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M. Susan Ondack, LUTCF

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LUTCF, joined the Principal Financial Group in 2009 as the disability regional vice president covering AZ, CO, ID, NM and UT.Ondack has more than 30 years of experience in the disability insurance industry. During her career she has marketed disability, life, long term care and group benefit solutions.Ondack spent 13 years at the Paul Revere/Provident/Unum companies as a disability rep in Denver. Before joining Principal, she was a senior account executive at MetLife.Throughout her career Ondack has been very active in the promotion of disability and long term care insurance through sales, marketing and acting as an expert witness in court cases. She is a nationally known speaker on the subject of disability insurance and has spoken at the National Association of Insurance and Financial Advisors' national convention. She is the current president of the International DI Society.Ondack can be reached by telephone at 800-944-8485, Ext. 2, or by email at [email protected].

DI Forum: Key Attributes, Motivators, Industry Organizations And the Product Landscape

M. Susan Ondack, LUTCF, Eugene Cohen, Dale L. Chittenden, Thomas R. Petersen, Raymond J. Phillips, Jr., CLU, LTCP and Patrick T. Jackson, CLU
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M. Susan Ondack, LUTCF
Disability Income Regional Vice-President, Principal Financial Group

Eugene Cohen
Eugene Cohen Insurance Agency, Inc.

Dale Chittenden
The Plus Group Arizona, The Chittenden Group

Thomas R. Petersen
Petersen International Underwriters

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

Patrick T. Jackson
The Plus Group, Income Replacement Agency

 

Q: What are some key attributes that you see in successful DI producers?

M. Susan Ondack: The biggest obstacle for agents selling DI is that they do not feel comfortable explaining the cost and benefits.  The agents successful in selling DI are those who put their client’s welfare in front of their own comfort.  They are producers who want to learn and be the best financial advisors they can be.  I find full financial planners and producers brought up in the career distribution system to be the most successful producers. 

Eugene Cohen: I have worked with hundreds of disability income producers during my fifty years plus in the insurance industry. I have found that the key attributes that the successful producers have are:  focus; concern for their clients; enthusiasm; quest for ongoing product knowledge; and resiliency. 

The successful disability producer is so focused that nothing can take him off track.  There is an internal mechanism that allows him to disregard distractions. The successful disability producer is always concerned about the needs of his client.  He is concerned that the clients have disability policies that fit their current needs.  With good record keeping the producers keep in touch with their clients and review coverage on an ongoing basis.  I see so much enthusiasm in successful disability producers. They get excited about their products because they have seen how the coverage has protected some of their clients when income protection was needed. Their coverage has helped families survive after a sickness or accident has removed the family’s paycheck.  The need generates enthusiasm. In any business you are in, Knowledge is Power.  Successful disability producers know this; they are always studying their products.

It is very important to our agency to facilitate the quest for knowledge.  We work with disability producers one on one and we hold workshops.  If a producer cannot come in, we will arrange a phone conference.  Our goal is to provide product knowledge as this is a key to being a successful disability producer.

It is a known fact that all successful disability producers will have rejections. Not every sales call will result in a sale.  Successful disability producers know this and when they are pushed back, they rebound forward.  They are resilient!

Dale Chittenden: Compassion, patience and the ability to see the big picture, along with a personal story to tell, are some of the key attributes.  It seems at times our lives are moving at lighting speed and we all want the immediate solution—instant gratification if you will.  Income protection, as vital to our financial health as it is, is anything but that.  Successful DI producers see that, understand that, and have spent the time to a) communicate this need to the client in multiple ways and then b) simplify and individualize the process.  They are willing to do their work upfront by doing the simple fact finding needed (income, health, job duties), setting realistic expectations for the client concerning the most likely outcome and then creating coverage that is tailored to and works for the client’s individual need and budget.  All too often I get requests to quote the max, adding every possible rider and benefit available.  Not everyone needs that or can afford that.  I spend a good amount of my time “downsizing” quotes and teaching producers that it is better for their client to have something than it is to scare the client away and they buy nothing. 

Thomas R. Petersen: Unafraid! I don’t mean that other producers are afraid, but many producers fear losing a life sale or a group sale if they discuss disability insurance. They think that the prospect will have overload on all the products, or, at the least, start mentally budgeting money away from the larger commissioned product.

The reality is that those who approach selling disability insurance by including it in their early discussions with prospects are often rewarded more by more sales as the prospect listens and understands that a loss of income can occur other than from death!

Raymond J. Phillips, Jr: One of the key factors I see in successful DI producers is they are organized and methodical in their approach to their clients and prospects.   Their approach to marketing to prospects is done in a strategic, consistent manner.  Indeed, often just getting a prospect to commit to sitting down to discuss DI planning is a great task in itself.  It requires consistent and timely follow up in order to get an appointment to make the client aware of the whole disability income insurance abstract. 

Successful DI producers are very knowledgeable and objective when comparing and presenting coverages.   For a proposed insured the jargon can get very confusing.  Within their skill set, successful DI producers have an ability to communicate often complex, confusing coverage descriptions into concise, understandable descriptions.

Their organization skills continue well beyond the sale. The successful producers I’ve run into understand that it is important to have consistent, timely communication with the client over the years.  As the policy remains in force an agent should help a client navigate future purchase options or adjust coverages as occupations and incomes change.  Very often this engagement leads to new sales with their existing clients and/or referrals to new DI purchasers.  

Patrick T. Jackson: Successful DI producers should possess several important characteristics.  To me, the beginning point is that producers need to have both integrity and honesty coupled with a deep personal belief about the daunting financial risks that each of their clients face.  A caring and compassionate producer should endeavor to insure that all of his clients cover the risk of a disabling event and they should ideally own their own income protection plan. A producer should consider the complete financial picture of each of their clients’ needs to be able to articulate the potential risk as well as the pennies on the dollar solution to that risk.

 

Q: What role do you think industry organizations should play in motivating brokers to strive to provide DI to the majority of their clients and what can be done to get industry organizations more involved?

M. Susan Ondack:  It is my belief that NAIFA and NAHU need to promote disability insurance to their members.  Not only is it a benefit to their members, it is also a responsibility for all financial advisors to be aware of all the risk protection products available in today’s marketplace.  NAIFA boasts that their members earn much more than non-member producers.  They could impart the knowledge of how DI still has the best recurrent income stream for producers in the industry.  I was always annoyed when I went to the NAIFA convention and there were no DI programs to be heard.  NAHU members are striving for alternatives to surviving in this industry without health insurance being their bread and butter.  Well, DI is right here, a health insurance product, and a great source of income for its members.  
 
Eugene Cohen:  I think that it is the responsibility of the companies that offer disability income protection as well as the responsibility of the brokerage general agencies to promote disability awareness.  It would not hurt if industry organizations got involved also, however, in my organization we are always promoting disability protection.  We feel it is our responsibility to make all of our brokers aware of all of the disability products that are being offered.  We do this by advertising, sending emails to producers, sending out newsletters, providing training sessions and making one on one phone calls to our producers.  We do this on a daily basis.
 
Dale Chittenden: More attention to income protection products needs to be given by all of the industry organizations. With many of the industry organizations right now it is pretty much an afterthought, if given any credence at all.  Many organizations continue to focus their programs, training and attention on life insurance, the markets, and other investment and income producing products without any focus on the one asset that makes all those products sellable!  There is a great need for education and training on income protection risk management products for both the individual and the business markets. This need embodies what is right for the client by helping him keep all other planning in place should their income be lost due to accident or sickness. Yet few organizations give it the time of day.  The International DI Society (IDIS) was formed specifically to promote the disability insurance industry because there was very little income protection advocacy in the other industry organizations.   We need our NAIFA, AHIP, FSP, CFP, and NAHU local chapters to realize the importance of income protection and risk management, without which the financial plan goes to ruin.  These organizations and others like them need to promote this training and education to all of their members. 
 
Thomas R. Petersen: Industry organizations, like producers, need to include the need for disability insurance with the same enthusiasm as they do their core products. If they can demonstrate that selling disability insurance alongside life and medical sales builds a producer’s income and creates stability by having the client even more vested to the producer, the producer will create an empire not just a sale.
 
Raymond J. Phillips, Jr: I think the key factor industry organizations can provide is the promotion of the appropriateness of the DI purchase in the overall financial plan.   Articles, information, meetings; promoting this as an essential consideration for every financial professional will hopefully lead to more producers and planners being motivated to integrate this into their clients’ overall insurance plans or to seek partnership with someone who will.
 
I wince every time I hear DI described as a “niche” market.  That’s a label we seem to want to condone and promote.  It shouldn’t be a niche.  It should be ubiquitous, universally considered and implemented.   The industry organizations can help change this view of this important coverage.  
 
Patrick T. Jackson: Industry organizations need to continue to train producers on how to bring up the conversation with both clients and prospects. Offering real life stories about people who have lost their income due to a disabling event are very powerful tools we can provide to   producers. Events like Disability Insurance Awareness Month, International DISociety meetings and National DI Day serve to elevate the conversation and hopefully motivate producers to talk to their
clients every month about income protection planning.
 
Q: What are some key motivators to impress upon agents that for the most part avoid DI sales?
 
M. Susan Ondack: The most key motivator for me to impress upon producers is that without income protection, the entire financial program they have designed could be at risk.  I also like to promote DI specialists, who will help a producer educate and protect their clients on a split basis.  After all, how many times have we heard that 100 percent of nothing is still nothing!  Collaboration can work both ways and increase client satisfaction and producer income. I have a financial planner in Denver who went into collaboration with a DI specialist and increased his income in 2014 by $115,000, not to mention the residual income he will have.  This is not brain surgery, it’s common sense!
 
Eugene Cohen: The reasons why many insurance producers avoid disability sales are:
a) They are uncomfortable with the products due to lack of knowledge;
b) They think other products are easier to sell; and
c) They believe that disability underwriting is very different.  
 
How do we overcome these issues? In my agency we teach, so that the producers become comfortable with the uncomfortable. They will not avoid presenting disability products once they have the knowledge. The same principle applies to underwriting disability applications.  Once the producer understands the underwriting requirements, the misconception disappears. The reason they think other products are easier to sell is because they have been trained in those products and are comfortable with them.  With an open mind and a quest for knowledge, disability income will become an important part of an insurance producer’s portfolio.
 
Dale Chittenden: Income protection is a win-win situation.  It is a win for the producer and it is a win for the consumer. Unfortunately, I don’t think most producers see it that way.  The consumer needs to insure the engine that makes the rest of their financial world run—their income.    Many consumers feel, however, “it” will never happen to them and thus push back on the producer, who then feels it prudent to let the DI sale go to keep from jeopardizing other sales.   But, in doing so, what they are really doing is putting the entire plan in jeopardy.  If anything happens to the client’s income stream, nothing else gets funded.  
The win for the producer is that generally, once a DI policy is on the books, it stays there and requires very little maintenance.  The second win for the producer is that DI policies pay a significant renewal commission, unlike many of the other products that they sell. Thus, with a significant commission and a high persistency rate, the commission renewal stream becomes very healthy.  Between first year and renewal commissions a producer can generate a substantial, long term, steady income stream by simply writing one or two applications per month. 
 
Thomas R. Petersen: 
  1. The market is easier than they think. Mostly because so many avoid talking about disability insurance. 
  2. The market builds and builds over time, it is not a quick sale program.
  3. The commissions, while not as high as life insurance the first year, often far out pay life insurance within 2-5 years and persistency is higher.
  4. Disability insurance sounds depressing, so change the game and call it income protection! 
  5. You are not alone! Members of the International DI Society, fellow producers, the NAIFA Young Advisor Team, and many others are there to help, advise, cajole, and support you.
 
Raymond J. Phillips, Jr: I think the most important one is that it protects the foundation of every insurance and financial plan—the client’s income.   Without a paycheck, all other insurance coverages are impacted; all savings are impacted; and the savings, nest eggs and in force investments could very well be compromised.
 
Patrick T. Jackson: I think we need to reduce the complexity of the need conversations we have with our clients.  Simple direct questions to a prospect can clarify the issue.  How long can you exist without a paycheck before financial problems become acute?  Who will pay your family if you are unable to work and earn income?
Appeal to the producer’s own financial needs by showing them the financial result of writing income protection on 12 clients per year for 10 years.  
 
Lastly, appeal to the producer to do “the right thing.”  Having your clients protected from the risk of a disabling event provides a firm financial platform for them and allows them to utilize more services from you.
 
Q: How has the DI product landscape changed in the past 10 years, and what bright spots exist now and/or may be on the horizon?

 
M. Susan Ondack: In the past 10 years we have seen the DI product landscape change in a most positive way.  There are simplified underwriting programs, guarantee issue and guarantee to issue programs.  Teleapp,
e-application and e-signature capabilities.  The issue and participation limits have increased and medical conditions, such as antidepressant usage, have changed dramatically!  It is a great time to sell DI!
 
Eugene Cohen: The last ten years have been exciting years for disability income insurance.  There are companies that are promoting disability income as well as creating new products.  There is a disability product now for most occupations.  There are simplified underwriting as well as teleapps.    The companies that offer disability are very supportive and enthusiastic—their enthusiasm is contagious!
 
I am excited that we have financial advisors, life agents, health agents and casualty agents that need our help in education on the various disability products that their clients need.  Their clients not only need individual disability products, they need disability buyout insurance, disability key person replacement, disability overhead expense, and disability retirement security. Just look at the opportunity general agents have to build disability sales.  The more we educate, the more we grow! We are in the most exciting time for disability income protection sales.
 
Dale Chittenden: After almost becoming extinct, the income protection market has come back with gusto!  More and more carriers are deciding to come back into the market in one fashion or another.  The few that never left have continued to be innovative with product design, but attempt to stay away from the pitfalls of the mid-90s.  Time will tell if they truly can.  Underwriting has tightened up on one hand, but is keeping up with advances in medical science on the other.  For example, it used to be that someone taking any anti-anxiety drug was not able to get DI coverage—now they can.  Yet at the same time, I still see carriers attempting to stick to sound medical underwriting practices to not “give away the store.”  Product design is also evolving and becoming simplified.  This is a bright spot because the easier it is to explain the coverage, the more it defeats both the producer’s and the consumer’s view that income protection coverage is complicated and designed not to pay.  Probably the biggest hurdle I see, at all levels, is the perception that disability insurance is complicated and hard to understand.  The more we can do to simplify the provisions and give the consumer confidence the plan will pay when they need it, the better the penetration into the market we will have.
 
Thomas R. Petersen: For the most part, products have stayed the same and benefits have not changed dramatically in the past 10 years. There are two things that have changed:
  1. Underwriting has loosened up compared to 10 years ago. This means more sales and more policies to be placed. There are more resources for those with health issues, higher income needs, and occupations that have traditionally been difficult.  Coverage options to meet business needs have also expanded. 
  2. GSI programs have caught on and are one of the leading edge products. This is true in both the regular disability markets as well as excess disability programs. 
 
Raymond J. Phillips, Jr: A major change over the past 10 years has been a liberalization of the contract coverages/definitions and the increasing issue and participation limits.    It wasn’t a great deal beyond 10 years ago that the DI markets were in tumult and much of the language and benefit maximums had become more restrictive. There has been a consistent movement toward taking definitions and I/P limits “back to the future.”   It’s a great time to be a DI consumer!
 
Another segment that has liberalized over the past number of years is the amount of guaranteed standard issue (GSI) offers that can be made.  It’s been my experience that this has allowed individual DI to be made a part of the executive benefit consideration in small and medium sized firms, providing more individuals exposure to coverages for which they may not have previously been aware they could qualify.
 
There has been creation or enhancement of DI coverages available over the past decade.  Key employee DI coverage is now part of the conversation for business planning.  We can now provide protection for a business owner’s loans.  There’s never been a better time for a planner to approach a small business owner in reference to DI protection.  The market has adapted to a point that we can now even provide protection for an individual’s pension contributions.
 
I think (hope?) a bright spot might be a move toward making the application and underwriting process less difficult.  Logically, it seems that the evolution of technology and “Big Data” should spawn such a dynamic.    Many times we’re working with planners who do not do much disability income insurance.  Nothing is more frustrating than to have them scared away from this most important product offering by a cumbersome, clunky experience in underwriting.   Hopefully innovation in processes will alleviate the fear that I think many planners have of getting involved in DI selling.
 
Patrick T. Jackson: Growing concerns for the industry are the baby boomers retiring in large numbers and the dwindling number of qualified producers entering the insurance industry. As a result there are fewer disability experts to market income protection products. 
 
Additionally, during the last 10 years few new carriers have entered the market, however, the few remaining carriers are profitable. 
 
As the millennials begin entering the workforce, the hope is that they will follow in the footsteps of the baby boomers and purchase income protection coverage.  If this happens, a large number of income protection policies will be sold during the next 20 years. We hope for a large number of young producers entering the business and selling coverage to the millennials as happened with the baby boomers in the 1980s.

Disability Insurance Awareness Month Planning Panel

Eugene Cohen, Marvin H. Feldman, CLU, ChFC, RFC, Sean Hanson, Patrick T. Jackson, CLU, M. Susan Ondack, LUTCF, Thomas R. Petersen and William J. (Jeff) Wheatley
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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

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