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How Agents Can Best Deal With Impaired Health Clients

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They can be frustrating, but there are ways to work together effectively

Impaired risk clients are a point of frustration for some agents.

After establishing with the client the need for disability or life insurance protection, filling out the application and going though all the paces, agents sometimes find out that the client is uninsurable–due to a health condition or a rating so high that the sale is all but lost. All that work out the window!

Agents who constantly feel frustrated by this might be in the wrong profession. Or, perhaps they have not yet learned how to take responsibility for getting the medical information right in the first place.

A more productive stance is to view obstacles in underwriting as not only a part of the insurance business but also as the agent’s best opportunity to build lasting relationships and grow business.

With that in mind, here are a few things to consider when facing clients who have (or might have) health impairments.

First, take a step back and separate the transfer of risk from the transfer of responsibility. Make the client aware of health conditions that can develop, or help the person simply recognize that he or she does have a condition about which the insurer needs to know. This informational exchange assists the client in planning for the future and helps identify risk.

Second, let clients know that people with known health conditions are not always uninsurable. In today’s impaired risk disability income insurance market, one of the little known elements is that the claims loss experience on the impaired risk contracts is often better than you might think–even compared to standard policies.

What that effectively says is that the biggest risk in the disability business isn’t the person who is aware and dealing with a health issue. Rather, the biggest risk is the person who is unaware. This is because, once a person understands that he or she has a health issue, the tendency is to want to fix it. The behavior changes. And while a condition may not go away, it is often better managed as the person takes more responsibility for overall health.

Third, advisors should be upfront with clients, especially if the health issue comes out before the application is submitted. Set sound expectations that there may be underwriting issues related to the condition, and properly explain what those issues might be and what the agency will do in response. This will put the agent in a good place, if underwriting issues do arise.

Fourth, take responsibility to help clients do what they need to do regarding their health. For instance, help them request that underwriting information be sent back to their physician, and make sure they are aware that they do have a choice in changing their health.

In the end, advisors need to make sure clients understand that the only person truly responsible for one’s health, future and financial security is oneself. The agent can help the client transfer some risk but not all risk.

When clients see the agent as someone who is trying to help, and not someone who is the problem itself, the relationship strengthens going forward. Once they understand the difference between their own responsibilities and those of the agent, the relationship can move forward, with the advisor helping the client plan for risks that can be transferred.

To start, the agent may need to point out to a client who has a health issue that there is more than one risk to consider in disability protection.

Example: A person may have, or think he may have, a bad heart. In such cases, the tendency is for the person to see that heart condition as his or her only real threat. This is where the agent can do the client a real service. Point out that a bad heart will not stop a car accident. High blood sugar does not prevent cancer. The risk of disability is real and in our society is increasing, with or without the heart condition.

Go grab a medical dictionary and hold out the one page containing the ailment they are worried about and compare it to the hundreds of pages of ailments they do not have–yet. Naturally, hitting the client over the head with the book won’t help. But part of the agent’s job, at times, is to hit people over the head with the truth.

That truth is, accidents and major illnesses are a real possibility.

To illustrate, the agent can cite some examples from his or her own life, if relevant. True, some agents feel insecure telling stories about family, friends or even themselves. However, clients often grasp the message better when the agent uses those lessons to help clients separate statistical facts from facts that arise from irrational fixation.

The next step is to lay out all the options the client has given for their impaired health background. The agent should do this because he or she may be able to secure a policy with an amendment or rider. Remember, just because one thing isn’t covered, that doesn’t make the policy worthless. The contract still may protect them against 99% of the real risks the client faces.

The agent also can look to using an impaired risk product. Many such products now come on a guaranteed renewable platform and provide good core protection for the critical first few years after a disability.

In addition, do not fail to look to a group contract or a guarantee-issue offer with a worksite product. This may not only help the client get coverage, but it also may be a great chance to expand business to the co-workers and partners of clients. Further, not only can these clients help their co-workers get coverage, they may also get some excellent discounts and underwriting concessions for themselves.

If none of those is an option, help the client look at saving money and making some plans for the worst-case scenario, should it arise.

By taking the responsibility to guide clients through every option and by helping clients take responsibility for their own choices, agents are certainly in their rights to ask clients to take some responsibility, too–in helping the agent build his or her career. For instance, a client may not purchase any insurance products from the agent, but the client still can be an invaluable referral resource.

In sum, by taking responsibility to do things right, the agent virtually can guarantee that an impaired health client does not have to mean an impaired relationship opportunity.

Brad Parks is vice president-voluntary group and executive benefits for Cottingham & Butler in Dubuque, Iowa, and founder and president of the Disability Income Advisor and Consumer Association. His e-mail address is [email protected].


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