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Raymond J. Phillips, Jr., CLU, LTCP

Raymond J. Phillips, Jr., CLU, LTCP, is president of The Brokers Source, Ltd./Plus Group Pennsylvania, a full-service, independent insurance brokerage firm. A past chairman of the National Association of Independent Life Brokerage Agencies (NAILBA), Phillips is past president of the Pittsburgh Chapter of National Association of Insurance and Financial Advisors, the Pittsburgh Association of Health Underwriters and the Society of Underwriting Brokers (SUB Centers). He has served on the board of the Pittsburgh chapter of the Society of Financial Service Professionals and is a member of the International DI Society, The Plus Group, The Marketing Alliance, SUB Centers, and the Pittsburgh Estate Planning Council. Phillips can be reached at The Brokers Source, Ltd., One Forestwood Drive, Suite 111, Pittsburgh, PA 15237. Telephone: 412 847-0770. Email:

DI Forum—September 2019

A Panel Of DI Experts Looks At The Disability Income Market And What Can Be Done To Increase Agent Involvement In DI Protection Solutions

Q.What are your assessments of the individual, group, business, and excess disability markets today?

There are very few companies that write disability income protection. And there are very few advisors who offer it.

So, if there are very few advisors who offer it and the product is needed by many people, it’s a great way to grow your book of business. Wouldn’t you agree?

The products in the individual market are so versatile. They cover so many different needs. And as I always say, “Need motivates action.” There are business disability products to fund a buy/sell agreement. There are disability products to fund business loans—if an individual is disabled and can’t pay a particular loan. There are key employee policies to help an individual cover the needs of the business when an employee is disabled.

And the limits of individual coverage that the individual companies are writing today are high. When I started in the business the amount of coverage I could offer a client was much more limited. The limits were low. The underwriting was very strict. And the products were not as creative as they are today. Yes, my assessment of the individual disability market today is that it is exciting.

Group disability coverage (also known as Group LTD) for many individuals is important. It’s great when a company can offer group coverage. Group LTD insurance is good for people who don’t have disability insurance. It’s better than nothing. It’s better to have something than to not have a policy.

But I want you to understand that group LTD coverage can be limited for individuals who are making a high income. We can run into something we call “reverse discrimination.” These higher income earners are discriminated against because a small portion of their income is covered with that group LTD policy.

Let’s take a typical group LTD policy…it insures a percentage of a person’s income, let’s say 60 percent, up to a limit of say $10,000 per month. Let’s take an individual making $300,000 a year. That person can have a particular problem. They earn $25,000 per month. But the individual is only getting $10,000 per month in benefits with their group LTD plan. With the group LTD plan alone, this person is insuring 40 percent of their income. Well, they need more coverage. So, let’s take an individual disability insurance policy and layer it on top of that group LTD coverage.

And let’s have that person self-pay their individual disability policy premiums so their benefits may be tax free. (Just a reminder, when the employer pays a group LTD policyholder’s premium, the benefits may be taxed.)

There are often other limitations with group LTD coverage. Many of the group LTD policies are only covering mental and nervous disorders for a limited amount of time. For example, some of the group LTD policies only cover mental and nervous disorders for two years unless you’re in a hospital.

Also, some group LTD plans may not cover bonuses and excess income an individual may receive. And the definitions of a “disability” in group LTD policies may not be as comprehensive as the definitions in individual policies. Also, many group LTD policies may not be portable if you leave your job.

Both group LTD products and individual disability insurance products are important in protecting income. When a client tells an advisor, “Oh I don’t need individual disability insurance, I have group LTD coverage,” remember that this is not necessarily an objection. If the client has group LTD coverage, this person likely understands the need. And that is often the perfect start to a conversation regarding the need for individual disability insurance as well!

Without looking at any statistics from LIMRA, or other authority, and only from my little corner of the world, my view is that the group LTD market is recognized and stable. The individual, business and excess markets are not overly recognized and are underpenetrated.

Group LTD (and short term DI, STD) is a product that is widely sold in the group benefits realm. It’s an offering that many employers recognize as an offering to their employees to enhance their competitive stance via an overall benefit package (I’m not sure that many understand the underlying definitions very often however!). While many employees may not know exactly what it is, they know they have “DI at work.”

Other DI offerings seem ignored by consumers and employers. Sadly, we’ve run into many, many instances where company group reps themselves don’t know about, or don’t seem to care about, their own carrier’s non-group offerings. So much for a synergistic, strategic relationship with a company rep in this arena!

However, that lack of recognition begets tremendous opportunities for planners, advisors and agents to enhance their practices and prospect for new clients. The disability income market is staid, and historic…and yet still offers, effectively, a ground floor opportunity. Especially in the lesser penetrated industries and markets. Doctors, dentists, even attorneys, to a great extent recognize and embrace the consideration of income protection relatively speaking. Think of all the other industries out there!

Underpenetrated due to lack of communication, marketing, and incentive.

The specialty and high-limit DI market is strong, but we have seen a relative plateau in IDI business and a greater focus of DI advisors on the burgeoning GSI sector of group DI, especially among physician groups and law firms. Employers get tired of wrestling with medical insurance and see disability plans as great group benefits.

The business disability markets continue to be strong as there is always a business deal taking place.

The individual disability income marketplace remains on a steady path. There is a fantastic opportunity, however, for carriers to re-energize the marketplace with exciting and creative solutions. The challenge is to create a product and premium structure that the consumer will understand and want to purchase. The group LTD marketplace is becoming more of a commodity product with a “race to zero” mentality. There is limited interest in provision quality today perhaps due the medical care cost issue that has become so time consuming and expensive. The excess disability markets are exploding with new ideas, coverages, and new premium. Product creativity and underwriting enhancements have provided unique solutions for the business and high-income markets.

Q.What needs to change to get producers who shy away from selling DI to embrace these markets?

I believe the saying, “Knowledge is power.” The problem that we have in the industry is that we are often dealing with advisors who haven’t specialized in disability income protection. They don’t know a lot about it, so therefore they shy away from it.

Most folks will shy away from something to sell if they don’t understand it. He or she doesn’t want to present it because they won’t be able to handle the questions the clients would ask.

Many advisors have worked very hard to earn their clients’ confidence. Often advisors don’t want to jeopardize that confidence by offering a product that the advisor knows nothing about.

So, my suggestion is that we have to educate the advisors. First of all they have to understand the need for disability income protection. It’s very simple. Many times advisors just want to insure the golden eggs. We have to insure the goose that lays those golden eggs.

The insured’s greatest asset, many times, is their ability to earn an income. If you take an individual who is 35 years old, who’s earning $100,000 per year through age 65, that future income is worth $3,000,000. That’s if he or she doesn’t have any raises, bonuses, or any additional compensation. So that could be their most valuable asset. All of the insured’s hopes and dreams are based on that asset—future income.

Why doesn’t an advisor talk about business overhead expense for a small business or a small professional person? The advisor may not even know it’s available. So, naturally, they’re not going to bring it up.

How about an individual who funds a buy/sell agreement for life insurance and their advisor never brings up the fact that there is a policy for disability that will help fund that buy/sell agreement if one of the owners has a serious disability and can’t work for a long period of time?

So, this is our job. Our job as a brokerage agency is to educate and to help the advisor. I hear many times an advisor say to me, “This client got a million dollars of life insurance, best class. But they’re putting a rider on my client’s disability policy that’s excluding coverage on his back. And my client says he’s only been going to the chiropractor for preventive adjustments.”

Well there are two points that need to be made regarding this scenario. First of all, with life insurance, a bad back isn’t generally going to affect an individual’s life expectancy. So, the client may get best class.

But a bad back could affect a client’s ability to work and earn an income. The result—the client could be given best class with his life insurance and a back rider on his disability policy.

The second point I’m going to make is going to delve more closely into the back rider itself. In our example the client said he had only been going to the chiropractor for preventive adjustments. Well, that may be the client’s perception. But with disability insurance underwriting, underwriters are almost always going to ask for an Attending Physician’s Statement (APS) regarding an applicant’s back treatment. And in this example, the APS said the client was receiving more than just preventative adjustments.

Here’s another example of a rider that can come up on an individual disability insurance policy. If an individual is going for counseling, or taking anxiety and/or depression medication, there’s a good chance that the individual will have a rider on their policy excluding mental and nervous disorders.

We have to get the advisor to understand the underwriting of disability insurance. It’s completely different many times than life insurance underwriting. We manage the advisor’s expectations, so they can manage their client’s expectations. We always do our best to prepare the advisor. It goes back to giving the advisor the knowledge he or she needs to feel confident providing their clients with disability income protection insurance.

One stumbling block is the processing and underwriting of DI business. There’s nothing worse than preaching, prodding, pulling and cajoling a non-DI oriented planner for months and years on end about the power and the glory of income protection planning only to have them submit their first case and be slogged through the mud and dreck that is the processing and underwriting of DI business. Often it creates a one-and-done dynamic.

In this era of ubiquitous preventative medicine, often cumbersome underwriting isn’t something we experience for those who are unhealthy. Tests, procedures and exams are done that perhaps weren’t even here even just a few years ago. Those need to be reviewed and scrutinized by an underwriter, which can make for a lengthy process.

In addition to laborious underwriting itself, the application process has been primitive. Lengthy paper applications. Uncomfortable tax returns. Something that many planners have gotten “un-used” to in their primary practice’s focus.

The good news is that I think the carriers have recognized this—at least the processing aspect—and electronic applications, e-policy delivery, etc., have begun to work their way into the market. That evolution will not stop.

Likewise, seeing the ever-expanding offerings of “accelerated underwriting” on the life insurance side, it’s only a matter of time before such initiatives bleed over to the disability insurance market. I often say to my staff and our constituents, “We are at the beginning of the end of processing and underwriting as we’ve known it.”

Second, I think carriers and agencies like mine (BGAs, MGAs, whatever you want to call us) need to do a better job of spreading the word of this market and the opportunities herein. We need to bludgeon the market with the message.

I’m a humble member of the DI marketing group, The Plus Group, with some of the greatest DI minds and marketing minds in the nation. Each year we collectively rally around the concept of “DI Day,” usually in May to jive with Disability Income Awareness Month (DIAM). Tens of agencies around the country have meetings solely focusing on the abstract and the concrete aspects of income protection, bringing in motivational speakers, company reps, and even consumers who’ve experienced disability income up close and personal.

We’ve had tremendous success in not limiting our efforts to a day, but invoking a “DI Year” concept. Weekly something is sent, posted or otherwise on DI. It is an endlessly evolving educational process. Ours is the notion, “If we build it, they will—eventually—come,” so to speak.

I think with continued educational offerings from those who are in a position to do so, along with the continued technological enhancements to processing and underwriting, we are on the cusp of new players and producers embracing this important insurance. It should be the bulwark of every financial and insurance plan.

Underwriting. Although Guarantee Standard Issue (GSI) and Simplified Issue programs are helping, we could use a more automated process for gathering health information. (Where is that medical ID-card we heard about years ago?) In the meantime, we can make it easier by streamlining the process. With broker training we can get brokers to ask a few important questions:

  • When were you last hospitalized, and why?
  • What prescription drugs are you currently taking?
  • When did you last see a doctor, and why?
  • What does last year’s tax return or W2 show?

Producers who shy away from selling DI should not be able to call themselves financial advisors. If they do not want to sell DI, they should partner with a DI specialist.

Scalability. Easy and accessible e-applications, or outsourcing the application process, like we have done with DINGO.

Greater education of the general public, but more important, greater education of life and health insurance agents. General agents and insurance carriers need to take a greater role and responsibility in educating insurance advisors about the importance of DI and how to better market their programs. This is not a new problem or issue. What many carriers and GAs consider education is frequently product education rather than sales education. Yes you need to know your products, but producers are missing many fundamentals of the sales process.

Many producers shy away from discussing disability income because they lack the appropriate training and do not understand the risk or the process. Training is the key. I would recommend that the producer partner with a DI expert to gain disability expertise.

Q.What are some tips for agents to overcome objections to buying income replacement protection?

When offering individual disability insurance to a client, there are four basic objections an agent may encounter. No need, no hurry, no confidence, and no money. The agent wants to eliminate objections before they become objections.

First you must uncover the need. How do you do that? You ask questions.

The advisor can ask the client, “How important is your earned income?” About nine out of ten times the client will agree that his or her most important asset is their ability to earn an income.

When the client understands and agrees that their ability to earn an income is their most valuable asset, then it becomes very easy. You must get your client to understand they need the policy even before you start your presentation.

To further point out the “need,” I have the client picture a bridge made up of all of his or her financial obligations—the mortgage or rent, car payments, car insurance, kid’s bills, utilities, health insurance, groceries, cell phone bills, etc. And then I ask them to picture the only thing holding up that bridge is their paycheck. I ask the client, “If the paycheck is gone, what particular problems will you have?”

I may also ask, “If you were out of work because of a sickness or accident for three or four years without a paycheck, without an income, without any earned income, would you have an income problem?” And naturally they will say yes. Then I feel I have overcome the no need objection. I won’t go forward with the presentation unless they understand they need the product.

The next objection is, no hurry. I want to eliminate that. But I know one thing. Need motivates action. If someone needs something, they’re going to act very quickly. Years ago, when I was in my early 20s, my friend asked me to stand up at his wedding. Naturally, I said yes. They said everybody was going to be wearing a tuxedo and that I had to go down and get measured for a tux.

Guess where I was within days? Need motivated action. I was in that tux shop getting fitted in that tuxedo.

If your television goes out and there’s an important ball game you want to watch, what happens? You’re getting that TV fixed or you may even buy a new one immediately. It’s amazing, when we need something, how fast we’re going to act.

Need always motivates action. You have to remember that. If the client knows they need to protect their income, they’re going to be in a hurry to get the policy. The no hurry objection won’t come up.

The third objection is, no confidence. I believe you really have to know your product and you have to be prepared. So, before you go out on that appointment, you’re going to go through that illustration. The illustration is going to help you understand the product.

And you’re not going to prepare by going through the illustration just once or twice. You’re going to know that illustration until you could just shut your eyes and see it. I study the illustration. I practice my presentation. I know where I’m going to go in the appointment. If you know and understand the illustration, you’re going to instill confidence in your client.

So, again, you have the need objection overcome, the client is going to act if they need it—which is going to destroy the no hurry objection, and If you know your material you’re not going to have any problem instilling confidence.

The last objection is, no money. It’s interesting. When someone needs something they’re always going to find the money to purchase it. The no money objection will generally come up toward the end of the presentation.

Imagine, you’ve already gone over all the benefits in your presentation with your client, reading right from the illustration. At this point you will summarize the benefits again very quickly, and say to the individual, “If we were to deduct x amount of dollars from your checking account every month for all of these benefits, would that create a financial problem?”

Now you know what the individual is going to say—either yes or no. If they say no, you’ve overcome the objection and then you proceed to fill out the application. If they say yes, my response has always been, “I don’t want you to buy this policy.” I don’t argue with people. I don’t say, “Buy this…sacrifice to buy the policy.”

The client is going to tell me if they can afford the policy. And if premium is an issue, I say, “I didn’t come here to create a financial problem, I came here to solve one. So, if you leave here very uncomfortable, I haven’t really done a good job. So here’s what I want you to do. I want you to think about this. Let’s presume we started off with half the monthly benefit. So, we would be deducting x amount of dollars, which is approximately half the premium for half of the benefits. Would that work for you?” If money is still an objection, reach out to the client next year.

I believe you overcome objections before you get objections. And that’s the way I’ve been handling them. I don’t get a lot of objections when I present a policy.

As best as I can tell, there are three major objections to income replacement coverage and they’ve been there forever. I won’t get disabled. I have it at work. I can’t afford it.

I won’t get disabled. Well, let’s hope the client doesn’t. But according to the Council on Disability Awareness website (bookmark that page people!), a 20 year old has a One in four chance of a disability before they retire. Now maybe it’s not a career ending disability, but even a disability of a few months can blow out savings and impact a lifestyle. Are chances better or worse of your house burning down? Anecdotally, there’s never been a house fire in my neighborhood, but I’ve got two neighbors on my block alone who’ve been out of work for months now, one involved in a serious auto accident, the other ravaged by cancer.

I have it at work. Great!! Now what is it? How much? What does it cover? Sadly, if you pose that question to most clients they won’t know and the conscientious planner should ask for the client’s benefit booklet to make sure they aren’t short—and many higher income earners are. Most often group LTD benefits are taxable upon receipt and have a monthly maximum. Even a robust plan might leave a mid- to high-level earner with a small percentage of normal take-home pay if they get disabled. Tough to maintain a high income lifestyle when disabled as it is, let alone with a small percentage of pre-disability income.

We’ve also worked with a number of advisors whose clients have described, “I have it at work,” only to have reviewed their coverages and find out their work plan is a short-term disability plan. One that’s built for coverage of just a few months.

I can’t afford it. Many times the client can afford proper coverage, they just don’t want to afford it. This is where a holistic planner has a tremendous advantage, most often knowing the incomes and assets of the client inherently. And, even if one isn’t, some probing questions can give general insight into how much the burden of the DI premium will really be.

It’s important to point out, too, what it really protects. I think subliminally we send the wrong message as an industry to proposed insureds. A 40-year-old client sees a $3,000 premium, let’s say, and $5,000 monthly benefit. Well, to pay $3,000 to get $5,000 doesn’t sound like that great of a deal! But if we help that client understand that it’s $3,000 per year for $60,000 per year of DI benefits with a potential in this case for well over $1.5 million of total payout in a worst case scenario aspect (early disability)—that might carry more of an impact.

All that said, all the gurus, commentators and articles I’ve read say that the upward percentage of gross income a client will pay for a disability income policy is two percent. When running into a situation where an optimum DI plan exceeds that two percent number, consider tailor-making a plan that hovers around that mark. Longer elimination period. Shorter benefit period. Sacrificing policy riders. All can be effective ways to assure the client some protection. In the income replacement market, something truly is better than nothing and a plan that’s inforce at any level can soften the damage to a client’s lifestyle because of an extended sickness or accident.

Ask questions. What is your backup plan for partially surviving an accident or illness that would’ve killed you 20 years ago, but with modern medical technology, you can now survive with a disability? Listen. Most people that do not have DI were never asked.

Disability insurance is the most important financial safeguard an income earner can possess. If you were to become disabled and lose your income, how would you pay bills, kids’ school tuition, all other insurance premiums, mortgage, car loans, groceries, etc.? Even medical bills can be paid, provided there is a source of cash flow! Medical insurance does nothing for your living expenses.

At our last three DI Days, speakers have discussed their disability claims experience. All have been different and range from a serious car accident, Achilles tendon rupture and subsequent infections, to a physician with shoulder issues. The discussions are far reaching and include financial, family, personal and other considerations. Our producers hear first-hand experience to better understand the personal and business struggles when a disability moment strikes. This experience also allows them to be more comfortable talking about income protection coverage and the importance of a monthly check to replace lost income. By discussing these claims stories with potential prospects, they can overcome many objections. Not all claims experiences were handled positively by some carriers. As a result, we created a Claims Concierge Service to help our policyholders with the claims process.

Q.Many agents deal with high net worth individuals—what advice can you offer to increase sales in the individual and high-income markets?

High net worth clients can be dicey to deal with from an income planning standpoint. Fundamentally, we can provide jumbo DI benefits via specialty markets. No issues or problems there.

However, high net worth clients might end up “outrunning the coverage of disability income protection” due to the nature of their business. Disability income insurance is built to “protect your paycheck” to coin the old DIAM slogan. Many high net worth individuals derive a high percentage of their income in passive income vehicles—rents, dividends, etc. Those passive vehicles will continue to generate income regardless of the clients’ health and involvement. Too high of a percentage of such income will lead to insurability issues.

One could argue that a critical illness policy could be offered to such individuals to address certain morbidity exposures. Disability income’s cousin, critical illness, offers a lump sum payout due to diagnosis of many dread diseases, heart attack, stroke, etc. It doesn’t have an earned/passive income criteria to get underwritten.

High earners are the market in CA. Focus on business owners and those who earn over $80,000. In CA, SDI pays up to $5,425 per month. It can be difficult to motivate lower earners when they have this government benefit. Fortunately, there are plenty of high earners out there. When they are married and have children they are the most motivated to protect their earned income, which provides for their family and maintains their lifestyle.

Stress that those with higher incomes have more to lose and covering 40 or 50 or 60 percent of their income is not going to provide enough capital to cover the usual expenses of their affluent lifestyles. Those with higher incomes are not sufficiently covered by one, or even sometimes two, layers of DI. High-limit, excess DI is critical for high-net-worth clientele. The purpose of insurance is to keep what you have, not try and liquidate assets to pay for living expenses following a disability.

The high-income market is the perfect market to discuss cash flow and tax liabilities. Many group LTD plans do not cover total income either because the stated monthly maximum is low or the plan covers salary only. To add insult to injury, many plans are employer paid and hence any benefits received are taxable. In the situation of high-income individuals, we provide a Group LTD Insurance Benefit and Tax Analysis identifying the net monthly income loss as well as benefit, tax, and health care premium solutions.

Q.What tips can you offer to ease entry into the business DI market?

Tip #1: You should know the business products that are available. Companies have designed many different products for business owners. Below are short highlights of some of the business products out there.

Business Overhead Expense (BOE): You may be working with a business owner who has seven or eight employees and the owner is the main thrust of the business. Without him or her, the business isn’t going to function. In this case, you’d talk about a business overhead expense policy.

An overhead expense insurance policy helps insure the business owner’s business expenses if a disability prevents them from working. It can keep the business afloat. And the list of expenses that are covered is quite extensive.

Disability Buy/Sell (also known as Disability Buy-Out Insurance): You may have sold an owner a life insurance policy to fund their buy/sell agreement. Well, you want to ask them, “How are you going to fund your buy/sell agreement for a disability?” Because disability buy-out insurance helps provide funds needed to purchase a totally disabled business owner’s interest. So, you’re using the insurance company —rather than you acting as the insurance company. That product is extremely important. Why don’t more business owners have it? Simple. Because they just don’t know about it. And why don’t they know about it? Because many advisors aren’t bringing it up.

Key Employee Replacement: There may be a situation where you go into an owner’s business and you uncover that there is a key employee. This key employee could even be the owner if he or she doesn’t own more than 50 percent of the business. (There are additional criteria that defines a key employee that you will need to know as well.)

The purpose of a Key Person Replacement insurance policy is to help protect the business from the total disability of an employee who is extremely important to its success. This coverage helps minimize the disruption to a business if it loses a key person. Benefits are paid to the business and can be used as needed to help with new hiring costs, staffing needs and replacing revenue.

Business Loan Protection: When talking to a business owner, he or she may say, “I have a loan. We purchased more equipment.” Or perhaps the owner reveals they’ve purchased another business. Your response is, “How do you fund that loan if you’re disabled? Because I have a product that will help you pay that loan, per underwriting guidelines.”

Tip #2: It’s important to work with an agency like ours that trains, teaches, and helps you get familiar with the products.

Tip #3: So, how do you bring up business disability products to a business owner? You ask questions. Asking questions uncovers the need.

You can ask a small business owner to tell you the longest vacation they’ve ever taken. They may say two or three weeks. Ask them why they don’t take longer. They’ll tell you. They can’t be gone longer. They have to watch their business. They have to make sure everything is done properly.

Tip #4: Where do you get the names? Where do you get the business people? You get clients through referrals. One business owner can refer you to another business owner. Also, look at your book of business. You know who is a business owner.

Cold calling works. A lot of people aren’t calling business owners about disability income protection. You can buy a list of business owners and call them on the phone. Google the business beforehand to get an idea of how many employees the company has. You may have to make several calls before you get one appointment.

Tip #5: What are the types of businesses to seek out when calling about business disability insurance? These business products are needed by all kinds of different small businesses—law firms, medical practices, architectural firms, accounting firms, engineering firms, small manufacturing companies. We have products for the blue-collar business market and white-collar businesses.

Tip #6: So, what do you say to the business owner? Whether you’re talking to a longtime client or to a business owner on a cold call, you say you’d like to make an appointment to go over disability income protection with them.

During the cold call you tell the business owner that you work in the business market with business owners and you work in the area of disability income protection. You let them know that you have a policy that will provide them with an income if they can’t work due to accident or illness.

Business owners have to protect their investment in that business. If that business goes under, employees can get another job. The owner? Well, he or she has a lot more to lose.

Most owners aren’t working 40 hours per week. It’s more like 60 hours per week. Plus, they never take long periods of time off. Without disability income protection, even a short time away from work due to a disability could be devastating to the life of a business.

So, a business owner’s need for disability income protection is great. Business disability protection is going to protect their standard of living. It’s going to protect their investment.

Tip #7: Remember, the owner may have a group LTD policy for his employees. You want to investigate that group LTD policy because that policy may only cover a small portion of the business owner’s income. So, naturally, we’d have to put another policy on top the group LTD policy to protect the owner.

The obvious easy strategy is to bring up the concept to any business owners or group benefit relationships one might have. Have group LTD on an account? Look to see where the max benefits of the group LTD plan leave higher income earners short.

If an advisor works in planning for those who own their own business, simply ask if they have benefits at the workplace.

In addition, one of the adages I adhere to is, “You are what you market yourself as.” So a tip to get into the business market is to market yourself as someone who works in the Business DI Market! This might involve networking with benefits agencies, articles in local publications and websites, or even speaking to business organizations or professional insurance and financial planning associations. If you are seen in your market as an authority—if you bring up the concept to those in your sphere of influence, eventually you will be sought out as someone who can implement a strategy for a sound business DI plan (or even personal DI plan).

If you are already a financial, insurance, or benefits advisor, it is imperative to inform your clients about the existence of products that can help them manage the risk to their portfolios which may include business assets. Contact a DI BGA or DI specialist and have them provide you with training on business products. Start with Business Overhead Expense (BOE) to keep the business running, Disability Buy/Sell to buy out your disabled business partner, Loan Indemnification to pay the bank, and Key Person to pay the business when it loses a key person due to a disability.

Use IDI sales as door openers. Once you have earned the trust of your personal DI clients, those that own businesses will hopefully be more open to seeing the importance of also protecting their businesses with buy/sell, key person, BOE and loan indemnification insurance. You have successfully protected their families, now ask them for the chance to equally protect their businesses.

Many producers are looking for more daytime activity and the business marketplace is the perfect place to start. The DI marketplace needs more producers to discuss disability insurance and cash flow with business owners. The easy way to gain entry is with guarantee issue coverage. This can be through the implementation of a group LTD plan, which only requires two or more employees. In addition, there are specially designed guarantee issue products to supercharge group LTD plans. Business Overhead Expense coverage is also a very easy topic to discuss as well. From this starting point, it will be a normal progression to implement high quality individual protection.

Disability Insurance Awareness Month Planning Panel — April 2019

Q.What special initiatives is your agency/company undertaking to take advantage of Disability Insurance Awareness Month? What do you do to build on your DIAM momentum to help agents perpetuate DI awareness throughout the year?

Our Annual DI Day Conference is held in May during Disability Insurance Awareness Month. We invite carrier representatives and our producers to enjoy a morning of marketing ideas, carrier conversation, and a beneficiary of income protection to bring a real-world experience. Each invitee leaves with valuable information to improve their practice. In the afternoon, we have a “super fun and exciting” golf tournament which raises money for a worthy charity. This year, all proceeds will be donated to Project2Heal, a non-profit organization located just outside Charlotte. Their mission is to breed, nurture, and train Labrador Retrievers to provide heeling for those with physical and emotional challenges.

DI is included in all of our home office schools and training seminars, and our regional sales directors offer DI symposiums across the country. The goal is to help our producers understand the importance of talking about and incorporating income protection solutions into their client’s overall financial plan. In addition to these hands-on seminars, we continually develop new content throughout the other 11 months of the year, often using DIAM as a springboard for new marketing materials, product announcements and technology updates to help our producers facilitate the conversation with their clients.

Each May in conjunction with Disability Insurance Awareness Month we hold a “DI Day” meeting where we will bring in speakers, carrier representatives or even just do a session ourselves where we will often provide CE, sales tips, breaking industry news, etc., to the advisors in attendance. It’s usually very well attended and a lot of fun.

This year we’re having representatives from Thrivent in to give their unique perspective on their target market and their entry in the independent DI space as well as a practice management coach who worked for years as an employee benefit rep for one of our major DI carriers. Should be fun.

We are a “Disability Income Awareness Agency” all year, so our efforts for Disability Insurance Awareness Month aren’t much different compared to any other months —we stress the importance of disability income insurance in a client’s overall financial plan continuously every month of every year we operate. In addition to regular broadcast emails promoting this most important coverage, we provide tools on our website – past webinars and articles, constantly are doing workshops, seminars, webinars and face-to-face training and advising agencies and advisors. We’ll even send out an occasional piece of mail that reminds advisors and agents of our firm being an outlet for their coverages, and a place to seek advice and direction on disability income products.

Q.What suggestions do you have for brokers to help them take advantage of DIAM and engage clients/prospects in the DI discussion?

We focus on recommending continuous conversation with their clients and prospects to discuss income protection at each annual review. Oftentimes there are job and salary changes and therefore potential coverage opportunities. Our DI Day Conference is a great vehicle to reinforce the importance of income protection.

DIAM brings overall awareness to income protection and part of our focus will be on diversification—pursuing opportunities in non-medical markets. We know physicians have historically been more receptive to disability coverage, and while they constitute an important market, there are selling opportunities in other markets such as attorneys, business owners, executives and pharmacists. DIAM is a great opportunity for financial professionals to reflect on their current strategy, assess other target markets in their region and put a plan in place to carry them throughout the year.

If a producer is selling life insurance to a client to replace income in the event they suffer a catastrophic injury or death, what happens if they do survive? Most term insurance is calculated based on a multiple of earnings to determine face amount. Use that conversation to pivot and ask the question: “If you were sick or hurt and couldn’t work, financially would that be a problem?”

Whether it’s DIAM or not, the reality of the opportunity in the DI space is much like the tagline in the old Nike commercials, “Just do it!” Obviously, the advisor must do some backfilling of his or her knowledge about products and definitions in disability income coverages but the amount of resources available these days is extraordinary.

  • First, and I’m prejudiced here, seek out a tenured BGA with direct access to their carriers and/or carrier reps to help with the educational process. Many, like us, who are truly in the DI arena will have ongoing opportunities for workshop training, sales modules, field underwriting and other aspects of marketing, writing and thriving in this space.
  • Look to the Life Happens website, While they have a focus on life insurance and life sales, they do an excellent job at providing an overview of the need for disability income protection. Likewise, they have a very inexpensive “pay to play” module where, for a small fee, advisors get access to marketing materials to take all types of fixed insurance to the street.
  • The International DI Society is also a great resource. In addition to training resources on their website (, they offer a robust annual meeting, and one of my favorite resources—monthly “study group” conference calls where industry leaders talk about timely topics related to the income protection industry. As someone who’s been in the market for three decades, I still pick up a nugget or two on each one of these sessions.
  • Perhaps the best way to learn and understand DI and its workings is to buy it on yourself! It leaves me nonplussed how many advisors we work with do not have any coverage on their own incomes and lifestyles—or it’s woefully out of date. The best way to understand something is to consume it yourself! Buy some or update your inforce coverage!

Q.What advice can you offer brokers who are not DI specialists to make it easier for them to approach their clients about DI?

We provide a “road map” for producers to discuss income protection with their clients and prospects. It is important to discuss “cash flow” issues in case of a disability moment. Planning advice should include three to six months income in the bank (or be easily accessible) and then provide “cash flow protection” from an income protection policy to protect family and/or business from financial adversity. Our producers trust us to provide the best solution for their clients, therefore they do not have to get “into the weeds” comparing multiple proposals. We recommend that our producers ask questions, determine actual needs, discuss tax consequences and present reasonable and affordable solutions. During the process the producer also needs to discuss potential policy issue obstacles.

Disability insurance typically runs one to three percent of a client’s annual salary to protect their income1 and the average long-term disability claim is 2.8 years.2 It’s important to make an appropriate and affordable recommendation but it’s even more important your client have something rather than nothing.

We need to reframe how we discuss disability income; just the word “disability” conjures up very specific images. Instead, talk to your clients about income protection and protecting their financial plan. Most people are more likely to consider and purchase protection coverage for items they deem valuable. How many people have protection plans in place for something as simple as their cell phone or laptop? Your client’s greatest asset is their ability to earn an income, which is the foundation of accomplishing any financial goal. If their income is disrupted and unprotected, it could be catastrophic to their financial goals.

The easiest way for a broker or advisor to approach a client about their disability income needs is to just ask! It’s not that hard! When you think about it, there can only be three answers that client can give:

  1. “I don’t have it.” Well, let’s talk about that! It does not guarantee that a client will purchase, but it’s an exposure that needs to be discussed!
  2. “I have it at work.” I love this one. Fact is, a significant amount of people do have some sort of group LTD coverage as a benefit at work. The follow-up here is: “What does it cover?” Invariably the client won’t know and this allows for the broker to review the benefits book that describes the coverage. For those with modest incomes, it might very well come to pass that the group coverages at work will be the maximum benefits they can get. However, for the higher income earner, very often the group LTD leaves a large gap in their income compared to DI benefits. An individual policy should be used to cover that gap. Often the group disability benefits will not replace a high enough percentage of income for the individual to maintain their lifestyle in the event of a disability.
  3. “I have it already.” This sometimes happens—but not often. Someone has beaten the advisor to the punch and has already addressed their income protection exposure. But, in my experience, all fixed insurances suffer from feeble market penetration–disability income especially! Chances are this will not be a prospect’s response very often.

Q.What techniques can you recommend to brokers to successfully address DI needs in the business market?

There are potentially many business issues—personal protection, Business Overhead Expense needs, Disability Buy-Sell considerations, Key Person protection, and Retirement Security. Are there alimony and child support issues, special needs children support, or other education needs? Are there health issues that need to be addressed?

Determining all the basic business needs will lead to successful and meaningful solutions. The solutions can include guarantee issue group LTD coverage and guarantee issue or individually underwritten income protection to fully protect the business owners and executives. Specialty coverage can be obtained to cover all the needs of the individual or business.

We have found that group LTD is a wonderful entry talking point. This coverage is widely owned and available with varying levels of quality and pricing. Oftentimes, the business purchases this coverage based on a low pricing structure without due process to readily available quality features. A successful professional or business owner will be willing to discuss this coverage to make sure they have “state of the art” coverage at a reasonable price.

The business market offers the chance to have parallel conversations about DI because business owners should be mindful of business protection in addition to personal income protection.

We believe in holistic planning because it’s in the client’s best interest. Our complementary life products can be introduced to address the same needs.

Perhaps just as important, because small businesses often struggle to offer benefits comparable to larger employers, a multi-life DI policy provides them with a way to attract and retain talented employees. In fact, employer-sponsored multi-life programs represent a growing segment of the business, now accounting for more than 40 percent of the DI market according to a recent survey.3

Successful multi-life programs can also lead to robust cross-selling opportunities. Brokers can generate interest with key executives in the business market that otherwise weren’t available to them.

Now more than ever carriers are providing tools and products to protect the exposures of small business owners.

I’ve found that most advisors, if they are discussing DI at all, focus only on a business owner’s personal exposures. However, if that business owner is a big reason revenues are generated by the firm, business overhead (BOE) coverage must be discussed. Individual DI is built to protect the mortgage payment and the grocery bill. BOE can cover the bookkeeping, staff salaries, even insurance payments in the event that a business owner gets sick or hurt and can’t work.

At my brokerage general agency we see buy-sells funded by life insurance on a regular basis. But we seldom see the buy-sell protected by a disability buyout plan. Functioning like life insurance does in the event of an untimely death of a partner or shareholder, DI Buyout provides funds for a purchase of stock if a partner or shareholder becomes disabled. DI Buyout coverage should be discussed when the talk turns to business succession planning and transition.

Those coverages have been in the market for years, however, recently policies have been developed that also address other exposures that a small business has:

  • Business Loan Protection—as the name suggests, simply, it allows for a debt obligation on a loan to continue to be paid down if the business owner gets disabled. Have a business owner who’s expanding his business? Purchasing a building? This is a coverage he needs to know about.
  • Key Person DI—again, running parallel with the staid life insurance offering of key person life insurance, this coverage indemnifies a company should an employee who’s a vital cog in the firm’s operations and revenues gets disabled.

The blatant reality of these coverages is that the advisor probably already has small business clients he’s worked with for similar exposures in the event of a death. It should be an easy conversation to have with those who’ve already understood the need for insurance.

1., 2019.
2. Council for Disability Awareness, 2019.
3. 2017 Annual Survey of the U.S. Individual Disability Income Insurance Market.

Disability Insurance Awareness Month Planning Panel

Q: What special initiatives is your agency/company undertaking to take advantage of Disability Insurance Awareness Month? What do you do to build on your DIAM momentum to help agents perpetuate DI awareness throughout the year?

Income protection is promoted to our producers 24/7/365. During Disability Insurance Awareness Month, our agency holds an exciting day of learning and reward achievement at our DI Day. Each year at DI Day, we provide different agendas for our producers to keep knowledge and industry trends up to date. Solutions based discussions create innovation and presentations of real world examples of the value of disability insurance, such as “It happened to me.” Our carriers send top executives to support DI Day as well as participate in carrier panels. Panels of producers share sales ideas and presentation methods to provide easy and successful ways to present income protection coverage. After lunch, there is a “fun” golf tournament with prizes and a donation to a worthy charity.

This year we are doing something different. Rather than sponsoring a big DI Day, we are launching a series of small regional/office DI Days. The big seminar with speakers is very effective in some locales, but we have not found it to be beneficial for us. Nor have we found it keeps the interest going no matter how excited brokers are leaving the meeting. The problem we have found with the large annual meeting is that sales come from habitual behavior and habitual behavior is not created in a once a year rah-rah meeting. So we are bringing DIAM into our brokers’ offices. We are holding a series of smaller meetings during DIAM and then establishing ongoing one hour training sessions on a monthly or quarterly basis. This way we can help our brokers develop the habit of asking the right questions to identify the problems that are solved by DI. We help them identify problems and sell solutions.

We try and remind insurance professionals that each year DIAM highlights the need for income protection to the public through numerous tools and outlets. It is an awareness, not a sales strategy. However, it is this increased awareness that makes it prime time to focus on marketing and talking to clients about the need for income protection for both personal and business needs.

The biggest initiative we undertake for DI Awareness month is our DI Day event along with our partner agencies in the Plus Group around the country.

Truth be told we usually don’t make it a whole day, so perhaps we should label it our “DI Morning.” For three or four hours we’ll do presentations on the products that make up the DI marketplace, and have sales sessions to help advisors with ideas and tips to sell more DI to their clients and introduce it to their practices. Very often we’ll attach Continuing Education credits to the advisors as well.

This year, our event is tentatively set at our go-to venue for our DI Days, The Rivers Casino in downtown Pittsburgh on May 22. The Casino offers beautiful meeting rooms. At our first DI Day years ago, an advisor won $800 in the casino after the event! That’s a sure way to get a repeat attendee! Although we are trying to raise awareness for disability insurance, we still try and make the day as fun as possible for anyone who attends. That’s why organizers do usually try and plan a casino event afterward. Before this next event, some guests may want to take some time to brush up on their casino skills by looking into this mega888 download. This should ensure that people stand a better chance of winning. If people want more of a variety with their online casino playing, they can look to other sites that may have what they are looking for, for example, they may want to play on 918kaya apk, or similar, to brush up on their skills, whichever one they choose as long as they play responsibly they’ll have a lot of fun. Just make sure to check how highly any online casino is rated before you start using it – the best way to do this is to head over to and read some reviews. Alternatively, they could conduct a direct search using specific phrases to find the best sites to play gambling games. If a person wishes to try his or her luck at Ripple casinos, websites such as Crypto Snack may be of assistance by recommending the best ripple casino sites available online.

For us DI Awareness doesn’t only occur in May. We are constantly offering training events and opportunities during the year. We have ongoing meetings, webinars, and broadcast emails that provide advisors the opportunity to learn about DI. Our meetings take the form of what I call our “Big Hotel Meetings in the Sky” where we’ll rent a room at a hotel and bring in an industry speaker or company rep to talk DI. We hope to get 50 or so brokers to one of those events.

We also have geographically oriented “DI hand-to-hand Combat Sessions” where we’ll do smaller, more intimate meetings in handy locales, with the intent of getting 5-10 advisors in attendance. These are more intimate sessions where we’ll peel apart products and provide ideas as to how to sell this stuff.

And, of course, we’re old fashioned. We still meet with brokers to provide training in their offices to themselves and their staff-often with CE just for them.

For us there is no “DI Awareness Month” it’s more like the “DI Awareness Continuum.”

We participate in many of our general agencies’ DI Days providing presentations on the importance of disability and awareness of the products available to clients who are not able to obtain disability in the standard market. We also provide webinars throughout DIAM to educate agents who are not aware of the high risk products that are available and how to capitalize on the declined cases they may have received.

This year we are doing more agency meetings, road shows, individual sit downs, presentations to local financial associations, study groups, etc. We are more visible than ever, just in different capacities. We will continue to educate going forward.

During DIAM we will utilize different tag lines on emails and correspondence. We will send out more marketing emails to our brokers discussing DIAM, and offering sales tips, marketing facts, and bringing them up to speed on the resources that are available.

What suggestions do you have for brokers to help them take advantage of DIAM and engage clients/prospects in the DI discussion?
Innovation and unique sales ideas and products provide opportunities for our producers to engage their prospects in the DI discussion. This includes individual as well as business solutions.
They need to become a believer in protecting their client’s income. In order to become a believer they have to understand the magnitude of the problem that exists when one is sick or hurt and cannot work and be able to convey that information to their clients. They need to be willing to talk about income protection-which should be part of the conversation with all their clients that are still in the income earning years. So, this should not be a once a year emphasis but part of every client interaction. If a broker is not comfortable talking about income protection with their client, and passionate about the extreme need to cover this risk, then they won’t sell it. But more important, they are leaving a major risk to their client unaddressed. The increased attention that will be given to income protection during DIAM in most industry periodicals, like Broker World and others, will provide a lot of extra education and sales ideas. They need to take advantage of this and take it to heart.
First, Life Happens and the Council for Disability Awareness have incredible tools for producers to tap into. These sources are printed, electronic and in video formats. Most of them are even free! Look at these websites. They can be found via google search or through many websites who link to them, such as our own website at Second, talk to your clients. There is no need for a pressure sale, just a reminder of the “what happens when income stops.” Lastly, take advantage of May and June to promote disability insurance since the public campaign is going full tilt throughout May. People are in tune and open to the discussion!
My mantra on the subject of increasing DI sales is-just ask! The unfortunate fact is that this market is not highly penetrated. Chances are that just asking a client or prospect, “What planning have you done to protect your income?” will lead to further conversation and discussion about the subject.
Now that’s where we come in. We have more than enough resources to help out the broker as he works the paycheck protection market. We have three models of engagement:
  • Traditional Wholesale Brokerage: Just like we’ve always done, we provide the advisor with support, quotes, advice and materials to close the sale. We guide, the broker decides how to best present to his or her client and solely engages the client on his own.
  • Concierge Service: We have found that many brokers just don’t want to “go it alone.” They’re uncomfortable with the product, the market-and very often the client! So we’ll provide point-of-sale support, quarterbacking the interface with the client and presenting the DI concept for the broker.

    While there are some “DI Specialists” out there, I’ve found that-rightly or wrongly-there is discomfort in exposing their client to another broker. The old “Fox in the Henhouse” concern. We’re a trusted, credible third party who will not try to “steal a client” from an advisor. It’s not what we do.

  • Our third model is “Pure DI Partnership.” Many times we’re finding advisors-especially in investment firms and property/casualty shops-just don’t want to fool with something outside of their realm of expertise. They refer their clients to us for us to handle their DI needs. This, frankly, has been a transition for me as I’m an old-guard BGA who has never really attacked the market this way. But it’s apparent that this is a model that some of our firms and advisors desire.
Hosting webinars and DI Days is a great time to take advantage of DIAM by presenting as much information and training as possible to agents regarding making DI sales.
Tax season is always a great time to bring up the subject of DI, especially during an annual and/or monthly portfolio review.
We encourage our brokers/agents to own the DI on themselves, and we will specifically be discussing that fact during DIAM. We encourage brokers to have the “what if” conversation with their clients when they are delivering other financial solutions (life, annuities, LTCI, etc.), especially if their client has just gone through medical underwriting and they have gotten the green light on their health.
What advice can you offer brokers who are not DI specialists to make it easier for them to approach their clients about DI?
To help our inexperienced producers, we created a simple yet effective training module to help open the income protection conversation during or after the life insurance discussion. By discussing income protection in the same terms as life insurance, it has made it easier to transition from one product to another. It is important to note that this simple approach allows us to tailor the appropriate coverage at an affordable pricing structure. This helps the producer from getting “into the weeds” and feeling uncomfortable.
K. I. S. Keep It Simple! Income protection is not a complicated issue. The broker has to make the client aware of the problem and the basics of the solution. The problem is that if his income stops, how does he survive? If the client is working to pay the bills and fund financial plans, what happens to the bills and the plans if the paychecks stop? We are all one heartbeat, one auto accident, one major sickness away from a stopped paycheck. If that happens it impacts everyone that depends on them. What is the plan? The solution being that income protection policies replace a portion of their income if, due to injury or illness, their paycheck stops. Keep it at the Big Picture level. Brokers can rely on MGA’s like my office to help them with the details and to find the correct product from the correct carrier once they have educated the client on the importance of protecting his income and cultivated a desire to solve the problem. They don’t have to, nor should they, try to get into the detailed mechanics of the product until they have educated the client on the importance of protecting their income. Identify the problem and tell them there is a solution.
Talk to your clients! You are the financial expert. They have called you for advice, so advise them! If you sell life insurance, you usually speak in terms of income replacement due to death. Income for keeping the home, business or family intact. What if you don’t die? It’s the same story, just a different product. If you sell medical insurance, the reasons usually fall into the category of need because of the high cost of getting well. It is an income story! Isn’t this the same need for income protection? Just talk to them. They can decide if it is time to buy or not, but if they don’t know about the products available, the options they have, or the need, then they can never get a chance to buy!
To coin the old Nike tagline, the best advice I can give is, “Just Do It.” We have your back in any of the ways described in question number two.
The life and DI conversations go hand in hand. Essentially, any conversation pertaining to retirement vehicles can open the door to the subject of DI. Once the initial conversation has taken place, open the discussion for DI by asking the client, “How would you pay for these products if you became disabled?” The agent should present statistics for disability to the client indicating that one in four Americans will become disabled before retirement. Encourage any producer with a challenging case to reach out to a disability insurance specialist in order to discuss the various nonstandard tools that are readily available for their clients to utilize.
We continue to communicate to brokers that we are their income protection department. They do not need to be DI experts, that is why we are here. DI is outta sight, outta mind-if we are not in front of the agent they are selling something else.
What techniques can you recommend to brokers to successfully address DI needs in the business market?
There is incredible potential in the business market. An easy starting point with the business owner is having a discussion surrounding a Group LTD plan. Although many businesses provide this coverage, plan design and quality provisions are oftentimes inadequate. With Group LTD as a starting point, it is then easy to identify potential additional needs, such as guarantee standard issue individual plans to cover additional income, Business Overhead Expense insurance, Key Person, Buy-Sell, Pension.
Ask Questions! Ask questions. Did I say ask questions? By asking questions, it transforms the conversation from you trying to sell something to you being a trusted advisor solving a problem your client has. The transition to addressing income protection for a life client, a health insurance client, a financial planning client or any other client is all similar. Additionally, I would suggest that the transition is very simple and easy. After the life sale, it is as simple as asking, “What happens if you don’t die?” After the health sale it can be as simple as, “Now that we have the doctors and hospital paid if you are injured or sick, who is going to pay you?” After the financial plan is funded, “What happens if you get hurt or sick-what happens to this plan?” What is the plan if their paycheck stops? For most people all of their security and dreams for the future come from their paycheck. Once the client understands and acknowledges that fact, it is not hard to get them to want to protect it against disability. It is similar for business owners, but the key is that once you get them to see the importance of protecting their own income, you need to get them to understand they have two incomes to protect. Their business income is just as much at risk if they can’t work. So, ask questions: “Mr. Business owner, if you could not work for a period of time, would your business survive until you got back on your feet?” “Does your business have enough cash flow to sustain itself if you are out for six months or a year?” “Would your employees stay?” “Would you be forced to fire sale your business or worse?” The same risk management issues exist for businesses that exist for an individual plus some. Brokers need to view themselves as problem solvers for their business owner clients. They are advising on the risks and exposures the owner faces and recommending solutions to minimize that exposure.
Again, talk to your client! Business tune ups are important. At least once a year an insurance advisor should be looking at existing coverage and counseling a business client on the need for more, different or changes to insurance protection. If the focus has always been on life insurance, the conversation is simple-“I am so glad you have the life insurance to cover the xxx (buy-sell, keyperson, bank loan, etc.). Have you ever stopped and considered what you would do financially if there was a disability involved? You would have the same financial obligations, but without disability insurance in place you would have to self-fund these obligations. For a few dollars we can cover that exposure too!
Business Overhead Expense coverage is a woefully undersold product.
Encourage any producer with a challenging case to reach out to a disability insurance specialist in order to discuss the various nonstandard tools that are readily available for their clients to utilize.
Extend options past the standard carrier when necessary. Through collaborative efforts, nonstandard carriers may be able to offer viable asset protection. Nonstandard carriers have the ability to use creative solutions to safeguard residual income in order to maintain the lifestyle clients have worked diligently to achieve.
We encourage agents to have the conversation with their clients, “If you were sick or hurt and could not work, what would you like to provide for yourself and your family, and what would you want to happen with your business and to your employees?”

DI Forum

Question: What challenges do you see in the DI market for the coming year?

The challenges we face are not just in the coming year but extend into the future as well. We have to motivate  advisors to teach their clients the importance of protecting their greatest asset—their income.  A long term disability is devastating to not only afflicted but their family as well.

Another challenge that we are faced with is educating our advisors that disability income policies are underwritten differently than life insurance policies.  Disability policies are often issued with exclusion riders which exclude certain conditions.  This is the nature of the beast.  Advisors need to understand this and be able to explain it to their clients in a positive presentation so that their clients accept the rider knowing that there are a multitude of other medical conditions for which they will be covered.

I find another challenge is exposing the advisors to all the potential clients whose occupation is  not just in the medical market. Tradespeople, salespeople, business owners, etc., need to protect their incomes just as much as the professionals.  When the paycheck stops, everyone’s savings disappears.

My challenge is to educate our advisors that high income clients who have employer-paid group coverage may need individual disability income protection to supplement their group coverage.  This is a situation that many advisors walk away from. 

The only challenge is getting agents and advisors to recognize the importance of presenting income protection solutions. Advisors just do not understand the risk until they have a client disabled. There are some very disabling viruses, illnesses and accidents that occur daily. I know of claims where the claimant is collecting on both a disability and long term care insurance policy at the same time. That should be “Priority One” for an advisor, to make sure their clients will have an income whether they can work or not. Promoting the importance of disability insurance will put advisors in front of high income clients and lead to more life insurance sales and other sales of financial products.

More carriers, more options! This sounds good, and it really is, but it also adds more to the frustration which some producers feel about which carrier and which options for which client!

A shortage of trained life and disability insurance salespeople.

Baby boomers are getting toward the end of their DI purchasing lives.

Millennials prefer to buy online, which is great when buying a toaster, but maybe not the best option for buying DI. DI needs to be sold. There needs to be education and conversation. 

One of the biggest challenges will be the sheer lack of carriers in the market.   Quietly, the number of carriers available to the independent producer has shrunk.    There simply aren’t many carriers to access.   I suppose one could spin that to a positive—there aren’t many carriers to learn! 

In addition, the upcoming year brings the age-old challenge in that it is a market dominated by “dabblers.”   Far too many producers are “one hit wonders.”   They’ll sell one or two, and that will be it.   It’s a market where sales are far too reactionary (client asking for it, or starting the conversation) and far too few that are done in a strategic manner quarterbacked  by producers.  



Question: What opportunities do you see that could/should attract producers to DI sales?

The opportunity to attract advisors to sell disability income protection abounds.  Everyone is selling life insurance and very few are selling disability income protection.  There is very little competition in this arena. If only the advisors would ask their clients how long they can survive without a paycheck, they will see the look of interest and potential for a sale.  

When an advisor opens the disability income protection door, he/she will be amazed at the array of policies that the companies offer: A policy to fund a disability buyout, a policy to pay overhead expenses, and a rider to pay a business loan are but a few examples of what is available.

Some of our best sales have been funding a disability buy/sell agreement.  By asking the question, “If one of the owners were to become disabled, do you have a buy/sell agreement?”  This one question should create enough interest to explore this policy. I believe that this policy is one of the best kept secrets.

First, just the desire to help and to do what is best for your client. Many clients are relatives, friends, community leaders and business associates; how would the advisor feel if one of them became disabled and the advisor never brought up the need for disability insurance? Second, income! The commissions and vested renewals that an agent can earn selling disability insurance are unmatched by any other insurance product. Third, referrals. Once you sell a disability policy you have a reason to talk to other business associates or people who work at the same job or in the same profession about income protection. 

The same as my last answer—More carriers, more options! This means the value of the brokerage outlets becomes even higher! Brokerage outlets and new products are making the selling and administration of disability insurance easier than ever. GSI is having a record year by all carriers. Excess GSI is through the roof! Business DI programs are the most liberal and easier to use than ever before.

A more streamlined underwriting process. Easy access to medical information and financial documentation would generate tons of new business. In the meantime, lots of great true stories of satisfied claimants. This would be immensely helpful in our endeavors to get people to think about the need, and eventually realize income protection can be the best solution to eliminate some of the risk to their loved ones and/or business partners.

A major reality of the DI market that should attract producers to it is that few are in it!  Competition is unusual except in the most developed market space (e.g. medical, high-income).   

Carriers are poised with an abundance of marketing materials and support for those who want to engage.  Brainsharks, pre-approach letters, seminars, mailers, email templates and the like  abound on every carrier’s website.   I don’t recall a time in my career when there have been more resources available for the informed producer to approach this market in a strategic, professional way.  Use them!

Another attraction to this market for brokers is that it can support and lead to other sales in other insurance and investments.      Gain an understanding of the client’s income, and it should  lead to conversations on life insurance and investments.   Have other product lines in-force and it will provide funding to perhaps maintain the insurance and investments that are already in place. 

Likewise, as a client’s income increases—and it will, sometimes substantially—so too will the opportunity to provide additional coverage by way of a new sale or exercising a “future purchase option” on their existing plan. 

Finally, another reality of the DI market is the “R” word.  Renewals.  For the most part, the more premium one does, the higher the renewals earned.   It is great way to build meaningful recurring revenue in an agent’s practice.  


Question: What is your view of agent responsibility to present DI and what consequences, if any, do you see affecting agents who continue to avoid this market?


I believe that it is an advisor’s responsibility to offer disability income protection to all of his/her clients.  An advisor never wants to get a phone call from their client’s spouse with the news that their client has suffered a stroke. The spouse wants you to put in a claim for benefits for the disability. The advisor has three responses that he can make:

1). I am so sorry to get this sad news.  I will report the claim to the company and when you are ready we will review the policy; Or, 

2). I am so sorry to get this sad news. However, your spouse and I never discussed a disability income policy; Or, 

3). I am so sorry to get this sad news.  When your spouse and I discussed disability income protection, your spouse was not interested in purchasing this coverage and, yes, there is a signed form in the file with his/her signature stating that he/she was not interested in pursuing disability income protection.

If I had an advisor that I relied on for financial advice, products and protection, and then I became disabled and had no disability insurance, I would be extremely upset—especially when I learned that income protection insurance was available to me and my advisor never suggested it. I believe that the advisor should be morally, ethically and possibly legally liable to present income protection insurance. The financial and emotional consequences are so great that advisors should have clients sign waivers that they have been shown the need for disability and long term care insurance and they chose not to purchase.

While there is no legal obligation for a producer to talk about disability insurance, there should be a personal sense of responsibility (moral, ethical, emotional, or whatever you wish to call it) to tell clients about disability insurance. This is coming from a guy whose grandfather literally lost the family farm due to a back injury. This is also coming from a guy who has had two bouts of severe disability mishaps inside my immediate family. The first time, the absence of disability forced the liquidation of a small business. The second time, having disability insurance allowed us to keep the family home!

The consequence of this? Lost sales to the producer and underserved clients! 

By the way, if my grandfather did not lose the farm, my fathers “calling” into the disability insurance world in 1948 might not have ever happened! 

As I observe the aging of the salesforce, I also observe an aging of their client base. A recent inquiry was from an agent whose client was interested in DI for her grown children; both children earning six figure incomes. Many of our agents haven’t had a young client in a long time. The agent is focused on old retired and semiretired clients and their investment portfolios. Unfortunately, many new, seemingly captive advisors are focusing on investment portfolios exclusively as well. Maybe someday some advisor will be sued for not protecting an income, but it hasn’t happened or we would make a big deal out of it, like Chisolm Ice Cream.

My view is professional agents need to understand they have clients—not customers.   Walmart has customers.   Much like due care is expected from a doctor by his patients, producers must recognize the obligation of due care to these clients.   

My observation has been that the quality agent is not on a sales call, he’s on a mission.  A mission to make sure that, should the worst case scenario occur, his clients are properly protected within the context of their budgets, needs and goals.  

Imagine having a client becoming disabled, having their income compromised, and the subject of income protection had never been broached. What view of the planner would the disabled client have, let alone the guilt feelings the advisor might have? 

Agents need to save themselves from these uncomfortable possibilities by discussing the need for DI with all of their clients and prospects.



Question: What tips do you have for agents to find success selling DI?

My tip is for advisors is to have an organization behind him/her that is knowledgeable in disability income protection, holds regular teaching classes in disability income protection and keeps their advisors up to date on changes in the market place.  It is also important for advisors to have an organization that can teach advisors how to sell disability income protection.  An advisor needs an organization that can steer him/her through the entire process from taking the application through the placement of disability income protection policies.  Advisors need an organization that has staff that is always available to them and dedicated to their success in selling disability income protection.

Bring it up time and time again. Bring it up to the right people, those with high incomes. Everyone needs disability insurance and there are products for all incomes. Have the income protection discussion with everyone. If people say that they are covered at work, let them know that they just have half a plan at work and that they still need a supplemental plan.

Every client is a potential sale! Executives and professionals? No problem! Blue collar and gray collar workers? No problem! Athletes, pilots and entertainers? No problem! Also, if you have an established block of business of any sort (life, medical, etc.) you already have DI sales leads! One thing I hear often is, “Where do I find clients?” Existing clients from other sources of sales is a built-in lead system. Just talk to them! It sounds too easy, and it is, but it is amazing how many times I see a producer try to make it difficult.

In CA, State DI can pay $5000 per month ($1,173/week maximum). Look for people who do not have State DI, or those who earn substantially more than the limit. It helps if they are married and/or have children. The best prospect has L.O.V.E. (Love, and/or Obligation, and Verifiable Earnings). It is easier to motivate these people, and the premiums are bigger so you will earn more per case. 

Our top producers get their leads and referrals as members of the Chamber of Commerce, Rotary, Elks, Lions, and Networking groups. They are writing books, and teaching classes and volunteering in the communities where they live and work helping others. 

This isn’t that difficult:  Just ask about the client’s current income protection.   It is easily integrated into any fact finder or in-force policy review done for other product lines.   It is a product line that is one of the least commoditized purchases in the fixed insurance markets.   A client needs to be told about the opportunity to protect their most valuable resource—their earnings.   Bringing up the subject in a consistent, methodical way is bound to have positive results.

Life BGA Panel

What products does your agency offer and what suggestions do you have for producers to further protect their clients’ financial well being beyond life products?

We present ourselves as a full service insurance brokerage agency serving financial services professionals using a  product lineup that  consists of life, annuity, long term care, and disability income protection plans from the major carriers in the industry. Our staff has more than 150 years of experience collectively and we offer, in addition to competitive products from financially sound insurance companies, a commitment to the financial services industry, the people involved in the industry and the people they serve, to bring the best possible carriers, products and solutions for the need at hand. The client’s best interest is first and foremost the most important thing for Benefits Brokerage Agency, Inc. as we engage in the business of brokerage. We feel it is important to work with agents that think and act along those same lines.

Consolidated Insured Benefits, Inc., offers whole life, indexed UL, term life and a complete suite of medical products.  It’s our opinion that whenever possible all life products sold should include living benefits, chronic condition and critical illness.  Life products sold with living benefits do not increase the cost of the coverage and allow for the death benefit to be accessed while the insured is living.  

We are seeing a trend towards the hybrid life with LTC or CI type riders. The trend is important as we are seeing a shift towards this marketplace. The challenge for the consumer and broker is information overload–there is a lot of product out there!      Many times a deeper analysis of your client is needed to get to the right suite of products. We have trained our brokerage consultants to work with brokers to help them understand the various suites of products and clear through the clutter.

Like most BGAs we offer life insurance.  It’s been a mainstay of ours for ages.  However, we’re probably more diverse in our “front-line” product offerings than many BGAs.   We also offer disability income products; long term care insurance; fixed annuities; and non-health insurance group products: life, STD, LTD, dental.   We’ve also started ramping up our efforts in the worksite life arena. 

When I was young in this business I took for granted that this was the “way things were” in BGA product offerings.   We’ve always offered more than just “cheap term and impaired risk” life products and I thought everyone in our space did.     The multiple product lines allow us to open doors that would remain locked if we were otherwise only a life agency.   We respect relationships that brokers might have with other agencies, but if a broker has a great relationship with another BGA for life products, that’s fine–use us for fixed annuities or DI. Just like a consumer might do the bulk of his grocery shopping at one supermarket, but just loves the corner bakery–we’re fine with a broker getting his French pastries through us while he gets his eggs and milk somewhere else so to speak. 

For those who want to use us as their “primary grocery store” we’ve got the milk and eggs, as well as those French pastries, a great butcher shop, and the freshest produce.  The proverbial “one stop shop” at play.

Likewise, in some unexplainable way it seems there’s a buoyancy to our revenues–if one product line starts to stumble, we’ve seemingly always experienced the dynamic that another fills in that drop off.  And, overall, we’ve been fortunate that  our diversity has led to slow but steady topline growth.  

In a similar fashion I think that’s why a broker should not just be a “life insurance agent”–clients need to consider multiple insurance products and the people they refer an agent to might need a product beyond life insurance.   

Our model has adjusted to this very recognition–not only by life insurance agents, but by benefits producers, property-casualty agents, and investment advisors.   They are looking for education, training and often outright partnership or point-of-sale help in lines outside of their area of comfort.  We are there as a credible and trusted source to help expand their practice beyond their core business and diversify their revenue stream. 

The collection of products we offer is intended to encourage agents to protect their clients beyond the scope of life insurance. Our fundamental product lines include individual life insurance, long term care, disability income, critical illness and annuities. To accompany life insurance coverage, we offer long term care and critical illness riders. Pensions and life settlements are also available.

Our group product line includes life insurance / AD&D, dental, vision, long term disability and short term disability.

We recommend formulating a diverse portfolio of products to promote security for all stages of life; to help cover unexpected accidents or illness, to be prepared with income for retirement, and to support loved ones in the event of death. By doing so, not only will agents provide a more secure future for their clients, they also strengthen their relationship with them.

Much of the traditional training and education of agents has either evaporated or shifted.  What does your agency do to fill this gap and where would you steer agents to find necessary training and education?

The level of new agent recruiting and training that was the norm in 1973 for me is almost nonexistent today. In order to separate our agency from others we focus on the “value added” every chance we have with a broker or client in a joint call situation. The extra time spent discussing with the broker the recommendation we are making has proven to be invaluable, as has the offer to participate in the face-to-face interview with the client to assist in making the meeting successful. Helping the broker in other ways includes utilizing the partner carriers’ vast supplies of information with broker meetings and WebEx training meetings to enhance agent understanding or provide training that they are not getting on their own.

At CIB, Inc., we offer extensive concept training.  Concept selling is a much better platform to communicate with potential clients.  Selling from the concept platform allows clients to see life insurance as a solution rather than as a product.  If you ask 10 people if they want to buy life insurance, nine will say no.  One will say yes because he is about to need it.  Selling from a concept like tax-free retirement or college planning allows clients to view the benefits and rewards of the life insurance contract as positives and not view life insurance from the stereotypical negative perspective.

Brokers need to take the time to expand their education and knowledge of not only the products, but the underwriting programs and the advanced technology that is available in the marketplace. There is “product” and then there is “process.” Today’s modern insurance broker needs to understand both to move ahead. There may be very little difference in product and a huge difference in process–and that edge can win you a case. Then again, you don’t want to sacrifice products of better value for just an easier process. There’s a fine line and our brokerage consultants are trained to help brokers identify both areas. We teach and run programs daily.  We are very consumer driven and attract brokers that are like minded.

We offer many educational opportunities for agents and brokers.  We market many carrier or marketing group webinars and presentations.  We direct brokers digitally to the endless array of training resources on carrier websites and industry websites. But we’ve taken more of a back-to-the-future approach after feeling many of these methods have fallen short:  we see brokers.  We call brokers.  We have face-to-face meetings and workshops with brokers to provide information, product training and education.  

There’s a manic chase for the millennials in our space–and every consumer space that’s out there.  I get it.   But I think too often an agency or broker assumes that their  current constituents are those that will consume the trendy opportunities that are out there.   We’re constantly bombarded by the fact that the average age of an independent producer is in his/her 50s.   We can bemoan the fact that our future is bleak and we can wring our hands that the industry is not reaching younger consumers, but while we’re angsting away, we’ve got to make a living.  We need to provide training and educational opportunities to the constituents who are here right now.  

While those 50-somethings (like me!) have come light years in their understanding and grasp of digital opportunities, for the time being the old fashioned way is the way most want to be interacted with in my opinion.  Don’t get me wrong, even the most primitive of agent or consumer is “jiggy” with current technology and it is a fact that more and more education and training is moving to a digital platform.   It will, someday, be all-digital, all-the-time.  But for now, I think the time tested methods of educating, training and marketing to an agent, or them marketing to a consumer, hold true.  

Plowing through with accepted methods to one’s constituents while laying the groundwork, understanding systems and knowledge is the trick.   I think we’re doing a good job with that. 

While we continue to organize webinars and seminars for agents to learn about specific products or processes, our emphasis is on a personal, hands-on approach. Whether over the phone or face-to-face, we consistently coach them every step of the way. We recommend prospecting methods and provide customized materials, teach them sales ideas and how to recognize cross-selling opportunities, walk them through contracting and application processes, and hold their hand through underwriting. At the core, we provide a complete backroom support system.

Underperforming or soon-to-lapse policies can have major consequences for consumers and their financial planning goals. How important, structured and persistent are your agency’s policy review initiatives?  What advice would you offer brokers?
Financial services products are critical to a client and his family or business. At times they require a rather large financial commitment to pay the premiums needed to maintain the products. With that in mind, it is extremely important that the client knows how his solution is performing, that it will do the job it was intended to do and that the value for the premiums paid remains. The client depends on professional advice from the advisor to know that the plan is strong. The client would likely have little idea of the internal impact on a life policy that has endured the most recent extended economy of low interest rate return. With a policy review, the client can be informed about the financial condition of his policy and, at the same time, determine if his current needs are being met or if they have changed altogether. My advice would be for the broker to call one existing policyholder per week and set an appoint to do a policy review on existing plans and discuss, with the age appropriate client, that long term care is likely in their future and that maybe the appropriate solution is a new plan with a long term care rider that provides either death benefit or a long term care pool of money if needed. How would the client know unless his insurance person called to ask for the appointment to tell him?

Life insurance solutions are often only as good as the person that designed them and their annual review to determine if they are on track to achieve the goal of the design.  CIB offers a review and evaluation not just of the products we place, but of any contract a producer may encounter when interacting with clients.  Simply offering to all clients with whom a producer may interact a policy review of all inforce contracts can create new business or solidify a producers professional relationship with current and prospective clients.

Brokers need to go through their block of business and sign up for the insurance company websites in order to monitor their business. Some companies even have monitoring programs that can help a broker better manage their business. While not every company has these set up yet, many do have programs–and some have programs that can even email important notices directly to the broker. The majority of companies are not physically mailing out copies of late notices and other policy owner notices that are sent to the consumer.  In the past copies of these notices were sent out, but now they are being posted online for the broker to retrieve. The broker needs to manage their block of business, monitor the status, track conversion dates, and have re-illustrations run on a fairly consistent basis. If I was a retail broker today, I would be sure to set up a tracking system to include, but not limited to:  Term insurance expiration dates of the guaranteed level premium; term conversion dates; and policy dates of UL policies so that  re-illustrations can be ordered.

We try to alert brokers of pending in-force policy issues.  It is a very difficult task to maintain.  We will talk to a broker on an inforce client that has a term policy expiring or a permanent policy starting to lapse, but it is a herculean task.  Especially given the complexity and inconsistency of policyholder’s service notifications across the carriers and industry.   
My advice to brokers is to recognize their obligation to their clients to keep an eye on things. Meet with clients regularly.  Call them. Make sure their situation hasn’t changed–if it has there might be an additional sales opportunity!  But most of all make sure they remember what they bought, determine whether the funding level is appropriate for the policy’s current status, and be a resource for any questions or changes they might consider.  These are “clients” not “customers”.
We strongly promote the importance of life insurance reviews and provide agents with a kit of custom materials to encourage them to incorporate them into their practices. In addition, we personally contact the agent when their client’s policy is going to expire in six months. When applicable, we suggest options and alternatives to continue their clients’ coverage, giving them the opportunity to preserve the security of their clients’ financial plan, and again strengthening the relationship with them.
Lower and middle income consumers, particularly those “just starting out”, have the need for life insurance protection but often can only budget for term insurance.  What encouragement can you give producers to still reach out to fulfill these needs, and what suggestions can you offer to make term sales profitable?
With premature death  protection  being so important to  young families, and cash flows being tight as they often are, the cost effective delivery of term plans starts a lifelong client relationship for the broker. Brokers should partner with an agency that is embracing the latest technology that carriers are offering that allows the transaction be handled in a cost effective way. Policy application, underwriting, and policy delivery can be handled via online technology. Quick turnaround time, complete and accurate application processes and prompt policy delivery can make a small premium plan of protection become profitable for everyone involved. And most important–provide a tax-free death benefit to a grieving family that might have lost a mom or dad.
Concepts!  Even in the face of a term-only sale.  Show your client a concept that may apply to them even though they are not in a position to purchase at the current time.  For example:  A new business owner is concerned with his retirement.  Show him or her how to generate tax-free retirement.  Explain that you understand that he is not in a position to execute this plan today, but you have provided a term product that will enable him to execute that plan without underwriting through conversion at almost any time in the future.  This means that a quality term product must be used offering full conversion to any of the carrier’s permanent plans of coverage.
Regardless of how small or large the premium or face amount, there is a beneficiary on the other side of the policy.  This is why we are in the insurance business. We need to help the consumer, regardless of how small the policy, to protect what’s most important to them.   When a broker follows a principle of helping and serving the client, good things will follow.  The “just starting out” consumer of today is the future of the business tomorrow–and if not them, perhaps their neighbor or the other referrals that come from providing incredible service regardless of premium. If you have the opportunity to make that personal connection, grab it!  In today’s world the ability to connect on a one-to-one, face-to-face basis has become more and more rare.   
As with anything in marketing, it’s a marathon not a sprint.    Producers should recognize these are not just clients for life insurance, they are clients for life. Term insurance is a viable, practical tool for a young consumer.   But life changes may dictate a change in product structure, a consideration of a product in a different product line, or at least additional term insurance sales!  
Communication is the key, and I see an alarming amount of brokers who lose touch with their clients. It may be something as simple as a note on policy anniversary date to a full blown face-to-face policy review.  
The age old sales adage of “see the people” can be morphed into a modern day adage “be seen by the people.” I am a fan of producer’s engagement on social media to allow their clients (and prospects) to see them.   Periodic emails, websites, even activity in some of the social media opportunities constantly reinforce the message that “You’re my client and I’m here to help.” The fact is that the cost of such digital efforts is minimal which is an added bonus. 
Life insurance agents must realize the importance of building relationships with their clients. If a client’s finances are tight, term insurance is a good place to start. It’s easy, inexpensive, and non-invasive—now that drop-ticket platforms are available. It provides them with a basic layer of protection. And, this is where life insurance reviews come in! Stay in touch with clients. Review their coverage and situation periodically and adjust as needed.
Impaired risk business is widely considered the foundation on which today’s life brokerage business was built.  What experience can you share with brokers to help them best serve the “special risk” client?

Last but not least, instead of a broker walking away from a prospect that has a negative health history, build issue or other formally rated policy concern, do some “field underwriting”.  Brokers should ask questions to find out all they can, bring those issues to the brokerage agency and ask them to help the client with his coverage needs. The more information a BGA has to work with, the better the chances a coverage plan design can be worked up by the agency that can fit within the client’s budget. That is serving the client well by going the extra mile. Not every client is 35 and preferred plus.  
In the past there were carriers that focused on the impaired risk market, but as a whole the market has moved away from this strategy.  Today’s best offers come from relationships built with focused and substantial production. Trying to place a substandard risk with a carrier as your first piece of business doesn’t typically generate the offers you desire.  Carriers with whom producers have significant history, or their BGAs or FMOs have significant relationships, are the best sources of meaningful offers.
Every client is special in their own way.  If someone has a medical issue, find an expert in that marketplace and find out as much as possible about their medical information. There is usually some type of product that can be obtained. Remember that underwriting is sort of like a yelp review, everyone has different opinions.  Depending on the type of case, the experience can be different with different companies.    Just like in any professional field, there are different ways to recognize those truly experienced in combining product knowledge, case design and the art of underwriting. A quick interview with the MGA/IMO, or some additional research, can help a broker save time in their quest to obtain coverage. Asking for their work history and  experience, testimonials, or about membership in underwriting groups such as the Risk Appraisal Forum, can help you find the right agency to partner with ahead of time.
I remember fondly the golden age of impaired risk underwriting. Like many BGAs I sharpened my skills on the honing stones of multitudes of attending physician reports and many conversations with brilliant underwriters, chief underwriters and medical directors.  There were a handful of dominant impaired risk carriers and by God, I was darned good at pointing a case to that carrier for a Table 2 rating or another carrier for a Standard rating.  It’s what I did.
To a great extent those days are long gone.  And, while there are carriers that will often do something that approaches the impaired risk days of yore, in my experience there’s been a flattening of the market.   I’ve had wonderful offers from carriers of every shape and size.   I’ve had rejections from things that I viewed as almost sure things from others that I thought would underwrite a risk. 
As the clinical world has evolved it seems that carriers are often more comfortable with the information that they gather. An ounce of prevention in the clinical sense seems to allow for a pound of standard issues in underwriting as the industry seems to be very comfortable in offering up good offers on clients who’ve had an episode that affects mortality, but who has consistent, methodical follow up. Indeed because, perhaps, there’s no way a provider is going to let those with a medical impairment not get good follow-up because of liabilities, evolved protocols for follow up, whatever–there’s more information out there for a carrier, almost any carrier, to hang their underwriting hat on.   
So the takeaway for brokers is two-fold:  First, the consumer who’s experienced a medical pothole feels the power of life insurance–and they want some!   Coming face-to-face with one’s own mortality tends to spur one’s interest in life insurance planning.    
Second, now more than ever because of the dynamics above, there is a home for all but the very impaired risk client.  Clinician’s efforts in follow up, clients efforts in preventative medicine and commitment to keeping an eye on medical conditions allow for more quality underwriting offers.  
Now if those same clinicians could figure out a way to release those records of follow up and prevention in a timely manner, things would be really great!  But that’s a topic for another article…
Since we started out as an impaired risk BGA, it is undeniably the foundation on which we were built. Our experience is extensive. The most important advice I can give is that when a client has a “special risk” (or risks), don’t shy away. Be open and honest about the effect it may have on their insurability and the importance of obtaining as much information as possible up front.
To make it easy, we provide numerous questionnaires that aid in gathering the necessary details for a client’s particular risk. Once we receive the information, we shop our carriers to find the best possible solution for the client.

DI Forum: A Panel Of DI Experts Looks At The Disability Income Market And What Can Be Done To Increase Consumer Acceptance Of DI Protection Solutions

Question: What is your view of the state of the disability income protection market today?

Cohen: The need for this product is tremendous. There are so many people who are not protecting their income. It would certainly be advantageous if we had more companies manufacturing this important product-that is where there is a shortage. The market is wide open and our job is to get more financial advisors to offer this product.

 I went to a wedding recently and was talking to another guest. He asked me what I did for a living. I told him I was in the insurance business and my main job is working with financial advisors getting them to offer disability income protection to their clients.

 He proceeded to tell me his story. He said, “Your product is extremely important. When I was 26, I began my dental practice. At 31, I asked a friend if he knew anybody who could offer me disability income protection as no one had ever called me about this product. At 32, I sought out and bought my first policy for $5000/month with benefits to age 65. At 51 I sought out an agent and bought additional income protection for another  $5000/month. At 53, I was driving home and noticed that the vision in my left eye was impaired. I found out I had Central Retinal Vein Occlusion in my left eye. My vision became so badly impaired that I was forced out of my dental practice. I began a new career teaching. While I was getting a teaching salary, my disability income protection policies were paying me $10,000/month because I was insured in my occupation of dentistry.”

When we talk about the state of the industry I find it amazing that this dentist  had to seek out an agent in order to buy disability income protection. He should have been approached by his life agent or casualty  agent.

When it comes to your most important asset—your ability to earn an income—and your ability to protect that asset, there is a drastic shortage of individuals who are educating consumers about this product.

On DI Day in May 2016, we had over 95 financial advisors attending our event. We also had a speaker—an individual who did not check the box for disability income protection. He proceeded to tell us his story about the most tragic mistake he made, and how his mission is to keep others from making the same one he did.

 Periodically, I go to the website ( to read the Real Life Stories about the individuals that disability income protection has helped. I encourage everyone to go read these stories and to see just how important and crucial this product really is.

I believe the industry is making great strides. I foresee more manufacturers getting into the market for disability income protection.

Bloch: The state of the industry is fine.  The remaining carriers writing disability income protection have been adjusting rates, products, underwriting techniques, and systems to enhance results.  The carriers are working hard to increase market share and making it easier for the targeted consumer to purchase this important coverage.  I am surprised, however, that additional carriers have not entered the market with new exciting products.  The industry needs a new bold approach with basic benefits at affordable rates with a streamlined underwriting process to attract new policyholders who cannot appreciate or afford today’s high quality products.  

Chittenden: It remains an under-penetrated market, yet remains as vital to the financial well-being of every working person as it always has been.  Those of us in this market have been screaming, promoting, teaching, pleading and explaining this fact for years.  Resistance from many financial advisors, as well as traditional insurance agents, to embrace the income protection products, however, seems to remain fairly strong.  This is a double-edged sword.  Because of this lack of penetration, consumers are hurt.  They are not made aware of the need or the solution to protect their income.  On the other side of that sword, those brokers that do promote income protection products have a fairly untapped market.  The problem is not availability of product.  Even with the recent exit of a leading major carrier from the individual market, there is still a plethora of very good products available from excellent carriers to meet both the individual and business income protection needs.  The under-penetration comes from the lack of client education and promotion on the part of the advisor community.   

Phillips: I’m confused and concerned by this market but also very optimistic.  

With the recent departure from IDI by a major carrier in the white collar space, there are  a very limited number of carriers who distribute their product through independent brokerage agencies. And, like IDI’s sister product long term care insurance, there just don’t seem to be many carriers clamoring to get into this space.   This confuses me, as the little information I get on returns on investment for IDI seem to be solid for insurance companies.   Maybe my perception is wrong on that.   

We are in an environment where it is costly for carriers to put business on the books, and carriers must maintain their inforce blocks that were priced and underwritten in a totally different market environment.  I think we underestimate the herculean effort it must take these carriers to juggle this dynamic.  

So we have very few outlets for white collar business, we’ve got a tenuous market environment, and yet there is still excitement in the DI business.  Product enhancements, technological advancements and marketing programs still abound.  Almost daily I’m presented with an exciting case or opportunity.   It’s like some sort of paradox.  

Also, it seems that more producers and planners are looking to expand efforts into the IDI market.    I suppose that’s a function of the likely regulatory changes in the  investment and annuity markets,  as well as the changes that have occurred in the health insurance business.     While it’s a little disappointing that it has taken upheaval for this product that is so fundamentally important to a client’s financial well-being to be brought up as part of the conversation, it’s apparent that it is being brought up more and more.  That has to be a good thing for the market over the long run.  

Petersen: The market for disability insurance is the most robust we have seen in well over a decade. Yes, MetLife stepped out of the individual disability markets, but that should have little impact on the market as a whole. The key players are still in there. There has become more awareness of GSI plans which are being used as primary as well as secondary and excess disability coverages.

Bottom line is there are more opportunities in the Disability market than ever.

Schnittker: The marketplace is better than it has ever been with so many income protection solutions—key man, business loan completion, retirement completion, one person buy-out, and student loan, in addition to the traditional personal disability, business overhead expense and buy/sell.  Great time to be in this marketplace.

Mohr: We are very pleased with our disability insurance sales production this year. Disability sales continue to be a big part of our overall sales and revenue. Retirement planning products are certainly increasing in popularity due to the baby boomers, but there will always be a huge population of working professionals and business owners that need income protection. Most insurance agents just still do not realize the importance of selling disability insurance and the impact on their income both first year and renewals. Disability insurance is not just critical for their client’s financial security, but for the agent as well. What financial planner can say he did a financial plan for a client if he did not guarantee his client an income whether they can work or not?  

Some consumers think that they are covered at work. We train our producers to advise these prospects properly by telling them that most employer plans only provide about 50 percent of what you are eligible for, so you have half a plan through work. That is great, because now you just need to buy the other half! 

The market has never been better for disability insurance sales. There are plenty of great products and underwriting programs. Whether selling to individuals or executive groups, pricing, discounts and underwriting are all aggressive. 

Schmitz: There are fewer advisors being trained by carriers, so financial education is not happening like it used to. High schools should be requiring at least a rudimentary level of financial education and include the concept of insurance in the curriculum.

The market needs more carriers, and Met Life leaving was a big blow, but not a nail. There is a huge number of self-employed people and small businesses that have not pursued protection for their largest asset. The number of employers hiring employees at 30 hours per week so that they are not required to offer benefits continues to increase. Getting the word out that disability insurance exists is our challenge. 


Carriers offer more flexibility in underwriting, including guarantee issue individual policies for small groups. Home offices are genuinely proactive in seeking information from the field to take back and develop new products and processes.

Question: What advice do you have for brokers who don’t spend much time pursuing DI sales to their clients? 

Cohen: Roger Sweeney spoke at my agency’s DI day in May, 2016. He said the biggest mistake of his life was not checking the box for DI protection when the corporation he worked for offered it to him.  He is a young man and is  disabled due to  a series of severe health issues .  He stated, “I was the All-American guy.  Perfect job, beautiful family, great income and then it was all gone.”

My advice is for every broker to know Roger Sweeney’s story and to take the time to read Real Life Stories at 

Once a broker understands how DI protection can save a person’s financial life, that broker should never feel that he does not have the time to pursue a DI sale.

My advice to financial advisors, agents and brokers: You have the responsibility of being entrusted with your clients well being.  You must explain the need for disability income protection. As you read Real Life Stories, you will become aware of the thorough and responsible job brokers did for their clients.  

Bloch: My advice to producers who are reluctant to discuss income protection with their clients is to pursue a partnership or other relationship with another producer who specializes in income protection insurance.  We have a number of producers who realize the importance of this coverage and split cases with income protection experts.  Their clients truly appreciate their professionalism.  On larger or more complicated situations, our agency is asked to develop strategies and implement them. 

Chittenden: Make sure they have a strong E&O policy.  It has always amazed me that brokers will spend all the time and effort to build an amazing financial plan to meet the hearts and dreams of their clients.  They will make sure retirement is funded.  College education for the kids is funded.  Maybe the dream vacation home or the travel dreamed about is funded.  For sure they address the catastrophe an early and unexpected death might cause.  But, they refuse to address the risk their client faces if their ability to fund the entire plan is interrupted by an illness or injury that prevents them from continuing to work and earn a paycheck.  Some brokers have a million excuses.  They don’t want to be a “policy peddler”, or there is only “so much” premium to go around.  They are worried a “complicated” IDI sale will ruin all their other sales, etc. All are simply invalid excuses.  To not evaluate the risk management part of the financial plan fully, meaning to protect the funds (income) that makes the complete plan work, is simply bordering on negligence.  My advice to all of our brokers not promoting income protection is to make sure their E&O plan is in place and strong, and that they very clearly inform their clients what services they do provide and which ones they do not provide.  If there are parts of the total financial plan they are not going to address then they should be identified, and an alternate avenue should be presented to get those aspects addressed.  Not many people can be proficient in all aspects of financial security but everybody can be part of a team that covers all the bases.

Phillips: My first piece of advice would be to make sure they understand their own situation and exposure for disability, and, if they don’t already own coverage or if it hasn’t been updated in years, to get an appropriate IDI policy for themselves.   Work with an agency that specializes in DI to really understand the differences in definitions and the many types of DI products that are available (ID, BOE, Loan DI, Retirement DI, etc.) as a consumer first, then take that knowledge to their own clients.    

I’d also simply announce to inforce clients that DI is now a product that they will be pursuing, and then “just do it”.   Ask inforce clients if they have DI coverage (they probably don’t).  If they have coverage , ask if they understand it (they probably won’t).  If they have had it for awhile ask if it’s been updated with their increased income (it probably hasn’t).  I’ve always been a proponent of learning by doing.   Do it by picking up the phone or meeting with a client and simply asking about their situation.

Petersen: There are several things:

To life and medical sales professionals who do not also promote disability insurance I have one thing to say—shame on you!

People are relying on us as professionals in the insurance industry to advise. If we spend our time saying things like “protect your assets”, “estate planning in case you die”, “business protection”, we better be including not just if you die—but if you live! Protecting your assets begins with income planning. You cannot have income planning without a program to protect the income. This is just as true if you live as if you die.

If we spend our time saying things like, “cover large bills from doctors and hospitals” we better be including some mechanism to cover all the bills, not just the hospital. People worry about medical insurance because they fear large bills from the hospital and doctors. Think about this: In most people’s lives, the largest purchase they ever make is their home. Do they have $500,000, $1 million or more to buy a house outright? Not usually. However, thanks to a mortgage, they can make payments. The caveat in all of this is that they have some sort of cash flow that allows them the ability to pay these big bills and big debts. If a person did not have medical insurance and the bill was $1 million, they could still pay it provided there was some source of cash flow.

Professional insurance producers who neglect disability sales when they actively sell life and/or medical insurance are not helping their client 100 percent. Could this be considered malpractice?

From a personal perspective, these producers are leaving thousands of dollars of commissions on the table.

Lastly, they are setting themselves up for another producer to take over the case and do a better “full service” approach.

Schnittker: You owe it to your client to at least ask them what would happen to them if they became sick or hurt and could not work.  There are numerous income protection specialists that a broker can affiliate with to provide the best solutions for their client’s needs/wants.

Mohr: Pretty simple—you are missing the boat or should I say yacht!

Schmitz: Be careful. Fiduciary liability/responsibility is a hot topic. You must address the issue of income protection within the financial plan or risk management plan. If you are not comfortable addressing the income or asset protection need, find someone to work with who can help you without disrupting the relationship you have developed with the client. Several MGAs now offer “in house” experts who are able to work directly with your client and pay you a referral fee.

Question: How have hybrid/combo products affected the income protection market? 

Cohen: From my observation hybrid/combo products have not affected the disability market.  An individual policy is more comprehensive and will do a better job protecting one’s income.

Bloch: Over the past five or so years, our agency has developed a number of income protection specialty products to solve unique situations for producers who work with our agency.  A couple have had mixed results and others have generated incredible enthusiasm and sales.  I do feel that the the income protection industry will be changed as we target unique specialty solutions, consumers, and other industry professionals. 

Chittenden: I do not see much impact within our market, unlike the LTCI market where the Life/LTC or even the annuity/LTC products have made a big impact.  For the most part, the advancement in the products in the income protection marketplace have focused on improvements for meeting evolving societal needs—such as older issue ages and riders for student loans—or product design to allow maximum flexibility. 

Phillips: In my experience, I have not seen much impact of hybrid products on the income protection market.  But we’re just at the start of this evolutionary use of death benefits helping address living needs.    At one time, acceleration of death benefit was limited to a terminal illness situation.  Recently carriers have expanded into access being granted for chronic illness/long term care situations.    More recently there has been liberalization to allow access for critical illness situations.   It certainly seems that the natural progression might lead to accessibility due to a disability (that might not be because of a chronic or critical illness).   

I’m not sure how the market would accept such a structure.   It seems to me that the acceptance of the ubiquitous chronic illness/LTC design is as much a result of the tumult in the long term care insurance markets as anything else.   

And while critical illness sales are on the upswing, it is not a mature market—there haven’t been generations of planners dedicated to the sale of CI.   There aren’t as many firms with roots as deep in the critical illness market as in the DI market, so it seems that acceptance of CI as a linked benefit opportunity might have less of a barrier than a DI design might.  

Call me old fashioned,  I can rationalize the linked benefit design as a strategy in some long term care planning situations or as a way to get something for critical illness exposure.   But the risk of death, the risk of long term care need and the risk of disability are three entirely different exposures.    In a perfect world, insurance to address these with individual products specific to those risks would be  most efficient.   Especially, it seems to me, the risk of losing one’s ability to earn a paycheck.

Petersen: We haven’t noticed any significant changes. Ultimately combos, like GSI, may just help the sales and underwriting process.

Schnittker: We have not seen much affect.  There are products like critical illness which are excellent supplements to income protection that can be really beneficial for the client, and can make your broker’s recommendation to his client more meaningful. 

Mohr: Most hybrid products have to do with Life and LTC combination coverages. I do not see where these impact disability insurance sales at all.

Schmitz: I would like to see a hybrid/combo product that includes DI. I would like to see a simplified issue hybrid CI/Accident-Only DI with cash value to market to millennials.

Question: What can agents, BGAs and/or carriers do to increase consumers’ acceptance of disability income protection solutions?
Cohen: Being a BGA, my job is to make every day disability income protection awareness day.  
We make our  brokers comfortable with the uncomfortable and we teach our brokers the questions to ask their clients to uncover the need for this important product; selling disability income protection is accomplished by asking questions.
I believe that the way to increase more consumer acceptance of disability income protection is for BGAs to educate the agents on the importance of this product.  The more agents that are educated, the more consumers will be educated.
The carriers who are manufacturing the products have developed good sales material which, if used, will result in more consumer awareness.  It is out there for the taking.  Every BGA and agent should familiarize themselves with the wealth of material that is available from the carriers.
Bloch: Over the years, the carriers and producers have jointly developed incredible income protection policies  geared mostly to the professional as they have been the preferred target market.  They demand Incredibly high quality definitions and protection guarantees.  Business owners and executive types may have different needs including disability business solutions.  I recently visited a physician’s practice and noticed their parking lot looked like a Mercedes dealership.  The patient’s parking lot, however, was filled with less expensive, practical transportation.  Our challenge is to educate the consumer and producer that an affordable solution is a better choice than one they cannot afford.

Chittenden: The biggest thing is for brokers to talk to their clients and educate them about the need.  Start a conversation with them.  Talk about it as income protection, not disability.  Ask some very simple questions to introduce the subject of protecting their income.  There are many easy transitions and opportunities to raise the subject.  For example, when delivering a life policy after placement, congratulate the client on their selfless action to protect the family he loves, but ask what happens if they don’t die but instead get sick or injured.  What would their plan be if they were simply too ill or hurt to continue to work and earn a paycheck?  The life insurance is of limited help to the family at this point.  Another example for financial planners was mentioned in an early question.  What happens to the great financial plan if there is no income to fuel it?  There is no reason for the broker to get into policy definitions and technical jargon.  Simply, the issue is educating the client on the risk of not protecting their ability to earn a living and, as with life insurance which protects the family financially from a premature death, income protection policies protect the family financially from the premature loss of work based income.  Both are needed!
Phillips: I was taught a good lesson years ago by an “old DI warhorse”. He lived in the northern tier of Pennsylvania and had a team of producers spread across the mountains and woodlands that sold only DI—primarily to blue collar clients.  
I was bemoaning the fact that our business overhead expense sales were lacking.   He listened as I griped about how I couldn’t get any broker to even quote—let alone sell—BOE. 
He looked at me and slowly spoke, “Well, Ray…it’s been my experience that if you don’t talk about something nothing will happen with it…have you been talking to brokers about BOE?”   
“Uh…come to think of it, Jim,” I said, “I guess I haven’t.” I went back to my office, started talking up BOE to anyone who’d listen, and guess what happened?  We made some sales. What a concept! Talk about it!  
I think simply a BGA needs to talk it up.  Discuss IDI more and more. Consumers suffer from less than stellar financial literacy on the whole.   Within that context, understanding of the exposures to disability, understanding the design of DI plans, understanding of the claims process and what triggers a claim is woefully lacking.   
BGAs must educate the broker populace that this should not be viewed as a niche opportunity.  It should be a foundation product.  It should be understood for what it is—the basis of every good insurance and financial plan.  It funds every other part of an efficient plan, allowing for continued timely payment of all other insurances in force from life insurance to homeowners insurance.   
BGAs must educate planners to not settle for their clients providing them with the old, “Oh, I have that at work” response.   Group LTD plans must be vetted.   Shortcomings of the group plan definitions must be discovered and pointed out.   For high-income earners the potential shortfall of the group plan’s maximums must be realized.   Is the group plan enough on its own or should it be supplemented by IDI to cover the income gap?  
DI is sold.  This is not a commoditized process. It takes thoughtful discussion, planning and education to help a client navigate the decision to purchase (or not to purchase) a DI policy.   An informed, educated and conscientious broker is needed for a client to decide the proper fit of an income protection product.   

Petersen: BGAs and carriers primarily interact with the retail producer and not the consumers. Thus the message and education needs to transmit to the insurance producer and motivate the producer to take action with the consumer.
Constant and consistent messaging is important. Many marketing pieces designed by carriers are “sales” focused. Today’s consumers often see this. What helps them most in considering the products is education information.
“What would I do without an income for three months?” does not impact me. I can easily rationalize and justify any response and then I am turned off by any further attempt. “Let me tell you about Joe, who is working today and looks pretty good.  But did you know Joe lost his entire business 10 years ago because of being out of work for six months?”  Now you have my attention!
The potential to lose some or all is what is at stake—not just “time off work”.
Bottom line is this: There is no magic bullet. It’s not quick and at times not easy, but that is how most things start!
Schnittker: The broker needs to ask the client what they would like to happen to their income stream, or their business, if they were sick or hurt and could not work.  Consumers don’t want to be sold.  They want to understand the need, find the best solution and be able to sleep at night. 
Mohr: Keep talking about the importance of income protection. I think that the carriers could do a much better job of communicating to the field and the public about the disability claims that they are paying. We have very little information on our claimants. From time to time I will hear from an agent about a claim that we paid or are paying. On one hand it is good, because I am not hearing about problems with claims. They seem to be handled and go smoothly. It would be nice to have more real life stories to help motivate people to own and producers to sell more disability insurance. 
Schmitz: Disability awareness. More claims stories. Salespeople need stories to make it real and to keep the prospect’s attention. Believe it or not, DI is not an exciting subject to most people. They really do not want to talk about it, and they are in denial about the probability of incurring a long term disability and the inability to access social/community benefits. Sales increase when consumers have real stories about nice people, who are grateful, and who have been paid large sums by friendly insurance companies. 

Critical Points To Consider When Marketing Critical Illness Insurance

I’ve been expecting an explosion in Critical Illness Insurance premiums since I first became aware of the product sometime in the late 1990s.   For many years production floundered.   However, that dynamic appears to be over.  According to the Critical Illness Planning website,, premiums increased five-fold from 2008 to 2013.  That’s a phenomenal statistic that is especially powerful given the lackluster premiums in other fixed insurance products over that same time period. 

More employers are offering this benefit on a group chassis or on a voluntary payroll deduction basis.   The individual markets seem poised to grow as the realities of the self-funding elements of national healthcare sink into the fabric of our society.  Simply, all signs point to this being a market that will continue onward and upward, and dare I say, might someday be as much a part of an overall insurance planning discussion as life insurance, disability income insurance or long term care insurance is today.   It’s time to become familiar with this coverage in anticipation of offering this to one’s practice, or preparing for the inevitable questions from consumers as the coverage takes more of a foothold with the public. 

Let’s consider some “good to know” items in this market:

It Wasn’t Spawned by an “Insurance Guy”
The whole idea behind this product came not from an astute insurance actuary or investment guru, rather it came from a physician with a very famous pedigree.   Dr. Marius Barnard, son of the famed South African heart transplant pioneer Dr. Christian Barnard, first thought of this coverage as a funding mechanism.  He was a renowned cardiac surgeon in his own right and he saw the financial hardship his patients endured after recovering from a critical illness. Thus, he lobbied South African insurers to develop this coverage.  

His noble and poignant stance was summed up in this quote that is found on the Insurance Hall of Fame website,, “I was used to operating on people and boasting about my great results of patients surviving five or six years. But all of sudden I saw the social and financial implications. I knew nothing about insurance but I knew life insurance paid out on the diagnosis of death. But to me, my patients lived for years but in this time they died financially.”  This remains the essence of this coverage – providing for those clients who have a critical illness event, but don’t die… which brings us to our next two bullet points. 

People Who Have a Critical Event Live!
Take a look around when you are in a public place and see how many Automatic Electric Defibrillators are available.  In many states it’s a law that schools, health clubs, swimming pools and many other public gathering places are required to have AEDs equipped and on the ready.  Trends in first aid, emergency response and overall medicine have led to some realities on those suffering coronary incidents as well as other critical illness events.   Some statistics that we all probably could have qualitatively grasped anyway: 

• 75 percent of people who suffer a heart attack survive at least three years, as provided by the Critical Illness Planning Website  

• Likewise the same website describes that more than 70 percent of stroke patients live that same amount of time. 

• Women have a 64 percent chance of surviving at least five years after a cancer diagnosis; Men have a 66 percent chance of surviving that time period per the American Association of Critical Illness Insurance.  

The list of statistics goes on and on. It’s very apparent, isn’t it?   But what is also a reality is that with these survival rates there is also a cost of recovery that is very often out of pocket.  

There are Real Out-of-Pocket Costs for Those Surviving a Chronic Illness.
There are a number of different insurances beyond just an insured’s savings that can go to offset the financial impact of a critical illness claim.  However, there are inefficiencies relative to what they will cover when a critical event leads to financial impact: 

Health Insurance – Health insurance will cover the bulk of the medical care that will be provided to an insured, but it will often not cover it all.  Beyond the health insurance deductibles, there are often co-pays, costs for experimental procedures, or other treatments that won’t fall in the realm of traditional health coverages. 

Disability Income Insurance – Disability Income Insurance proceeds are designed to address those ongoing ordinary living expenses that continue when one cannot work.   The costs that are incurred in a critical illness situation are often not “ordinary”.  They are above and beyond what a DI plan may be earmarked to provide.  

Likewise, DI plans have inability to work triggers as well as elimination periods.  Often a critical illness will occur where an elimination period isn’t completed or a loss of work does not occur. 

Long Term Care Insurance – Like DI, there are typically elimination periods that need to be satisfied as well as triggers to ensure the client is “chronically ill”.  Very often in a situation of a critical illness, a person might be cared for and recovered before an elimination period is satisfied.   Or, a client may not qualify for the triggers at all.  

Wrap Up:  Critical Illness Insurance Realities and Other Ideas
Critical Illness insurance was conceived by a doctor with noble intent.  This is a story that proposed insureds need to know.  It’s a coverage that will help clients cover out-of-pocket costs upon diagnosis of such an illness or event.   It will pay without elimination periods, proof of inability to work, and without requiring a client maintain a dilapidated state for funds to be released.  

More and more employers are making this a part of their benefit offerings.   Major carriers are jumping into the fray offering critical illness coverage on a group and voluntary basis.  As the realities of national health care coverage and its shortfalls become more recognized, consumers are bound to ask more about this type of product and purchase it on an individual basis.   Production numbers imply that this dynamic is already in play.   

A prudent producer will get a sense of these product offerings and the differences between carriers.   In relatively short order critical illness could be a big part of a client’s overall insurance planning strategy. 

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

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.

DI Forum: Best Practices, Training, Partnership And Product Outlook

Steven L. Brady, The Standard

Michael Cohen, Eugene Cohen Insurance Agency, Inc.

George G. Davidson, Secura Consultants

Craig Gussin, Auerbach & Gussin Insurance and Financial Services, Inc.

Keith Hoffman, NFP

Maureen A. Kirschhofer,

Thomas R. Petersen, Petersen International Underwriters

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

Q: What are some important agent best practices for selling DI?

Steven Brady: Agent best practices would include frequency of applications. We did a study on agents who write at least five applications a year. The actuaries found that the morbidity was much lower on agents/brokers who did at least five a year. I think the reason is that frequency creates confidence. Confidence is needed in placing a case that has a rating and exclusion and possibly limitations. Confidence also allows an agent/broker to seek out potential clients instead of waiting and being asked about disability. Many will say selling skills or underwriting thoroughness or even target market depth, but I think frequency is the best skill…just go out and do it.

Michael Cohen: Brokers have to ask their clients before the client asks them. Once that occurs, they may not be able to obtain the coverage! There are some great opening questions to ask a client, but starting with a disability insurance inventory is one way to open the conversation. Having an assistant or yourself gather the current disability coverage allows for the conversation. Most individuals do not know what they own or the details of the policies. Better yet, most policies haven’t been updated for their current needs. More times than not you’ll find that there is no disability coverage at all, which paves the way to more targeted questions and real planning.

George Davidson: Don’t make the decision for your client.

Producers make the “buying decision” for their clients without even asking them. We see this repeatedly. “My client doesn’t need this coverage. She has a group plan at work and that is sufficient.” The producer attitude closes down the client’s opportunity to protect her family and/or business. Establish a process that ensures that each client has the opportunity to vote.

Craig Gussin: Agents have to mention and ask every one of their clients to buy DI for many reasons: 1) If you don’t, some other agent will, and then your client has two insurance agents instead of just you. 2) Based on statistics, 25 percent or more of your clients will become disabled. If your client becomes disabled and asks you why he did not have DI, what are you going to say? How is he going to pay his bills? 3) You can increase your income greatly without much work-your clients like and trust you already and will buy DI if you educate them on the need.

Be sure you understand the different DI products and the benefits the different insurance companies will offer a person based on his occupation and income. Not all DI products are the same!

Keith Hoffman: Prospecting, DI storytelling and the consultative approach.

Maureen Kirschhofer: I believe that it is really important to sell the need rather than the features when first meeting with a client. Disability insurance is probably the most important insurance that clients can purchase. When you look at the statistics, it is shocking to see the number of individuals who will become disabled for more than 90 days before age 65. I tell my clients that if they love someone, they buy life insurance; if they love themselves, they buy disability insurance. After working for one company for many years, I really appreciate that I can present more than one option and company to my clients. That way it becomes their decision, not mine. When my clients have a claim, I will be there for them, helping them to complete forms and assuring them that the piece of paper they purchased from me is a contract that will pay them when they are sick or injured and can’t work. It is the “you never know” time of their lives. A disability is difficult, but when the bills come and don’t get paid, it is even worse.

My present clients are quick to offer referrals to me, and that makes me feel that I have done the best job that I can for them. I feel like I am a specialist. I am the cardiologist of the insurance market. I don’t try to be everything to every client, but I make suggestions to help them with their planning by working with other specialists whom I feel will do the best for them

Thomas Petersen: Set reasonable expectations and don’t oversell! There is a difference between explaining what disability insurance is designed to do and promising what a specific carrier will do. Expectations get high about the process during underwriting and claim time.

Ray Phillips: First and foremost, know what you’re selling. While there is a certain amount of complexity in knowing product definitions, for the most part it’s my experience that carriers make their policy provisions understandable and accessible. Agents owe it to their clients to know what constitutes a claim. I’m convinced that many do not review the coverage with their clients in an elevated manner. The fact is that income fuels all other insurance planning and investment planning. I’m not sure that this reality is expressed enthusiastically to the prospective DI consumer.

Future purchase option (FPO) riders are a must-sell to those who can qualify. Fact is, clients’ incomes do go up over time in just about every occupation. FPOs provide an efficient way for policy benefits to track with the increased exposure. While a person’s health may not deteriorate over time, the ease of accessing higher benefits is very appealing.

Hand-in-hand with that, when selling DI I think the agent should continue to communicate with the client consistently after the sale. Having a DI policy in force always provides an opportunity for a conversation. That conversation will allow for a review of policy provisions, an opportunity to adjust coverage to a client’s current situation (higher income, different job duties, etc.) or to provide suggestions on other coverages the agent can offer.

Q: Where should agents go for a) basic DI training, and b) continuing or advanced DI education?

Cohen: We find that this is really an apprentice type of business. Working with those agents and BGAs who have been selling disability insurance for decades is really the place to learn. The International DI Society is a great association that allows agents to dive deeper into disability insurance. In addition, The Plus Group is a nice source of regional BGAs around the country who provide training and education to agents.

Davidson: The Plus Group! If your “product source” isn’t your “information source,” then find a new partner. However, if you are serious about sales, you need to employ a sales strategy I learned from one of our carrier partners years ago: ask to get. Ask for training and you will likely get it!

Gussin: As an agent you should learn about DI from taking courses offered by AHIP, IDIS and other organizations such as NAHU and NAIFA, along with working with reps from DI companies. DI reps love to teach you and go on appointments with you, and they will help you make the sale. To get continuing or advanced DI education, join IDIS, the only organization solely geared toward DI.

Hoffman: There’s a distinct difference between product training and sales training. So I’d say product training can best be learned from BGAs and carrier wholesalers. Sales training from senior producers, senior BGAs and senior wholesalers. As an example, Impel Dynamic offer sales training services that can really help someone learn the ropes, but there’s nothing better than doing it on the job, because the “frequency of fatal accidents” diminishes with experience.

Kirschhofer: I was fortunate to work for a company that specialized in disability insurance. They had wonderful training both in my agency and at the home office. We met for some new agent training after about six months in the business, and I believe that this was the wood that kindled my fire to become a DI expert. Unfortunately, so many companies have dropped selling DI or don’t focus on it because it does not profit them, so agents need to go elsewhere for their training. I would recommend that they find out who is the best in DI in their area and take them to lunch and personally ask if they would mind mentoring them. I have worked with several agents in the Jacksonville area just because they asked. Nothing is more meaningful than seeing someone in action on a sales call. The International DI Society offers monthly educational seminars, and I would highly encourage any agents who want to sell more DI to try one of them. One is open for free, and then membership in the society is necessary to continue. The association has worked hard to establish an advanced disability designation in conjunction with AHIP. Here again, I would encourage anyone interested to go to the website,, and check it out.

Petersen: In general, the best training still comes from the brokerage outlets, as they have a variety of carriers so they can advise on each case a producer comes across.

Unfortunately, most carriers do not train people to sell disability insurance. Many believe they do, but what they often teach is product knowledge, not sales or general disability education. Thus, most training is left to brokerage, to online sources, and through organizations such as the International DI Society.

Phillips: At the risk of sounding self-serving, an agent’s local BGA is usually a wealth of training and education. Likewise, many of the carriers provide wonderful training modules on their websites and have local/regional brokerage reps of their own to support their products.

Life Happens has a wonderful DI suite on their website, The Council for Disability Awareness also has great background information and abstracts on their site,

For advanced education, the International DI Society has partnered with AHIP for the following designations: Disability Insurance Fellow (DIF) and Disability Insurance Associate (DIA).

Brady: I think that training is the most evident problem with our industry today. The time was that with many carriers providing disability insurance, and many brokerage companies competing for business, we wrote the most we have written as an industry because we had the most training available at that time. Now, one must go to LUTC for DI training, and to the local independent DI wholesaler. We are fortunate to have independent wholesalers who believe in disability insurance and provide training on all levels, even on case help.

Q: What are some effective ways “non-DI” aents can partner with DI experts?

Davidson: Outsourcing has been a catch phrase in business for years now, and many times it has a negative connotation. The reality is that partnering with a product specialist is the best way to jump start your practice. Ask  in your network for a referral and visit with a product expert to make sure you both have the same business values. Develop a simple agreement on process and compensation, then “pick five!” The “pick five” is a great way to “date before you get married.” Identify five existing clients who exhibit the characteristics of a DI purchaser.

 • Between 30 and 55 years old.

 • Self-employed or employed with their current employer for more than two years, and earning $75,000 or more.

 • Children still in the home or in school.

 • Client is a “planner” and exhibits this characteristic in prior transactions.

 Now plan the outreach with your partner (introductory note and phone call) and start the process!

Gussin: Meet agents who sell DI at your local NAHU or NAIFA association meetings and discuss partnership with them. Also talk with some of the DI reps and ask them to help you find an agent who is an expert in DI. They will recommend a DI agent they know will be a good fit for you.

Hoffman: The most effective way is to go with an expert on many joint calls.

Kirschhofer: I briefly mentioned this before, but I treasure my relationship with my DI partner. We each have various strengths that we share with each other. We were competitors who met and instead of competing for clients became a company focused on working together with them. In many ways it had taken awhile to get into the market that we have, but it really works. While I love to review contract language with our clients and do educational seminars, Judi is great at focusing on marketing to them on a persistent basis.

Petersen: Just ask! However, most people won’t for fear of someone stealing a client. The reality is that many good DI producers would love to share a sale and help everyone.

Phillips: The agent needs to decide how much he wants to become involved with the DI sale. Does the broker want to present the product, or serve as a facilitator to the client’s consideration of DI?

As mentioned earlier, there are a number of local, state and national opportunities for an agent to get to know and understand the market. An agent can partner with a carrier brokerage rep or BGA to become educated on the presentation of the concept. Most often the carrier brokerage rep or BGA will assist in point-of-sale presentations to allow the agent to get comfortable in the process. Often this is done without concern for any commission split.

In each market there are other agents who specialize in the DI sale. They work with agents who do not want to become involved with the specifics of a DI sale, but rather are looking to “farm out” that business. Those cases are typically done on a commission split basis. Where can they be found? I’d suggest the local NAHU or NAIFA meetings, or even by referral from the company brokerage rep or local BGA.

Brady: The key is “partner.” Corey Anderson is a great example of a true partner. He works with agents who have the relationship with the client but no interest in becoming a DI expert. So they contact Anderson and he splits the case with them. I think that is the future. With disability insurance being so contractual-language-driven and so competitive, it takes an expert to see beyond price and get it through underwriting as sold.

Cohen: Anyone who has clients should be asking some of the basic DI questions. Disability insurance is easy to learn when you have the right teachers. Each broker can become an expert in this marketplace with a little help and direction.

Q: How are today’s products different? What’s good today, what would you like to see, and what do you wish would come back?

Gussin: DI products have changed over the past 20 years. For example, they would pay your client for life if he became disabled, but now they pay only to age 67. The one thing that has not changed is that if he becomes disabled he will receive a tax-free check until age 67. I believe the plans today are as good as or better than before. Just be sure you understand the product you are presenting to your clients based on their occupation and income.

Hoffman: The basic guts of the policy have not really changed. Sure, there are tweaks which have always created the “leapfrogging” that carriers enjoy, but there is nothing really new. “You get a benefit if you are too sick or hurt to work!” I really wish more life insurance carriers would focus their messages on total risk management for planning and not just promote life insurance for income replacement.

Kirschhofer: I guess that I have been in the business long enough to see a complete turnaround from the 1980s. When I began, companies were competing with one another for best cost, benefits and sales. Suddenly at claim time, they realized they had given away the store. Benefits were withdrawn, prices changed, and many companies are no longer in the business. Now, with more rational underwriting and rates, the companies are offering many of the same original benefits. I loved selling return of premium to my clients and wish we had more options to do this in my state. I had one client who remodeled her kitchen when her 10-year return of premium was up. It makes clients feel that they can achieve a benefit without being disabled. We need to convince our state insurance departments to realize that this is a great benefit and one that would be great to return. If you show potential clients a competitive rate of return on the extra premium, it works even better.

Petersen: Products today are nearly as good as they were in the “heyday.” Limits are up, definitions are excellent, provisions are broad, and access to group, individual, multi-life, excess and business coverages have never been greater. Underwriting is faster than ever, too.

There are some products that producers who have been in the disability industry for many years may miss, but some of these items cannot come back, at least in their original form, due either to regulatory or financial reasons. Case in point is return of premium. There are a couple of carriers that still offer this in some form or another, and my hat is off to them. However, most carriers will stay away from this due to the financial loading and reserving it requires. Another provision is the “lifetime” benefit. The concern for “over insurance” is not just the benefit amount that could create a possible malingering, but also having cash flow for the rest of a person’s life. While it still may have its opponents and proponents because of these theories, the fact is that this benefit might not resurface for some time. I do note that maximum benefit periods are creeping up, though!

Many carriers have been increasing their maximum benefits. This is true for personal disability plans as well as business plans. Fortunately for us, there are still many income producers as well as businesses and business deals which require higher amounts for protection than what most carriers will insure. Even within our business of excess coverages, we have seen new product designs that have been generated to meet the demands for these situations and to fill in gaps.

Historically, for example, excess coverage plans were limited to a maximum of five years benefit. Today we have benefits that can be paid up to age 70! This came as a response to the need for programs that better overlap traditional disability plans.

Key person disability planning is another area that has been changing. While there are a couple of traditional carriers that write key person, the benefits they offer currently are relatively low and only for a select group. Every business has a key person, and sometimes they are high income people such as the rainmakers of a law firm or a top executive, and other times they may be technicians who keep the business flowing.

So how do insurance professionals get training for these things? For the most part, selling supplemental or excess disability plans is similar to selling the base underlying plan since, in a perfect world, excess plans are just an extension of the base coverage. This is where product knowledge comes in. There are some differences in the product, but not the sales technique.

I refer back to another comment I made that what producers need to do is keep the discussion, at least initially, on what disability insurance does (regardless if it is personal, business, group, excess, etc.). Once the sales process goes beyond the expression of interest, then specific products should be discussed regarding how they work.

Phillips: Today’s products have many of the traditional definitions that made the DI market viable and substantial years ago. Specialty own-occ coverage is very available. Many carriers have residual definitions as good as or better than they have ever been. I’m not sure there has ever been a time when definitions have provided more robust coverage opportunities than at present.

I am a big fan of the old return of premium rider structure, and I would love to see that rider return in an affordable form. I’m not sure that with interest rates having been in the doldrums for so long-and apparently going nowhere anytime soon-there will be any innovations in that department.

With national health care a reality, I would also like to see more carriers offering the old “nondisabling injury benefit” or accident coverage in their plans. This allows for a sum to be paid out if a client is injured in an accident but not disabled-a sprained ankle, a separated shoulder, a twisted knee, etc. Such coverage can provide dollars to offset deductibles that might end up as dominant factors in the health insurance structure as we go forward. Plus it gives the client a very realistic view of a positive that the coverage can offer.

Brady: Products seem very similar to the best we had to offer in 1980-1985. I think products and underwriting have remained unchanged. GSI is a different animal, and certainly the future of DI growth for most companies. I would like to see a whole life version of disability insurance built and offered to new markets that currently do not purchase disability insurance.

Cohen: The need is there and should be covered. To preserve space, I can’t go into the products and features we would like to see. It’s important in today’s world to train brokers on how to ask and develop the need for this product. Once there is the need, there are resources that can  help review and educate the broker.

Davidson: This is the best time to be in this business! Premiums are lower than they have been in years. Carriers are offering programs to help with  multi-life and business owners. There is more capacity and better underwriting. Demographics are swaying in our favor, with the largest buying group ever about to hit the prime DI buying years. Position yourself now as the go-to person for income protection and you will reap the rewards for years to come.

Q: In LTCI sales, one school of thought is to get at least some coverage in place, with a goal of striving for more coverage in the future. Does this approach lend itself to the DI market?

Hoffman: Agreed, but it is the approach that is incorrect. Many times, at the point of sale, the producer recommends a reduction in the benefit amount to “save premium.” The benefit should be the last choice to reduce premium. It makes more sense to tinker with the elimination period or the benefit period to save money. The reason is that once you’re disabled, it will be hard enough to live on 60 percent of your income. [KH]

Kirschhofer: If cost is a problem-and I tell my clients that they should look at about 3 to 6 percent of their income to protect that income-something is really better than nothing. If they have to decide between a shorter benefit period or a smaller indemnity, I would suggest a shorter benefit period. What I say, if this is an issue, is, “Close your eyes and picture yourself disabled.” Then decide what you really need in a product that will help you to continue in your world. A disability can be a living death, but we can make it tolerable by taking away the fear of living without an income. [MK]

Petersen: It seems to be a thought brought in by some and may have some merit, but the reality is that maximum benefits and benefit excess plan maximums are based upon an adequate amount of coverage, not an overabundance of coverage. Thus, if you get half of what you should have, you go broke only half as fast as without coverage.

LTCI is not designed to replace income in the purest sense, but to provide funds to pay for a specific type of expense. It is not there to cover household bills, mortgage, etc. [TP]

Phillips: I think this approach can and does work in the DI markets. While I am truly a proponent of protecting a client from that catastrophic, long term situation, often it can’t happen within a client’s budgetary constraints. Elimination of riders should be considered first, as far as allowing for the clients to afford something.

Lengthening elimination periods or shortening benefits periods can then be looked at if the client balks at a more comprehensive plan.

If the client cannot-or does not want to-afford a comprehensive DI plan, then something is better than nothing, in my opinion. [RP]

Brady: I think that idea is currently used with future purchase options and automatic increase riders, but to buy a small policy today and grow seems opposite of what most people want. They seem to want the most they can get now and not wait until later. [SB]

Cohen: The future purchase option is one of the most valuable parts of a disability insurance contract. These come in different shapes and sizes, but need to be positioned properly if a broker is going to have success in this marketplace.

The ability to make one’s product less expensive today so that clients can have some protection in force and, in the future, be allowed to apply for more without health questions is very productive and viable. [MC]

Davidson: Of course. Planning is never an “all or nothing” endeavor. Your client may not be able to save as much as he should, but he can start by saving a little and then it grows over time. Property/casualty customers may not have the highest limits, but they don’t go “naked” because of it. Income protection involves diversification (some coverage at work and some personally owned), and recognizing that you may not be able to have everything you want but you at least should have what you will absolutely need. [GD]

Gussin: Yes! I sell a lot of DI and add a future purchase option so clients can buy more DI in the future, regardless of their health. Get your clients some DI, and as their income goes up (and they can afford to pay more) you increase their DI coverage.  [CG]

Disability Insurance Awareness Month Planning Panel

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 (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,

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]