Selling any ancillary employee benefit in todays climate is a challenge, given the huge burden employers face with rapidly escalating medical premiums.

With disability, however, the facts are on your side. Disability insurance not only provides vitally important income protection for employees, but it also protects the employers interests in ways many employers–particularly those running small but growing companies–often dont fully understand.

Most people understand both the importance and the value of life insurance. Most dont realize that people are far more likely to suffer disability than death before age 65. And many of the entrepreneurs building successful, growing enterprises have not given a great deal of thought to how they would deal with the disability of a key employee–or how the decisions they would make in such a case would set precedents they would have to live with for years to come.

That knowledge is power–selling power. Knowledge makes it possible to be successful selling disability, even in todays economy. Lay the facts out on the table. Those who are smart enough to be successful entrepreneurs in this economy will be smart enough to see the need, understand the value and buy the product.

The prime new customer for disability is a successful startup or a small company experiencing a surge of growth. One way to open that customers mind to new possibilities is by asking a question: How would you handle the situation if your most valuable employeeyour right-hand personsuffered a disability that would keep the employee from working for an extended period of time?

As the question is pondered, remind the employer that whatever assistance offered in that situation would set a precedent that could complicate personnel issues at the company for years to come.

At this point, you have created what educators like to call a teachable moment. Now, you can start laying out your facts, because your potential customer is open to them. Those facts include:

Disability insurance coverage takes that difficult decision about the key employee off the employers hands. The employer will never have to make that hard choice.

Disability is a benchmark benefitone that an employer of highly educated, highly skilled workers needs to offer in order to compete for talent.

About one-third of people between the ages of 35 and 65 will suffer a serious disability, according to the American Council of Life Insurers, Washington.

A voluntary disability benefit carries minimal cost for the employer. And if it is purchased from the right broker-consultant and carrier, it presents minimal administrative headaches as well.

Disability, like most ancillary benefits, can be classed-out.

That last item, believe it or not, can be a real eye-opener for small but growing companies. Many are surprisedvery pleasantly surprisedto learn that the flexibility exists to class-out employees by setting up coverage programs according to factors such as management status, income or tenure.

That also illustrates that while realities point to the value and need for disability coverage, cost remains a powerful factor. A broker who wants to keep this business has to work hard to hold the line on costs and to demonstrate value.

While disability, like all ancillary lines, is being offered more and more on a voluntary basis in which the employee pays for the coverage, many employers are taking intermediate cost-saving steps along the way. Shared premiums are one such step. Another is ratcheting down the benefitfor example, reducing the payout from 70% to 60% of income, or reducing the duration of benefit payments to five years from age 65.

However, while cost is important, my customers indicate that customer service is equally important. From enrollment to administration to claims, employers want a benefit product that is effortless for them while still providing real value to employees.

It takes a strong working partnership between the carrier and the broker-consultant to keep that customer service promise. If the carriers local office can quickly and efficiently handle any enrollment issues that may arise, then I will want to work with that carrier more often. If I encounter a gray area on a claim, and that carrier will work with me to help that employee, I will remember that down the road.

William T. Holmes, RHU, is a senior consultant with Trion, King of Prussia, Pa., an employee benefits consulting, brokerage and administrative firm. He can be reached at william.holmes@triongroup.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 19, 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.