How Agents Can Best Deal With Impaired Health Clients

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.