If you’re an insurance broker who isn’t tearing it up in the disability market, now’s the time to unwrap your true potential. Here are five very valuable gifts to help get you started.
Gift #1 – Lackluster Competition
Most agents lack confidence when it comes to selling disability insurance (DI). They’re uncomfortable with the product and fearful that they won’t be capable of answering questions. Why? Because they haven’t practiced it much. We all feel a little uncomfortable when we try something new – whether we’re 5 years old learning to ride a bike or 50 years old learning a new product. Discomfort isn’t a barrier – it’s a gift. It’s an opportunity to execute in an underserved niche. Most agents avoid uncomfortable situations and therefore avoid selling disability insurance. This makes it easier for you to rise to the top in a wide-open playing field.
Gift #2 – A Ready-to-Buy Audience
I can guarantee a large percentage of your existing clients are ready and willing to purchase paycheck protection – you just have to ask the right questions. Here’s how:
Go through your files and make five lists:
- Clients who purchased disability insurance from you in the past
- Clients who purchased disability insurance from someone else in the past
- Clients who have declined disability insurance because they have an employer-provided plan
- Clients who do not have disability insurance
- Clients who were previously uninsurable
If a client already purchased disability insurance from you, notify him there have been tremendous changes in paycheck protection coverage and pricing over the past two years. Explain that it would be smart to review the old policy to determine if better options are now available to improve coverage provisions or rates.
If a client purchased disability insurance from someone else, ask her, “Do you have the old coverage or the new coverage?” This will spark interest and a confused reply. Then explain that if the policy was purchased more than two years ago, there’s a very good chance you can improve the provisions or rates based on recent tremendous changes in paycheck protection.
If a client has employer-provided group disability insurance, say, “You are very fortunate to have an employer who thinks so highly of you. You should feel proud to be working for a company that cares about its employees so much. Your plan probably covers 60 percent of your income, right?” When the client agrees, say, “Well, let me ask you a question… do you know when 60 percent does not equal 60 percent?” The client will ask, “When?” Then you’ll say, “When it’s an employer-provided plan. Employers deduct the cost of DI premiums from their taxes and because of that, your DI benefits are taxable. Therefore, instead of 60 percent, your net benefit amount will be 42 percent. Can you maintain your lifestyle on 42 percent of your income? If not, it’s smart to consider a supplemental disability insurance policy.” Get details about the existing coverage and build a smart supplemental plan.
If a client doesn’t have any disability insurance, contact her right away. Explain that as an insurance advisor, you would be remiss if you didn’t suggest protection for her most important asset – the paycheck.
If a client was previously uninsurable, ask permission to take another look. In the past few years, disability insurance underwriting standards have softened, prices have dropped and new products have entered the market.
Gift #3 – Buying Signals
A disability insurance price objection is a buying signal and an important indicator of interest. Price objections may not feel like much of a gift, but they truly are a gift if you know what they mean and you’re prepared to overcome them.
Gift #4 – Sustainable Income
LIMRA International, Inc., reports that the average persistency for term life insurance is 6.6 years. Comparably, the average persistency for disability insurance is 12.2 years – nearly twice as long! Can you see the gift? Here it is… When you sell a disability insurance policy, you open the gift of highly-sustainable income. Most seasoned agents will tell you that they wished they started selling disability insurance earlier in their careers, because they now realize that if they’d sold more DI back then, they’d be taking a lot more vacations now.
Here’s another income argument to consider… You probably already know that as your clients’ incomes and lifestyles increase, it’s important that their disability insurance benefits keep pace. Most disability insurance policies include a future purchase option, which makes it easy to increase your clients’ benefits and give yourself a raise in future years. But here’s what you may not know, when your client exercises the future purchase option, you receive a full 50 percent commission in the first year of increased premium.
Go ahead and do the math. If 25 percent of your disability insurance clients take advantage of the future purchase option each year, you’ve unwrapped an unbeatable income formula!
Gift #5 – Timing
They say timing is everything, and I can assure you that there’s never been a better time to sell income protection than now. In fact, for a limited time, your clients can experience a triple-buying advantage. Here are three advantages to buying now. Use these arguments to create buying urgency with your clients:
Relaxed underwriting: Securing coverage is easier than ever before. In fact, for the first time ever, many carriers are writing up to $5,000/month of coverage without medical exams, blood or urine samples, medical records or income documentation!
Transitioning economy: Rates are low right now, but they won’t stay that way forever. The government just passed a stimulus package that is expanding our nation’s money supply. Rather than spending money, most Americans are paying bills and saving money. In the next few years, we may see that our abundant money supply triggers an upswing in prices and inflation. Historically, when inflation goes up, insurance rates rise.
The age advantage: The younger you are, the lower your rates. Therefore, it’s smart to lock in a low rate while you’re young. Once you purchase your policy, your rates can’t go up regardless of your age or medical condition.
Will You Open These Five Gifts?
These unopened gifts represent hope, satisfaction and untapped possibilities for your insurance sales career. Will you sit and look, or will you rip and tear? The choice is yours…and the choice just might change your life.
By Rebekah Prather