Achieving Success In The Small Business Disability Market

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A growing business segment with underserved insurance needs, the small business sector, represents one of the most promising markets for insurance. Not only do employees have gaps and shortfalls that can be filled with voluntary benefits, but the business owner himself has personal and business needs.

Offering voluntary benefits through the small business employer, then, can lead to additional sales to fill personal and business needs of the business owner. Conversely, voluntary benefits can be an entr?e to selling the owner a variety of financial products.

Life is full of significant moments that affect financial stability, and business also has its lifecycles that trigger needs for insurance. This provides an excellent opportunity for you as a financial professional to help small business owners with personal insurance needs while also helping protect their businesses and employees.

Disability insurance is a way to add value and build relationships by helping business owners evaluate various business scenarios and protect against financial disaster should they be out of action by injury or illness.

Prospecting. Seek out small businesses and contact the owners. Referrals and networking are the preferred method for this market, so dont forget to obtain recommendations from new clients. And consult with small business owner clients frequently, establishing a regular schedule to return to them and discuss their current business situation.

Also, consider establishing a working network with other professionals who often work with the small business community, such as attorneys or CPAs. Attend local events such as Small Business Association meetings while establishing contacts within the local chapter of the Chamber of Commerce, to build a network among small business owners.

Identifying opportunities. Many producers focus on just the personal insurance needs of business owners. But business owners look to protect their business interests as much as, if not more than, their personal interests. Business continuation needs such as buy-sell disability income insurance, coverage for business expenses when disability occurs, and providing for their disability income needs are all part of business protection planning. Also call attention to the benefits of offering or expanding employees disability coverage.

Owning a small business is a big responsibility. Companies constantly evolve, and each stage of development offers its own challenges and rewards. Define the stage of each small businesss lifecyclefrom conception and startup to growth and expansion, partnership and exiting. Identify what solutions are right for them and their operation as the business evolves through these stages. Help owners determine costs, value and needs.

For example, any one, at any time, can become disabled. Business owners may have disability income insurance to provide personal financial protection to employees or themselves. But many may be surprised that they can acquire additional coverage to help protect ownership interests, such as by funding a portion of a buy-sell agreement if an unexpected disability occurs.

Other sales opportunities include needs-based, customizable insurance coverage that protects a portion of the business owners earned income and future retirement contributions and provides for small business continuation. Be prepared, too, to discuss business overhead expense coverage, the need to be able to continue to make retirement contributions in the event of disability and the availability of spousal discounts. These are all relevant products or features to the small business owner.

Preparing needs-based solutions. Begin your approach by asking business owners about their business. Get to know not only the business but also its owner.

Gathering information is simple: Find out how long they have been in business, whether they support a family and if the business is family-owned. This will help you to recognize any needs that may be currently overlooked or only partially addressed.

If a business is in the planning stage, determine the answers to questions of financial risk, including planning for unforeseeable obstacles such as suffering a long-term disability. Then help proprietors plan for such unexpected events.

As a business grows, so do the needs of the owner and his employees. Providing for more than one need is essential to establishing a long-term relationship with the business owner. Be prepared to discuss several products, and understand how each may benefit the business.

For example, during expansion, there may be a need to attract, retain or absorb employees from an acquired company. That may be a suitable time to ask business owners to think about offering company employees supplemental individual disability income insurance coverage as a voluntary benefit, to help them protect a greater portion of their earnings.

Adding a new business partner is also an ideal time to help owners reevaluate and determine how coverage may need to change to include their new associate.

You owe it to your small business clients and yourself to help them understand continually and determine personal and professional needs for value-added coverage. No matter how experienced you are in working with this market segment, theres plenty of opportunity within the small business marketplacea great place to revisit, uncover various needs and propose needs-based solutions while growing your reach faster than you might expect.

is assistant vice president, disability income insurance marketing, at Massachusetts Mutual Life Insurance Company, Springfield, Mass. He can be reached via e-mail at LHazzard@MassMutual.com.


Reproduced from National Underwriter Edition, November 24, 2004. Copyright 2004 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.