Every day, we work with producers to help them grow their businesses. This involves finding the right prospect, uncovering financial needs and selling appropriate products. What many producers may not realize is their existing book of business is the best resource for more business – not only for referrals, but also for new sales.
Many producers help clients build a financial foundation with life insurance. Many clients know they need life insurance and gain peace of mind knowing that they’ve taken care of their family in the event of their death. What may not be as apparent is that many of these same clients could be ideal prospects for individual disability income (DI) insurance to provide a “living benefit” for clients and their families. Consider this rule of thumb: If you’re selling clients life insurance for risk protection, they also need individual DI insurance.
A colleague of ours shared a good example of this: He was diligent about helping clients purchase the appropriate amount and type of life insurance, and about creating estate plans. However, he didn’t consider what would happen to all of that planning if the client became too sick or too hurt to work.
One day, the spouse of one of his biggest clients left him a message. Her husband had been diagnosed with a severe illness. The prognosis was not good, and they expected a long and grueling recovery period. Since he wouldn’t be able to work, she wasn’t sure how they’d make ends meet without his regular paycheck. She wanted to know their options, and was sure that our colleague had taken care of them.
Our colleague became very upset. He hadn’t talked to the client about this scenario, and wasn’t sure how to return her phone call and deliver the news. He had helped this valued client with several elements of his financial plan, but had never considered income protection. Before he could return her call, the spouse called again to say her husband had died.
You might be thinking, “They didn’t need an individual DI insurance policy in this situation, after all.” You’d be right – but, what if? What if the producer had to return the call and admit there was a gap in the financial plan they developed together? What if everything they had planned for – retirement, college for their children – was now in jeopardy?
This was a turning point in the agent’s career. He saw this event as a second chance to do the right thing with clients and became a strong advocate for the importance of income protection. Throughout the rest of his career, he discussed the importance of both life and disability insurance. If clients chose not to purchase disability insurance, he asked them to sign a declination of coverage form for his files.
Opportunities in your block of business
Do you have life insurance clients you could call today to discuss the importance of adding individual DI insurance to their financial foundations? When determining who to call first, consider these characteristics of an ideal DI candidate:
- Ages 30 to 55 and in good health
- Earning at least $40,000 per year
- Employed in a professional occupation (e.g., limited manual labor)
- Dependent on their income to pay everyday living expenses
- Interested in protecting their income, their business, or their ability to save for retirement
To help narrow your focus, first reach out to clients with these characteristics who have recently experienced a life change, such as a new job, marriage, home purchase, or birth of a child. These common life events are ideal triggers for discussing the importance of income protection.
Also, consider clients who own small to medium-sized businesses. Not only can you offer individual DI to help protect their personal needs, but you can offer additional disability coverage to help protect their businesses and key employees, and provide employee benefits. In fact, a recent survey conducted by Harris Interactive and the Principal Financial Group indicates that business owners see business protection and income protection as two of their top three financial priorities.
There’s never been a better time to reach out to clients. After all, in just the last 10 minutes, 490 Americans have become disabled according to the 2010 edition of the National Safety Council’s Injury Facts. Help your clients today with their income protection needs. Unlike our colleague, you may not get a second chance to do the right thing.
Wayne Mohr is the disability income regional vice president of Principal Life Insurance Company; he can be reached at firstname.lastname@example.org. Reed H. Schnittker is the owner of The Plus Group of Texas; he can be reached at email@example.com.