disability income protection find selling the product quite easy. This is because they know and understand the policies. Specialists in other insurance fields need to be educated so they, too, become knowledgeable and comfortable addressing the concept of disability income protection with their clients. At our agency we spend as much time as needed going over the disability policy illustration with our brokers, preparing them for the appointment; we are not satisfied until we have done our job of making the broker secure in his knowledge and comfortable with the previously uncomfortable. Knowledge is power.

Davidson: Unfortunately many financial advisors wake up to the importance of this issue only after one of their clients suffers a disabling illness or injury. In our practice we spend every day attempting to save these individuals from becoming an example which motivates their financial advisor to do the right thing.

Gentry: The great part about DIAM and using the Life Happens resources is that May becomes the launching pad for DI outreach—a great beginning. You can give your own campaign a big burst of energy while the national campaign is underway, and you can leverage the national attention that’s being put on DI. Then it goes back to consistency. Continue to use those DI resources throughout the year. Most of Life Happens resources—realLIFEstories flyers and videos, and social media posts—can be used any time of the year. Set up a calendar of when and how you are going to communicate about DI, and then stick to it.

Lundquist: As I noted earlier, a financial advisor’s responsibility is to help people protect what is most important. For nearly all wage earners, income is most important. If the broker is not familiar with disability insurance, that is not a valid excuse for not addressing income protection. There is plenty of help available to get educated, and plenty of opportunities to partner with experts to create the best solutions for a client. Some years back, LIMRA surveyed brokers who did not sell disability insurance and asked them why. The most common response was “the client didn’t ask for it.” That is simply not acceptable. The advisor’s job is to help the client understand his risks and to protect against them. Some people will talk about the broker’s liability because they didn’t talk about disability insurance to a client who subsequently became disabled. As a trusted professional, I cannot imagine having a conversation with a client who has suffered a disabling illness or injury, or perhaps having that conversation with one of that person’s loved ones, and having to explain to that person why there is no protection in place for that person’s lost income. For many, their lives will be completely ruined.

Petersen: While we in the disability insurance industry believe every insurance professional should always include DI, the reality is that they can’t (or won’t), for many reasons. This is one reason the need to network with others in our industry can be a useful tool. The specialists in other fields don’t need to know about disability insurance as much as they need to know (and use) the resources that can analyze, design and implement a DI plan. That may be a producer to split cases, or a brokerage outlet, or a carrier rep. If they want to do it alone, they should also know the online tools and resources we have already mentioned. A specialist in another field should understand that if their client becomes permanently disabled, he may lose them as a client! A CPA will not have a business client. However, a business owner disabled and with business overhead expense DI coverage will need a CPA! An investment advisor will find that a disabled person becomes a survivalist, and discretionary income for investing is much tougher to part with during a disability. A life insurance specialist should ask himself, “What if my client doesn’t die from a severe accident or heart attack?”

Petsche: Every plan/program that you can set up in the financial services area is dependent on your income to keep them going, and once that money machine—you—breaks down, all your plans just become liabilities. Should we protect the goose? Or the golden eggs the goose lays? Too many advisors and their clients want to insure the golden eggs.

Phillips: If a person becomes disabled, the other specialists need to recognize that there is a good chance it will affect the client’s ability to pay the premiums on the products or investments they have sold. The fact is, before IRAs, before life insurance, before 401(k)s, before long term care insurance, there should be disability income insurance. Not only does it protect a paycheck, not only does it protect the lifestyle a client has grown accustomed to, it also protects the very plans that have been implemented to secure the individual’s and family’s financial future.

Q: In your experience, what are the main difficulties/objections you encounter in trying to market DI either to agents or to consumers, and how do you overcome them?

Ken Bloch: The biggest consumer objection is “sticker shock.” If the producer explains disability insurance in understandable terms with the policy premium at 2 percent or less of gross income as a starting point, the consumer can then design a policy that will provide value and peace of mind. [KB]

Cohen: This is a typical conversation when talking to a new broker: “Do you offer disability income protection to your clients?” Most answer no. “Why?” we ask. The most common answers we get are: “I don’t want to be bothered.” “I am busy with my casualty business, health insurance, etc.” “It’s too complicated.”

The real objection is that the broker is uncomfortable with his lack of product knowledge. We help brokers overcome the real objection of why they do not offer disability income protection to their clients by letting them know that our agency marketers are here to help them understand the product and how to offer it.

In overcoming objections from the consumer there are only four basic objections. Everything else is not a real objection. The four basic objections are: 1) no need, 2) no hurry, 3) no confidence, and 4) no money.

I gave examples earlier of questions to ask to establish the need for disability income protection. Once the client understands that he needs the policy, you have overcome objection number 1. 

Objection number 2 is “no hurry.” When your client knows he needs disability income protection, he will act. You have overcome the “no hurry” objection.

Objection number 3 is “no confidence.” If you have the knowledge, your client will have confidence in you. It is your job to obtain the knowledge by reading the material that companies have developed for producers and by working with a knowledgeable brokerage agency that can give you all the time and support you need.

Objection number 4 is “no money.” This is the final objection and this is when you ask the client, “If the company were to deduct x amount of dollars from your checking account every month, would this create a financial problem?” If the client says no, you are done! If the client says yes, then you state, “I am not here to create a financial problem, I am here to solve one.” (This approach only works because of its sincerity.) Then we work together to reduce the benefit and premium to something the client can manage.

Every day in our office is disability income protection awareness day. Every day we are teaching, training and talking disability income protection to our brokers and to each other. It is great to be a part of an industry that does so much good for people. [EC]

Davidson: A well-versed and motivated financial advisor encounters very few legitimate objections. We have worked closely with advisors whose placement ratio is almost 100 percent. This comes from understanding the needs of the client and the solutions that are available. Everyone wants what disability insurance does—our job is to help the client position it into their plan and budget. [GD]

Gentry: I see it less as an objection and more of an issue of something we don’t talk enough about. Health agents aren’t selling DI, P&C agents certainly aren’t selling it, and most life agents don’t sell it either. But the truth is, none of those other types of insurance meet the need that DI does. There is a huge gap between consumers who need DI and those who have adequate coverage.

I think the key is focusing the conversation on “protecting your paycheck.” People aren’t necessarily open to talking about disability insurance—they may not even know what it is. However, they will be open to knowing what can help them if an injury or illness keeps them out of work for an extended period of time. Life Happens did a survey that found that 50 percent of people would have financial troubles either immediately or within one month of not receiving a paycheck. That’s a crisis. We have the tools so that agents can help their clients solve this problem. Now we need to start using them. [CG]

Lundquist: Some common objections from brokers: It’s too complicated, it takes too long, and policies are too often modified from what was applied for. The first thing I’d say is: Just because something is hard doesn’t mean for a second that it is any less important. The more brokers learn about disability insurance, the more policies they sell and the easier it becomes. They can make sure the prospect knows what to expect if they themselves know what to expect.

Many very successful disability brokers that I know have made the observation: If I knew then what I know now I would have started selling disability insurance much sooner. Many companies today are offering multi-life programs on a guaranteed issue, simplified administration basis. Those multi-life programs can certainly make the process easier.

Another tip is to focus on younger wage earners. When someone is early in his career, his risk of disability over the many years he will work until his retirement is much higher than an older worker who has fewer years of work remaining. That younger worker’s earnings potential is significantly higher than the older worker for whom many of his earning years are behind him.

So the youngest prospect has the most to lose and the highest odds of losing it. Younger workers often have few financial resources to fall back on. And for younger workers, it is typically much easier and less expensive to purchase income protection.

Other benefits to brokers besides doing what is right for clients: There is less competition in the disability insurance marketplace and commissions are lucrative, especially renewals.

Some common objections from prospects: “It costs too much.” This may simply be a reflection of not appreciating their level of risk. Discuss the consequences of disability; ask how they would pay the bills. Ask if they know others who have had cancer, or a stroke, or experienced a bad accident. Use the Personal Disability Quotient calculator. Many wage earners assume that disability insurance is much more expensive than it is. Finally, don’t forget that having something is better than having nothing. Help them get something in place that can be built on in later years.

“I’m healthy.” It is certainly the case that a person can lower his risk of disability substantially by living a healthy lifestyle, keeping weight in line, eating right, exercising and so on. In fact, a person can cut his risk of disability in half. But even the youngest, healthiest person has a risk of disability that is too high to ignore.

“We can get by on our savings and (other sources).” Help them do some math. How much do they need each month to pay the bills? What sources of income would they tap into, how much would be available, and how long would the sources last? Finally, quantify the gap between needs and income sources. Help them learn how to best fill that gap.

Also keep in mind that the average long term disability, once the claimant satisfies his elimination period, exceeds 2.5 years. He needs to be prepared to withstand a disability that can last for several years, or one that may even end his working career.

Helping overcome objections is where stories and passion come most into play. Telling stories about others who have experienced disability and especially getting clients to talk about people they know who have experienced illnesses or injuries can certainly help. Many people don’t think they know anyone who was “disabled,” but when asked if they know someone who has had cancer, a stroke, or even chronic back pain, most everyone will say yes. Our Council for Disability Awareness research demonstrates that when an individual knows someone who has experienced a disability, they think their own risk of disability is higher.

Perseverance counts. Keep asking, keep reminding. As any successful salesperson can attest, the sale is very often made after many attempts. [BL]

Petersen: The DI industry has done a great job of educating insurance professionals that disability insurance is cash flow. More life insurance is sold for asset protection than for a “need for cash.” When insurance professionals who speak about assets as things that are important to insure realize that disability insurance is asset protection, then they begin to include it in their day-to-day sales. The same perception applies to the end buyers, too. People don’t visualize losing income as easily as losing a house, keeping kids in school, wrecking a car, etc. A long term disability will result in the same liquidation of those assets if they are not protected by disability insurance. We must do a paradigm shift in thinking about what disability insurance truly is. It is asset protection! [TP]

Petsche: The biggest obstacle we have to overcome with both brokers and consumers is the perception that “disability will not happen to me.” The best way to overcome this objection is by telling emotional and motivating stories about our experiences dealing with what happens to individuals with and without disability insurance. Also, show the law of averages that relates to disability, because the odds are not in their favor. [TP]

Phillips: The biggest hurdles, in my experience, have been cost, recognition of exposure, and perception of the underwriting process.

Cost is the major objection to many insurance sales. I’ve found that if the advisor gets the client to focus on the amount of annual and total payouts the DI plan could provide in the event of a claim, it helps. For instance, for a 40-year-old business owner who is considering a $5,000 monthly benefit, stress that this is $60,000 per year; and that the total potential payout to age 65 is $1.5 million. In that context, the premium relative to the benefits provided is perceived as much less than if presented monthly.

Statistics abound that provide the realities of the exposure an income earner has to a disability. The Council on Disability Awareness has information available to help point out this exposure, as does the Life Happens site, www.lifehappens.org.

The facts are that the DI underwriting process can be involved and tedious. Accurately pre-screening the client as well as detailing the process and the reasons behind the scrutiny involved must be explained to the client. The amount of potential benefits requires a process that allows carriers to mitigate their own exposures.

But within that framework a number of carriers have come out with a simplified underwriting process that can be less invasive for clients up to a certain age and benefit amount. Exploring that process for the client’s particular situation can be an effective way to cut the time and consideration involved. [RP]

Q: What led you to specialize in the DI market?

Jack Schmitz: Other than being born into the business and wanting to continue by dad’s vision, the focus on helping business owners protect their financial lives seemed like a noble cause. Since then I have seen and heard how disability income insurance payments have saved many lives, hopes, and dreams, after all, a lot of people in this situation find that it is necessary to invest in disability insurance to protect your primary income. Otherwise, you could find yourself in difficult circumstances. What a great product to own, make people aware of, and sell. [JBS]

Eugene Cohen: After graduating from Ohio State University with a major in finance and searching for a career, I interviewed with a company that specialized in disability income protection. The appeal to me was that this concept made sense. Everyone who works depends on an income and the need to protect their income was obvious-for most people-because their greatest asset is their future income. This was a concept that I believed in, and I knew that I would be able to relate to potential clients with sincerity and pride. I also knew that I would not be dependent on friends and family for sales. [EC]

Ellen Crowe: I enjoy the challenge of promoting disability income, so more producers will feel comfortable introducing and selling the product to their clients. Early in my career, it became quite clear to me that all financial planning rested on the client’s ability to earn an income. A long term sickness or accident could easily destroy a family’s financial welfare.

Even though statistics show that people in their working years are more likely to become too sick or injured to work than to die, disability income is not an easy sale. Many producers shy away from selling the product because the premiums can be high, clients do not understand the need, and the underwriting is more meticulous than life insurance.

By training, I am a communicator and a teacher. Through phone conferences, continuing education seminars and webinars, I am able to use my communication and teaching skills to help producers understand the product, sell the need for disability income protection to their clients, assist them with sales ideas and help them design disability plans that are the best fit for the client. I receive a lot of satisfaction from seeing brokers grow more comfortable with the product and, as a result, sell more disability income to their clients. Disability support through insurance is crucial in making these individuals independent in their life. They can use the money for daily assistance or home nursing requirements and many organizations under government schemes like NDIS (disability support Melbourne) aid with these services for the differently-abled.

Michael Sileo, Jr.: I followed my father Michael Sileo, Sr., into the disability insurance brokerage business. His passionate belief that disability insurance was for all occupations is what our company is built on. He was a champion for the working man and challenged carriers he represented to develop DI products for the blue and gray collar markets. He was a true trailblazer in the disability insurance brokerage industry.

General Agent Center, Inc., has specialized in disability insurance brokerage exclusively since 1996. We are a family-owned and operated business built on the relationships we have with our family of insurance producers and financial advisors, most of whom have known me since I was a teenager because they have been doing business with my company for decades.

I love disability insurance! It is our niche in the insurance marketplace. Most independent insurance producers and financial advisors offer their clients numerous products, but DI can be a difficult sale, especially if a producer/advisor isn’t completely knowledgeable or confident in his ability to present and sell the product. That’s where we come in. Our sales support, industry knowledge, product expertise and the relationships we have built with our carriers help producers/advisors increase their disability insurance sales.

The DI market is constantly evolving, and the products are complex. We are now able to offer DI coverage to almost all occupational classes. There is more competition among the carriers in the blue/gray collar marketplace, and consumers are becoming increasingly aware of the need to protect their paychecks. It’s a great time to be in the disability insurance brokerage business. [MAS]

Q: What are the most challenging issues for disability insurance specialists today?

Cohen: In the past, companies taught disability income protection to their agents. Because there are fewer companies offering disability income insurance today, fewer companies are teaching it, leaving a smaller pool of agents with disability insurance knowledge. The major challenge we have ahead of us is that we have to teach brokers about this vital product. It is not only enough to have brokers aware of the great need that their clients have for disability protection –they must be able to present that need to their clients.

The problem, I believe, is that many brokers are uncomfortable with disability insurance because of their lack of knowledge. Therefore, our challenge is to make them comfortable with the uncomfortable. The priority must be to educate brokers and encourage them to ask their clients about disability income protection. Just as important, brokers must be educated on how to ask the right questions.

Our firm, the Eugene Cohen Insurance Agency, Inc., is a brokerage agency and our clients are brokers and financial planners. They are independent agents as well as advisors referred by broker/dealers, general agencies and brokerage agencies that do not specialize in disability insurance.

Once a broker/advisor asks us for a proposal, we spend as much time as needed going over the illustration and preparing him for the appointment. We are not satisfied until we have done our job-making the broker comfortable with the previously uncomfortable. [EC]

Crowe: Motivating producers to share a disability income illustration with each client for whom they write a life application is the most challenging issue for this disability income specialist.

Studies show that people are concerned about protecting their incomes but that their financial advisors do not discuss disability income protection with them. In fact, only 18 percent of consumers recall being approached for disability income protection-less than half as many as those being approached for life insurance (Facts from LIMRA, May 2010, Multimedia Fact Sheet). However, 3 out of 10 workers between the ages of 25 and 65 will be too sick or injured to work for 90 days or longer (Social Security Administration, Fact Sheet, 2007).

Financial plans are seriously deficient if they do not include disability income insurance, because everything rests on a client’s ability to earn an income. If producers were in the habit of always presenting life and disability insurance illustrations to their clients, a lot more people would have adequate disability income protection. [EMC]

Sileo: Finding and retaining insurance producers and financial advisors focused on DI is at the top of my list, especially when you take into consideration that the average age of an insurance producer in the United States is 62. The aging producer population also means that the best and most knowledgeable insurance producers and financial advisors are going to be retiring soon, taking with them the expertise they have learned from years of experience. Most of these veterans received extensive training from the insurance carriers.

It’s my job as a disability insurance broker to recruit, educate and build long-lasting relationships with insurance producers and financial advisors interested in becoming DI specialists.

Overcoming the lack of interest or fear that some insurance producers and financial advisors have about selling disability insurance is also a challenge: It’s too difficult to sell. I’ve tried selling disability insurance in the past. Some of my clients were declined. Some clients were offered a modified policy with exclusions. I have my reputation to protect!

Not everyone who applies for disability insurance will medically or financially qualify. You have to disclose all medical issues and medications prescribed on the application. Nondisclosure of medical information on an application will result in a decline. An application that discloses all medical conditions and current medications will be underwritten and any offer of coverage from an insurance carrier will be modified to exclude that condition or medical issue.

Most insurance carriers will review these exclusions or modifications within one to five years of the client being treatment, symptom and medication free. Clients with a medical history of surgeries, broken bones or long term medical issues will be underwritten with offers of coverage with modifications or exclusions that are permanent. Even with exclusions for a known medical condition the value of a disability insurance policy is priceless paycheck protection. Paycheck protection is known to be the first tier of worker’s compensation coverage, so those who have found themselves needing help might want to look into workers compensation insurance as that might be able to help them get back on their feet.

The truth is that disability insurance is an easy sale if you have confidence in your ability to educate your clients about the importance of paycheck protection. Disability insurance sounds like you are trying to sell a policy that can be used if the policyholder is hit by a bus. Instead, disability insurance is a policy that protects paychecks and the ability to earn a living and provide for a family. Disability insurance specialists must show clients the value of their paycheck and the need to protect it! [MAS]

Schmitz: Our biggest challenge today is underwriting. Financial advisors find that it is easier to make money offering securities, with no underwriting, and health insurance agents in California haven’t had to deal with underwriting as much since “guarantee issue for groups of two” was legislated. Verifying incomes and getting brokers to ask all the difficult lifestyle and health history questions completely is a problem. Plus, the average age of a broker is close to 60, and many can’t or don’t want to work as hard anymore. [JBS]

Q: What is the best way to get beyond a client’s “it won’t happen to me” objection?

Crowe: Many clients are not aware of the financial risk of a long term sickness or illness. When producers mention disability, clients see a wheelchair. Producers must educate clients. Preparing a strong disability income PowerPoint presentation or a binder is critical, and it should contain the following information:

Statistics that illustrate the likelihood of a disability during working years versus dying during working years.

A chart that illustrates the percentage of claims associated with common causes of disabilities for people in their working years (e.g., musculoskeletal and connective tissue issues, cardiovascular problems and cancer). With a chart such as this, it quickly becomes apparent that the majority of disability claims are not from catastrophic injuries that leave a client wheelchair-bound, but from chronic sickness and muscle and joint issues.

A chart that shows a client’s potential loss of income based on his current age and salary.

A list of possible alternatives a client may be considering to supplement his lost income in the event of a long term sickness or illness, along with the inherent pitfalls associated with each alternative. For example, clients might believe they can easily collect social security disability benefits or simply make do on the salary of the working spouse, but both have serious shortcomings.

Disability articles that you can leave with the client that reinforce the need for disability income.

After going through the presentation, if the client still has objections, go back to the place in the presentation that responds to the particular objection. For instance, “it won’t happen to me,” can be approached with reviewing the disability statistics again along with a discussion that might go something like this:

“Insurance protects the insured from a possible risk that may have grave financial penalties. The statistics we just reviewed indicate that becoming too sick or injured to work is at the top of that list. Everything rests on your ability to earn an income. Isn’t that worth protecting?” [EMC]

Sileo: People know and understand that someday they will die; yet few people believe they will ever become disabled. I like to use the Counsel for Disability Awareness for information and tools that I find useful to assist producers and financial advisors in educating their clients about disability insurance and the chances of something happening to them. It’s our responsibility to make sure our clients understand the need for disability insurance.

Here are a few statistics I like to use.

Just more than one in four of today’s 20-year-olds will become disabled before they retire (Social Security Administration, Fact Sheet, March 18, 2011).

More than 36 million Americans are classified as disabled-about 12 percent of the total population. More than 50 percent of those disabled Americans are in their working years, from ages 18 to 64 (U.S. Census Bureau).

More than 5 percent of U.S. workers (8.3 million disabled wage earners) were receiving Social Security Disability Insurance (SSDI) benefits at the conclusion of March 2011 (Social Security Administration, Disabled Worker Beneficiary Statistics, www.ssa.gov).

In December of 2010, there were more than 2.5 million disabled workers in their twenties, thirties and forties receiving SSDI benefits (Social Security Administration, Disabled Worker Beneficiary Statistics, www.ssa.gov).

By knowing and sharing such information with your clients, you can help them better understand that it might happen to them. Encourage your clients to check out the Counsel for Disability Awareness’s website at www.disabilitycanhappen.org. There you will find a great deal of information you can use to help express the need to protect a paycheck and the chances of a disability happening. There is a DI calculator that your clients can use on the website that will show their personalized chances of becoming disabled during their working lifetime.

It’s your responsibility to help clients understand. You have to show your clients they need disability insurance, you can’t make them buy it. By giving your clients the tools to better understand the purpose of paycheck protection, a seed is planted with your clients. It takes days, weeks and sometimes months for it to grow; sometimes it takes something to happen to a close friend or family member for them to remember the disability insurance seed you planted with them. Other times it’s local or national events that make them want to protect their paychecks.

Don’t give up on disability insurance. It’s a long sales process. Just keep in mind that an informed and properly advised client is a disability insurance buyer. [MAS]

Schmitz: It’s not about them. It’s about the ones they love and the consequences for those loved ones if a disability strikes. For most people, a 3 percent risk of devastating their family’s dreams would be too much. The risk of disability is so much greater, and it doesn’t have to cost more than 1 to 3 percent of income to do something. All a healthy prospect needs is L-O-V-E: Love, Obligation, and Verifiable Earnings! [JBS]

Cohen: The “it won’t happen to me” objection is not a real objection. There are only four basic objections in selling: (1) no need, (2) no hurry, (3) no money, or (4) no confidence. All other objections are not the real reasons why the client is not buying.

The “no need” objection is overcome by asking questions. For example, consider the following conversation:

Broker: What is the longest vacation you have ever taken?

Client: (most will likely answer) Two or three weeks.

Broker: Why only two or three weeks?

Client: I have to work…Who can afford to take a longer vacation?

Broker: If you were to have an accident or illness that disabled you for two or three years, would you have an income problem?

Client: (most will likely answer) Yes.

Now you have established the need for income disability insurance. Asking questions enables the client to see the need. One of my favorite client questions to teach a broker is: If you had a money machine-one that produced X amount of dollars every month-would you insure that machine against a breakdown? Of course you would-you are the money machine!

After the client has been educated on the policy-especially what it can do for him-only then should you address the “no money” objection. Ask the client if the company were to deduct X amount of dollars from his checking account each month for this policy, would that create a financial problem. The answer is either yes or no. If it is no, you are done-you have established that the client has the means for a policy, thereby countering the “no money” objection. If the answer is yes, you still have more work to do.

Over the years, I developed an approach that I found to be successful. When I sold directly to consumers, I would tell my clients that I didn’t come to create a financial problem-I came to solve one. This approach only worked because of its sincerity. I simply put the current proposal aside, rolled up my sleeves and sat down with my client to design a policy which was more affordable.

In regard to the other two objections-“no hurry” and “no confidence”-I have found that these are easily overcome if I have done my job well to educate a client. [EC]

Q: What advice do you have for a producer who is just entering the disability insurance market?

Sileo: Learn all you can about disability insurance. Get a sample disability insurance policy and a product guide from the insurance companies you are going to be representing. Know and understand the definitions of disability and key features for each of the policies.

Build a strong relationship with an established and experienced disability insurance brokerage. One that will support you with marketing and sales materials, product illustrations and advice to help you serve your clients’ disability insurance needs.

Don’t be afraid to ask questions. It’s the only way you’re going to learn. Your disability insurance broker is there to help you become a disability insurance specialist.

The more you know about disability insurance, the more confidence you will have in selling it. You must be enthusiastic! Your clients need to know that you believe in paycheck protection! [MAS]

Schmitz: This is important work. The product offered must be the best for the client. The decision you help them make will be remembered and reviewed for many years. A client will probably keep his policy for his entire working life! Also, work with a disability expert to get it done right. [JBS]

Cohen: The following is my four-point advice to agents starting in the disability income protection business:

1.Knowledge is power. You should know your product. Read and understand the company’s disability policy and all the accompanying brochures.

2.Believe in the need for disability income protection. If you qualify for disability income protection, you should own it.

3.Disability income protection is the best kept secret. You must discuss it with prospects. You will be surprised at the interest your clients will have when they realize that their future income is their greatest asset. Also, disability income protection is a great way to gain new clients.

4.Understand the real objections. As I mentioned earlier-no need, no hurry, no money and no confidence-are the real reasons people don’t buy disability insurance. [EC]

Crowe: Purchase disability protection for yourself. You cannot sell the need for disability income protection to your clients if you have not purchased it for yourself.

Work with a disability income specialist. It will increase your success ratio and your confidence. A specialist can help you understand the disability income contracts, assist you with case design and answer any questions so you are well-prepared when you meet with the client.

Create a strong disability income PowerPoint presentation or a binder. Go through the presentation every time you meet with a new client. Eventually, you will become at ease with the presentation and responding to clients’ questions and objections.

When you develop a financial plan for a new client, present a disability income quote every time you present a life insurance quote.

Consider specializing in occupations that are good disability income prospects. For example, carriers provide discounts and special monthly benefits to resident physician programs. Working with a professional organization devoted to a specific occupation such as veterinarians or attorneys will open the door to multiple clients. Develop association discounts for these professional groups so the discount is exclusive to you only.

By working with clients in the same occupation, you develop a strong reputation within the profession because you understand and know their compensation packages and can easily fit them with the best disability carriers for their situation. In addition, if you have an exclusive association discount in place, you can provide discounts and benefit amounts other producers cannot match.

Don’t become discouraged. It may take several visits over a period of time. A disability income specialist can coach you on how to approach clients and assist you in answering clients’ objections and questions. [EMC]

Q: What advice would you give to a producer who has been in the disability insurance market for a while?

Schmitz: Take another look at DI products. Be willing to be flexible in product choice in order to persuade a client to buy instead of walking away. Maybe a good residual/partial feature is more important than pure own occ for most occupations. Maybe guaranteed renewable is okay for those who will invest the difference in a LTC insurance policy. Try selling a group plan for lower rates and easier underwriting. Take another look at processes: teleapp, e-delivery, scrip check, fillable apps and guarantee standard issue are here to make it easier for brokers. [JBS]

Cohen: My advice to producers who have been in the business for awhile is to visit your clients on a regular basis. This will enable you to review their coverage with them, be knowledgeable about any life changes which would necessitate any new coverage, and help you to obtain referrals.

But I am also curious about long-time producers who do not offer disability income protection to their clients. I wonder why-are they too busy? Do they lack knowledge? Is it the underwriting? In most cases, I believe, it is the lack of knowledge which makes brokers uncomfortable.

But this doesn’t have to be the case. Opportunities to become educated come from a variety of different sources. The companies that offer disability income protection have created a tremendous amount of material to help brokers understand the concept. I myself hold regular DI training sessions for brokers who are affiliated with our agency. I feel it is our job to help them become more comfortable putting disability income protection into their portfolios. [EC]

Crowe: The best opportunity for producers to grow their disability income business is with their existing disability insurance clients. Introduce business owner clients to disability products that will protect their business operations, such as business overhead expense (BOE), buy/sell, business loan protection and key person disability protection.

There are also retirement protection products that will pay a contribution of up to $4,250 into a trust in the event that a disabling injury or sickness prevents the policyowner from working. Such products can be written in addition to any individual disability income policy the client may own. It insures that your clients will be able to continue to save for their retirement in the event they become too sick or injured to work.

In addition, talk with your employer groups about providing guarantee standard issue individual disability income (GSI) for their key employees to supplement the group long term disability (LTD) plan. Group LTD plans often fall short when it comes to providing disability income benefit to key executives.

Supplementing the group LTD with individual coverage on a guaranteed issue basis (no medical underwriting and limited financial underwriting) is an excellent solution to providing adequate coverage for key executives. Nearly any industry with at least five key employees who are white collar could be a good prospect. [EMC]

Sileo: Share your disability insurance expertise! Teach others the sales techniques and marketing strategies that have made you successful. Help the next generation of insurance producers and financial advisors. Knowledge and experience are your legacy. [MAS]

Q: What disability product innovations should producers know about?

Crowe: One company has a business overhead expense product with an optional business loan protection rider. The rider can be written as a stand-alone policy as well. Many business owners have business loan obligations that they would have to continue to pay even if they became too sick or injured to work. This product will pay up to $10,000 a month for 10 years, with a maximum payout of $1 million.

Guarantee standard issue (GSI) individual disability income is one of the most innovative disability sales opportunities available for producers today. While employer-paid benefits are valuable, the typical group disability benefit is only about 60 percent of regular income. The group LTD usually has a maximum benefit cap, and it is taxable if employer-paid, so it replaces about 42 percent of regular income. Layering GSI on top of group LTD can help cover a greater percentage of key executives’ income.

Key GSI features include no medical underwriting, financial documentation limited to an employee census, unisex rates, premium discounts, portable policies and carve-outs.

GSI plans are available to as few as five key executives, when mandatory, and 15 employees when voluntary. They can be employer-paid or employee-paid. GSI plans will separate you from the crowd and grow your disability business. [EMC]

Sileo: One company is offering a compassionate care benefit as part of an individual disability income policy. This benefit pays if a policyholder works at least 20 percent fewer hours and loses at least 20 percent in income in order to care for a loved one with a serious health condition.

Having a loved one with a serious medical condition is both emotionally and financially stressful. You want to take care of them but you have career commitments as well. I know firsthand how stressful and financially destructive it is to care for someone you love with a terminal illness. The time I spent racing between my job and the hospital caused me to lose a lot of time at work. The loss of income I experienced was significant and took months of working overtime to replace. I can truly appreciate the incredible peace of mind provided by the compassionate care benefit.

Time is priceless! You can’t take it back and it can’t be replaced. The compassionate care benefit gives policyowners the time they need to care for the person they love. [MAS]

Schmitz: The most impactful innovation in DI this century is the introduction of guarantee standard issue individual disability income products. The next most important development would probably be retirement DI plans that make contributions to qualified retirement plans when policyowners are disabled. Other product innovations producers should know about are compassionate care, recovery benefits, extended residual and catastrophic DI riders.

I would like to see more brokers actually know the difference between “own occ,” “modified own occ,” “your occ,” “transitional occ,” and “any occ” and understand residual/partial disability definitions. You would be surprised how many brokers cannot explain the difference between non-cancellable and guaranteed renewable. The broker who knows these basic concepts can move up to being a more effective DI producer, help a lot of clients and earn substantial commissions. [JBS]

According to these successful marketers, there are endless possibilities for growth and success in the DI business.

Q: What led you to specialize in the DI market?

Mike Eskra: Upon graduating from St. Bonaventure University with a BS degree in economics and a field of concentration in industrial management and labor relations, I started in the disability income market by accident. As a distinguished military graduate, I planned to make the Army my career, but an accident left me physically unable to pass the induction exam. As luck would have it, I was unable to find a job in my chosen field.

Then, quite by accident, I met representatives from the CNA in a bar one afternoon. They suggested that I interview with them. I did and was offered a position as a “special agent” to market disability income and hospitalization products to the small business community through their brokerage operation. The product portfolio (wholesale/franchise) was designed for payroll deduction plans for employer/employee groups with at least three acceptable applicants. This was the beginning of my love affair with the disability industry that continues to be true today.

Eugene Cohen: After college I took a job that was not to my liking. I needed a career that was stimulating and one in which I could chart my own course. I interviewed for sales jobs and was most impressed with the idea of selling disability income protection insurance. Although I majored in finance at Ohio State University, disability income protection was a new concept to me.

Once I became aware of this insurance, I quickly realized that everyone I knew and everyone I saw (who worked) needed this protection and was a potential client. Because I believed so strongly in the need for disability income protection, it was easy for me to become a disability insurance specialist.

I found my niche market and soon discovered that knowledge is power. As few individuals specialized in disability insurance, it was easy for me to obtain appointments with professionals. Also, asking for referrals became part of my repertoire, and those referrals made my sales soar.

My experiences with meeting people and selling them disability income protection has given me so much satisfaction because I have not just filled a need in their lives…I have given them peace of mind.

Q: How do you prospect for clients?

Eskra: As a member of DIBROKER, a national disability income marketing organization, we develop relationships with insurance agents and financial planners throughout the United States. We provide them with disability income products, training, point-of-sale assistance, and whatever services they need to properly protect their clients’ income risks.

Cohen: As we are a brokerage agency, our clients are independent life agents, career agents, casualty agencies and broker/dealers. Brokers utilize our agency for life, long term care, fixed annuities and disability income protection.

The Eugene Cohen Insurance Agency, Inc. has been specializing in the above for more than 30 years. This enables our agency’s name to be identified with having the knowledge to help agents navigate through the everyday cases as well as the more challenging disability income protection and life insurance cases.

Word of mouth as well as advertising in insurance publications brings new clients to our agency.

Q: What are the most challenging issues for your practice today?

Eskra: Over the past several years many companies who offered their own DI portfolio have exited the disability income arena. This has not only left a product void, but a void in promoting awareness of the severe consequences of not insuring your most valuable asset—your income. Along with this void comes the general lack of training available in the insurance industry, which presents a formidable challenge to all who operate in the DI brokerage arena today.

Cohen: The most challenging issue today is getting brokers interested in showing their clients the need for disability income protection.

In past years, many companies had disability portfolios. Disability income protection was a priority and, therefore, agents were taught the concept and language of contracts by career shops.

Today, in addition to informing brokers that there is a need for this coverage, a brokerage agency has the additional challenge of helping the agents understand the basics of disability income protection and then encouraging them to go out and sell it. We tell our agents: The agents who are successful are the agents who take the time to ask clients about disability income protection.

Q: What are some of the client objections you hear and how do you respond?

Eskra: Too often many individuals fail to realize just how important their income is. Many place buying disability income protection as “probably a good thing to have,” but place more concerns about insuring their home or their car—both of which are replaceable if they continue to work and earn an income. Addressing these issues properly usually results in creating the need that leads to the solution—buying DI.

Another objection that occurs frequently is: “It costs too much.” Sometimes we design disability income plans that are unreasonable. Establishing what the “cost tolerance” of your client is along with comparing the cost of disability income protection with other items that the prospect freely spends for can be helpful.

Cohen: I have heard brokers say they are too busy with life insurance, major medical insurance and casualty insurance to get into disability income protection with their clients. We handle this objection by telling brokers that this is a key issue in financial planning. Following is a sales approach we have found successful.

Broker: “What is the longest vacation you have ever taken?” The client’s answer is usually two or three weeks.

Broker: “Why do you limit your vacation to two or three weeks?” The reply is usually, “That is the longest I can afford to be out of work.”

Bingo! The perfect opening for the next question:
Broker: “What would you do for income if you had a serious illness or accident that took you out of work for two or three years? Would you have an income problem?” Most likely a client will say “yes” and that is when you say we need to talk.

Q: Considering that many are working beyond the “traditional” retirement age, how old is “too old” for disability insurance?

Eskra: The disability income industry has made significant changes in being able to underwrite an older age group. Today companies are offering disability income protection products to older age. Lloyd’s has also developed products for the “older ages.” This trend should continue as more and more workers continue to work for years beyond age 65.

Cohen: Disability income protection should protect one’s income. I believe that as the “traditional” retirement age becomes obsolete, the manufacturers of disability income insurance should investigate ways to offer income protection and adjust the writing age to what they consider to be feasible.

Cohen: One final thought, the need for disability income protection is as strong today as it was in 1963 when I started in the insurance industry.

The same teaching mechanisms are not in place today. Today very few agents or brokers specialize in disability income protection. The need is great and the sales force is few.

Brokerage agencies are available to educate brokers about disability income protection policies and to teach brokers how to prospect, get referrals and answer objections.

The need for individual disability insurance has not changed—the market is wide open to brokers who are willing to become involved.