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April 05, 2013 at 01:17 PM
I have the greatest job in the world. Every day, I help producers unlock their sales potential by sharing the advantages of selling income protection solutions — specifically, individual disability income insurance (DI).
After all, what other insurance product:
- Protects everything clients have in life, including other solutions they’ve purchased from you?
- Is not marketed by most other producers? Income protection offers you a perfect opportunity to become a trusted resource for all your clients’ financial needs.
- Is something almost everyone in the working population needs? According to the U.S. Census Bureau, there are more than 55 million people in the United States, between 25 and 64, earning $40,000 or more annually. Only 7.4 percent have individual disability policies, according to LIMRA. That means 93 percent of workers don’t have enough income protection.
Now is the perfect time to bring clients’ attention to income protection. The country’s recent economic struggles are still fresh in many minds. Americans know the threat of losing their income first-hand. They understand how being unable to work and earn an income could dramatically change their financial situation. More than ever, these individuals are taking risk protection strategies to heart and are looking for ways to minimize the impact of a financial disruption.
Historically, most DI sales were made to high-income-earning occupations like attorneys, dentists and medical professionals. Now, more carriers are helping producers reach new and untapped market opportunities, such as workers earning less than $100,000 a year and occupations that show promise due to their income-earning potential, business ownership and ability to provide referrals.
Bring it up
Most producers don’t talk about income protection. That’s unfortunate for clients, but fortunate for you. You can be the superhero who saves the day by helping your client protect his or her most valuable asset: the ability to work and earn an income.
Nearly anyone in the working population is a good candidate for income protection. Here are a few ways to start the conversation with a prospect.
- “Can you afford to retire tomorrow? No? Not many of us can, but that’s what happens when you become too sick or hurt to work and can’t earn a paycheck.”
- “We’ve all seen fundraisers held for someone who’s ill or injured and needs financial help. I know I have, and I don’t want that to happen to you. Let’s make sure you have a Plan B in place, so you can rely on your own protection strategy and not others.”
- “Life is unpredictable. We don’t know what tomorrow will bring. But, you can prepare for the unexpected. That’s why we have risk protection. Think about the things you insure. Which one of those things is your most valuable asset? It’s not your car or your home — it’s your paycheck. If you’re not protecting that, you could be putting millions of dollars on the line.”
- “Do you know anyone affected by a layoff? How did that person make ends meet? What would you rely on if you were no longer earning an income? While people can’t protect their income from the threat of a layoff, they can protect it from the threat of an illness or injury.”
Don’t be afraid to tie in our country’s recent economic struggles to drive home the importance of risk protection.
The best advice I can give is to simply ask clients about their income protection strategy. Most people don’t realize they have an income-protection gap. Take, for instance, your clients who have group long-term disability (LTD) through their employer. Most of them probably couldn’t tell you what the benefits are or how they work. Some may not even realize they have benefits at all! If they do know the details of the coverage, they typically don’t realize they still likely have an income-protection gap.
Nearly all group LTD plans replace 60 percent of an individual’s income, up to a set monthly cap — before taxes. To show clients what this means, ask them to take their income and divide it in half. That amount is roughly what they could expect from their group benefits after taxes. It’s a nice start, but for most, not nearly enough.
Keep it simple
The most common objection to selling income protection I hear from producers is that it’s too difficult. It’s not! And it’s especially not complicated when you “Keep It Super Simple,” or KISS.
During the sales conversation, talk to your clients about the need for income protection. Then describe what an individual DI insurance policy does — provide a monthly check in the event of an unexpected accident or illness.
During those initial talks, don’t get caught up in the details. I coach producers that there are five things clients should know about their DI insurance policies.
