'Disability Insurance Is Too Expensive... and I'm Invincible'

How to sell smarter

(Image: Richard Weber) (Image: Richard Weber)

Myths are an interesting mix of a little fact and a lot of fiction — they’re often a way to validate long-held beliefs, regardless of their accuracy. One of the myths surrounding disability income insurance is that it’s too expensive. In addition to that, it’s common to come across clients who think they’re invincible.

“I’ll just prop a phone up to my head”

Early in my 50-year insurance career, I represented Berkshire Life–now owned by The Guardian Life Insurance Company of America (Guardian)–and a major innovator in disability insurance.  One of my first clients was a young attorney who had been in practice for 10 years, and was married with two young children. It was an ideal time for him to consider the foundational resources of life and disability insurance. There was just one problem, he thought he was immortal. His reaction to the thought of becoming disabled was, “I can just prop a phone up to my ear and I’ll continue to earn my living.”

(Related: How to Segment Your Group Disability Sales Pitch)

Fortunately, I had the presence of mind to ask him if he knew anyone who had recently missed work due to cancer, heart disease, arthritis, muscular sclerosis, or lupus, a handful of the most common causes for disability. His blank stare was enough to tell me he did. He quickly realized his solution if ever disabled, his solution for propping a phone up to his ear wouldn’t actually cut it. He better understood the necessity and bought an individual disability income insurance policy to protect his income.

I was pleased with my client’s decision. This story has been an important lesson to me to not so readily let a prospect “off the hook” with their natural resistance to face the realities of life.

Here are three principles to help you deal with clients’ resistance to protecting their income.

1. Get real.

We generally can’t imagine ourselves in less-than-perfect physical shape, and inevitably ignore or–worse yet–assume away the reality, according to the January 2017 Social Security Administration Fact Sheet dated January 2017, that one in four Americans will become disabled before they retire.

Dollar bill (Photo: Thinkstock)

(Photo: Thinkstock)

As an insurance professional, I get it: The loss of income due to accident or disease can be devastating. So I work hard to help my clients accept those inevitabilities, especially when there’s a relatively easy solution–in this case, income protection, in the way of disability income insurance. But, sadly, “I’ll just prop a phone up to my head” isn’t the only objection I come across…

2. Be ready for the “it’s too expensive” objection.

I hear the pushback about becoming “insurance poor.” But, when you’re considering the loss of income due to disability, that loss can be huge. When considering what is at risk without disability income replacement for me and my family, it's enough for me to overcome the price, which frankly isn’t as much as many people think.

To help put the cost in perspective, I sometimes illustrate a choice between two jobs.

1. Job “A” pays a salary of $100,000 a year, but includes no benefits should you become too sick or injured to work.

2. Job “B,” on the other hand, pays $98,000 a year, and provides $60,000 a year in tax-free benefits to those who are too sick or injured to work.

This illustration provides a different way of considering the cost. Most people choose Job “B” because coverage consists of roughly two percent of their income, they’ll have the protection they’ll need to protect against the financial impact of a long-term disability. Your clients can check to see how much coverage may cost you by using this online calculator.

3. Remind clients that income is the foundation.

Income is the foundation to just about everything, including where we live, how we live, the house we live in, the decisions around our children’s college, our assets, our lifestyles. Leaving it unprotected could be too great a risk for most families, who would find that without money coming in could deplete their savings, retirement, lose their home, and ruin their credit rating. It makes financial sense to protect it. The result during a time of stress is that those with disability income insurance will be able to still receive an income and maintain financial stability.

--- Read How to Streamline the Disability Insurance Claims Process on ThinkAdvisor.

 

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