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April 04, 2010 at 08:00 PM
Producers who are new to the disability insurance market — and even some who have been selling the product for years — often believe that underwriting is an unusually high hurdle that they must clear during a DI sale. Fear not: There are many ways to navigate and even streamline the process.
While underwriting is a necessarily painstaking part of securing any protection for our clients, completing a DI application tends to be a more rigorous task than working through paperwork for other types of coverage, such as life insurance. Simply put, DI can put to the test our role as liaison between clients and the home office.
Producers play a very important role in the give and take of DI policy underwriting. We can make everyone happier by tailoring a safety net for our clients and doing good business that bolsters our company’s bottom line and generates long-lasting renewal streams. So how can we start doing that?
By stepping back and taking an objective view. Basically, life underwriting focuses on mortality — the actuarial predictors of a one-time fatal event that will trigger a claim — while disability underwriting must concern itself with a less precise topic: morbidity, or the many, many medical circumstances that can keep a policyholder from leading a productive life. There’s much more at stake in DI underwriting since claims can be paid out for a number of years.
The underwriters aren’t our adversaries, however. We’re trying to bring in business; they’re trying to make sure the insurer stays in business and writes profitable coverage. Bear that in mind the next time you’re going back and forth with the home office. At the same time, don’t overlook a few steps you can take to save time and secure the best coverage for your clients.
Be complete, be forthcoming, be truthful
There’s no way an underwriter will ever know every detail that was left off the application. In some cases, you may even want to write an additional cover letter to explain special circumstances. A stable client who has worked the same job for 20 years, for example, might seek the help of a therapist if, within the course of a year, one of their parents dies or they go through a bitter divorce.
