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September 15, 2004 at 08:00 PM
Gain Worksite Entr?e By Introducing Executive-Level LTD
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Despite all the media attention to worksite benefits, it is still one of the most untapped insurance markets. I believe the reason is simple: Most producers do not understand what it is and what they can sell in this market.
I have focused on a worksite product that I have found to be highly profitable and that can lead to exceptional cross-selling opportunities: supplemental disability coverage as an executive benefit.
Supplemental executive LTD is a product that effectively answers the business owners question: “What can I do for my executives?” Providing supplement individual LTD to executives where a group LTD plan exists (or a stand-alone plan if there is no group plan) is a compelling answer.
To initiate this sale, the producer must first sit down with the business owner to discuss the importance of attracting and retaining top talent in the executive ranks. One way to hold the owners attention: Discuss the dollar costs, both direct and indirect, of high executive turnover.
To make this sale, you also need to educate the owner about the 2 disadvantages of group LTD plans: monthly caps and taxes. Then explain that the goal of supplemental LTD plans is to help executives keep their net income while disabled as close as possible to their net income while working. You then can discuss various ways the company can pay for this coverage (i.e., a Section 162 bonus, and the various tax effects of doing this for the company and executive).
Owners usually respond favorably to this idea because they see the value in helping protect the executives income and the ability to be selective about including whom they want in these plans.
I have found that most owners and executives know a fair amount about their businesss health and life insurance benefits but have little understanding of their disability coverage. This gives the producer an opportunity to educate them on how their group LTD plan works and identify the limitations of the plan for someone who is earning a high income.
This ultimately leads them to see the gap in their coverage and the value of the benefit the employer is providing. It also forces them to evaluate what their day-to-day living expenses are and what would happen to them and their families if they were to become disabled. I am always amazed at the number of people who cant answer my simple questions, “If you were sick or hurt and couldnt work, how you would pay your bills? Where would the money come from, and how long would it last?”
