When it comes to selling disability income insurance (DI), a common challenge brokers face is overcoming the it will never happen to me mentality among potential customers. It’s often only after someone experiences an unfortunate illness or injury that he really understands the value and significance of DI protection.
This persistent barrier can be taken as a sign that people need a better understanding of DI insurance to justify a purchase. Brokers should consider trying a new approach with customers-one that relies less on impersonal sales tactics and disability statistics-and instead focuses on better connecting with customers on an emotional level. By doing so, they will have a better understanding of each customer’s needs and offer a DI protection solution that caters to those needs.
Communicating the Fundamentals
of Disability
The first step to connecting with potential customers is to explain the various types of disability and give real-world examples for each. There are a variety of disabling injuries and illnesses that can cause different levels of disability, as well as impact the steady flow of income most individuals rely on for everyday living.
The key is to simplify the disability insurance terms so individuals can understand how DI policies work and how DI insurance can help them in their time of need. Breaking down the categories of disability, or as I like to call it, the five problems of disability, can make it real and personal for individuals. Here are the five categories of disability and examples for each:
• Total Permanent. Total permanent disability happens when, because of an injury or sickness, a person is unable to perform the duties of his occupation, is not engaged in any other gainful occupation, and is under the regular care of a physician. This type of disability might result from a car accident, which could lead to paralysis. However, other injuries as a result of such an accident can cause a permanent disability, including loss of eyesight, hearing and speech-not just the loss of limbs. Total permanent disability is what most people think of when they imagine a disability, and these disabilities are then one of the most common to gain successful claims.
• Total Long Term. For total long term disabilities, DI income insurance focuses on an individual’s ability to perform the duties of his occupation. A prime example of a total long term disability is a back problem that makes it impossible to perform the duties of his original occupation. Back injuries, which are the second most common type of disability, can lead to total long term disability and are an easy-to-understand example for potential customers.
• Total Partial. A total partial disability limits an individual’s ability to work at full capacity for a limited period of time. For instance, a stress-related heart attack or stroke that requires a period of time of total disability followed by a period of recovery with a partial disability is an example. Income is less during partial disability because the disabled person performs work at a slower pace or for fewer hours.
• Partial Progressive. This type of disability can result from an illness that steadily worsens over time, and can include such common conditions as multiple sclerosis, arthritis, cancer or diabetes. There is usually a partial disability for a certain period of time that progressively worsens until it becomes a total disability. For example, let’s consider a medical professional who contracted an autoimmune disease.
Shortly after he purchased his medical practice, the good doctor gradually began to lose his ability to work due to the unexpected effects of his illness. His income and practice began to suffer, so he filed for disability insurance. However, the medical association he received benefits through denied his claim because they required him to be totally disabled and receive those benefits first before any “progressive” disability benefits would be paid.
Paying a lower premium for disability insurance often has hidden caveats and benefit restrictions that are not apparent until a claim happens. If a low-price DI policy does not pay benefits when needed, this can be a very costly discovery for a claimant.
• Short Term. A fracture, sprain or an illness such as hepatitis can cause an individual to take a short term leave of absence from work.
There are several types of disability, and it’s important that individuals understand them. Bringing meaning to these terms and evoking emotion is what makes it real for customers and, ultimately, creates the sale.
Appealing, Relatable Policy Features
The next step in delivering on this new approach to selling disability insurance is to emphasize DI policies with innovative, yet relatable, features. Robust and comprehensive coverage options that are designed to grow with, and deliver on, a range of individuals’ needs will be appealing to a larger audience. In addition, these policies should be able to financially protect individuals from the five categories of disability listed above.
Following are three examples of policy features that will allow brokers to meet a range of customers’ needs and wants.
• Extended coverage benefit to care for loved ones. When a family member or loved one becomes ill, a person is forced to make a very tough decision: stay at work and continue earning a full income, or take a leave of absence from work and potentially lose income. In this situation, some may even have to consider taking early retirement, quitting their job or dramatically reducing their working hours. An already emotional and stressful time is now tainted with financial worry. Time, sometimes limited time, with a loved one is invaluable.
DI policies that offer a compassionate extended coverage option can be a solution to this problem. This feature pays a monthly benefit proportionate to the insured’s loss of income if he must take time off from work to care for a loved one with a serious health condition. It offers peace of mind and reduces financial concern so an individual can focus on providing care, and spending time with his loved one during a critical time.
• Partial disability provision that en-courages returning to work. When partial disability occurs, individuals are only able to work in a limited capacity, which can adversely impact their paycheck. A partial disability benefit that encourages a return to work can allow an individual to work part-time, rather than having to file for total disability to collect benefits.
Policies that include a partial disability provision can pay benefits for an extended period of time if the disabled insured has a loss of time, duties or income, regardless of the amount of income earned when returning to work. After recovering from the disability, the insured will receive a recovery benefit if he continues to have a loss of income due to the sickness or injury that caused the disability.
• Mental health coverage. Mental health disorders such as anxiety, depression and stress can impact a person’s work performance much like a physical issue. The Organization for Economic Cooperation and Development says that one in five workers suffers from some level of mental illness, and as a result, organizations are seeing an increase in employee absence. One study reports that depression alone is one of America’s most costly illnesses, costing more than $51 billion in absenteeism from work and lost productivity, as well as $26 billion in direct treatment costs.
A key DI policy feature is one that offers coverage for mental disorders or substance abuse without any special limitations. Many policies put limitations or restrictions on this type of coverage, which reduces the value of the benefit to the customer.
A policy with an extended benefit period and no special limitation on coverage for a variety of mental health issues and disorders-instead of the typical two-year limitation-will add extra value for clients. As mental health issues continue to affect individuals, policies with strong mental health coverage provisions are likely to become more common and more in demand.
A simple, yet effective, way to add value and build strong relationships with your clients is by taking a personal approach when selling disability insurance.
Uncover the need for disability insurance with examples that are relevant to his or her life and dig for policies that are flexible, customizable and go above and beyond the necessities.
Simplifying Disability Insurance
When you’re talking with customers, consider using a few anecdotes that make understanding disability even simpler.
Refer to disability insurance as “ability insurance”
If life insurance is commonly known for paying death benefits, then disability insurance provides individuals with the ability to earn an income if he should become disabled. Through disability insurance, brokers help protect the ability of their clients to maintain a standard of living, even if they must deal with an unanticipated disability.
Compare disability insurance to water
Water is the second most important need in Maslow’s hierarchy of needs. Without it, we can only survive a short period of time. We rely on income much like water to survive, and it needs to be supplemented to ensure it is constant. A disability is like the stoppage of water-the income stops if there is not a disability insurance “well” dug deeply in your back yard as an alternate source of income.
Examine the cost of DI insurance and self-funding
My favorite way to explain the value of DI insurance is to compare the cost of DI insurance to the cost of self-funding a disability. For example, brokers can walk potential customers through the “averages.”
The average age for a disability is age 53, and the average length of a disability is five years. Ask customers if they were to conform to these averages how much money would they be able to save up by age 53 to self-fund a disability for five years.
Next, take that daily “premium” and ask if they did set that money aside, would it harm their current standard of living? In many cases, the answer is “yes.” And if they did not conform to the average, what would happen if their disability started sooner than age 53 or lasted longer than 5 years? For many individuals, this could have a catastrophic effect on their standard of living.
Finally, show them the premium for a DI insurance policy that covers them today and is not limited to five years of claim. Wouldn’t it be nice to have the money set aside now and not have to worry about a disability happening sooner or lasting longer than average? In addition, the premium for DI insurance is much less than self-funding to prepare against being average.
