As an underwriter of high limit disability for corporate, sports and entertainment markets, my perspective of the disability insurance industry is quite unique. It allows me to work with the nations top agents and see the disability business across company lines.
Also, as president of the Disability Insurance Advisors and Consumers Association, a disability study group, I speak monthly with the heads of the major disability insurers, home office underwriters and top general agents.
From this position, I can say without doubt that after over a decade of decline, the disability insurance market is making a comeback. Now is a great time to take advantage of this new opportunity and start asking clients to consider disability income coverage.
The real opportunity for you today as a financial advisor and risk manager lies in the state of the economy.
The 1990s boom has ended and consumers are less focused on profit potential and more focused on keeping what they have. They are more receptive to disability concepts that are cornerstone to the disability insurance business: protecting ones income stream as well as ones future.
What you as a disability producer need to know is: Your competitors are not talking about these issues or about how disability insurance can help. For you, that means opportunity.
For example, right now, some highly paid executives probably dont know that their group disability coverage may be capped at 35% of base income. They also may not know that an individual buy-up disability plan could be of great value to them in filling the gap. The disability producer can be the one to open the door to new possibilities.
Or, how about offering to review a companys group disability program? Many have not had a comprehensive review in a long time. If you are uncertain on how to proceed, there are many disability general agents and wholesalers who can help you.
Or, what about you doing your own reviewof your existing client base? When is the last time you visited with clients about the disability risk and the protection that is available to cover it? This is a discussion that can go several directions. Thats because disability planning requires a discussion of cash flow and income. This discussion can provide you with plenty of opportunity to discuss life insurance and investment planning as well as disability insurance.
Todays opportunity boils down to using disability planning to help build long-term, profitable relationships. Any good disability producer can tell you that disability renewal commissions are the best in the business–a solid base to any agencys bottom line.
Further, disability planning provides a great way for the producer to be a unique professional. You can use that position to create new client relationships as well as revisit old ones.
If you have been out of the market a while or have never been in it, here are four time-tested ways to guarantee success when you discuss disability with clients.
First, find an expert. If you dont know much about disability, work with a general agent who does. The GA can provide quotes, policy language and good ideas on structuring cases.
You might also consider partnering with an agent who has disability experience. Mentoring is the most effective way to achieve success in this or any business.
Another option is to pick one good carrier and build relationships within that company that will, in the long run, help your clients. You may occasionally need other carriers for non-standard or impaired business but the major disability carriers all have good products and the best thing for your client is to have something in force when they need it.
Second, learn the basics. Again, any good disability GA, experienced broker or home office can provide a wealth of information and answer a variety of questions. What are the guidelines for this type of coverage and the basics of policy language? What plans are available, and what are the general concerns for your target market? What are some key sales tips to make the process as efficient and profitable as possible?
Third, work with underwriters and be vigilant in the application process. Why? By obtaining complete medical and financial information from your client, you will immediately learn of possible underwriting problems and can set proper expectations of the underwriting outcome.
This will help solidify your clients trust and make it easier to place limited policies. In the end, it will also make it easier for you to be compensated for your efforts. In addition, if your underwriters feel that you always present a clear and detailed case, they will be more likely to give your clients the benefit of the doubt in difficult underwriting situations.
Fourth: Take advantage of the revived market. The opportunity to discuss disability insurance is the best its been in decades. Companies are eager to find ways to help you place business and are working on new ways to help you tell the disability story.
If you would like to take part in the growing disability market, this is most important key to success. Just ask your client, “What happens to your financial plan if your paycheck stops.”
, a sales leader for BISYS-Special Market in Dubuque, Iowa, is also president of the Disability Income Advisor and Consumer Association. His e-mail address is [email protected].
Reproduced from National Underwriter Edition, February 24, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.