Disability insurance is the most overlooked and misunderstood form of major insurance, but one that most people need. We sat down recently with a top disability insurance expert — John F. Nichols, president of Disability Resource Group, a Chicago-based retail and brokerage provider of income and business protection products — to find out his view on how to get more people covered.
Q: We can talk all we want about the importance of disability insurance, but the tough part comes when the advisor has to sit down and have that disability insurance conversation with his prospects and clients. How do you go about that conversation — do you have some “do’s” for us?
John Nichols: I’ve found in my many years of working with this product that clients are unsure of what disability insurance is. So one “do” is educate rather than sell. Educate them on what disability insurance will protect, what it means, and how it can affect their life. Another “do” is to help them understand that it’s about their dreams and goals, not about the catastrophe.
Q: What do you mean it’s about their dreams and goals?
JN: The true foundation of their financial plan is income, and by protecting that income with disability insurance, you’ll be protecting that client’s dreams and goals.
Q: What about “don’ts” when selling disability insurance?
JN: Don’t spend a lot of time on statistics. And don’t spend a lot of time on the concept of the catastrophic disability. It’s great to share a story here and there, but don’t make that the focus. Make the focus about the client and their dreams and goals and lifestyle and how disability insurance will protect those.
Q: What are some of your best practices?
JN: Three come to mind immediately.
First, build an incredible profile of your client by creating a “dreams and goals” profile, as well as what I call a “facts and figures” profile. I have the dreams and goals conversation first, because it’s about building the client relationship. This enhances the trust level before you get into the facts and figures and the actual strategy of paycheck protection.
I start this conversation out with questions such as, “Mr. Prospect, if we were sitting here a year from today, or three years from today, and we were looking back, share with me what would have to happen for you to feel happy with your progress in your personal and professional life.” The goal is to build the client’s bigger future. And once you understand the client’s future, it will make the conversation about income protection all that much more valuable.
Second, if you’re working with business owners, ask about key people within their operation. The question to ask is: “Without protection of the key person, how would your business continue to operate?”
And third, if I’m working with a medium or large business, I focus on nesting within that business. For example, if I have a client within a business, I may ask him them, “How would you like to save 20 to 40 percent on your premium for your income protection plan?” And that generates a conversation about how to obtain additional clients within that particular firm. It’s a win-win: the client gets a discount on their income protection, and you obtain additional clients to work with.
Q: You were the spokesperson for this year’s Disability Insurance Awareness Month. Do you have any takeaways?
JN: It’s simple for any agent or advisor to put together their own disability insurance marketing plan to reach out to clients and prospects using the LIFE Foundation’s free resources — from flyers to e-cards to videos. The bottom line: no excuses. As an industry, we often overlook disability insurance, but it’s a key foundation product of one’s financial plan, and as advisors, it’s our responsibility to share with our clients the value of paycheck protection. I take that responsibility seriously, and as a financial advisor, I strongly urge you to have the conversation with your clients and prospects.