The individual disability income (IDI) insurance marketplace can be rewarding. Selling IDI meets a critical need for clients while creating long-term renewal value for you.
To extend your reach, think bigger and look for guarantee issue (GI) opportunities.
When you have several clients or prospects at the same company who are interested in IDI, then you may have the opportunity to turn that into a GI case. Whether layered on top of an existing group long-term disability (LTD) plan or standing alone, GI is, in my opinion, the most efficient way to get your prospects the income protection they need.
GI sales require no detailed medical underwriting and only the financial documentation included in census data. This opens the way for you to sell multiple policies at a single location with a much shorter underwriting cycle than if you were writing medically underwritten coverage. And GI policies are issued with gender-neutral rates and generally cost less than individual policies sold separately.
A single GI case can enable you to earn significant commissions within a single company.
How do you get started? Here are some tips:
- Focus on companies that have group long-term disability (LTD) plans. The most common use of GI is to supplement group LTD. Group LTD provides a valuable foundation of protection, but it often leaves higher earners needing more income protection. A company that has already made a decision to buy group LTD understands the importance of protecting income against illnesses and injuries.
- Target industries with the most GI sales potential. Focus on sectors with the most sales potential, such as legal and accounting practices, engineering firms, technology companies and investment management firms. These industries generate incomes such that the additional protection of GI coverage is needed.
- Consult your carrier. Leverage the expertise of your carrier, which can help you prepare for your next conversation with a prospect or client. Connecting with your carrier also can help fast-track the underwriting process — preventing hassles and saving time.
- Aim for cases of 20 lives or more. This is a sweet spot that helps the carrier provide the best offer possible. With that spread of risk, a carrier can make a stronger offer on the amount of monthly income it’s willing to cover.
- Look outside the executive suite. Consider a law firm with 100 employees but only 10 partners. To create a case with 20-plus lives, you could open up another class — for, for example, senior associates — for employees who have enough income to need additional GI protection.
- Promote the portability of GI as a recruiting tool. A benefit that the employee owns can appeal to today’s mobile workforce. Unlike group LTD, GI policies are issued to individual employees —so they can keep the coverage if they change jobs.
- If you have never sold a GI case, the first step is to decide to pursue this lucrative niche within the IDI marketplace. Talk to your carrier and ask for help with choosing the best prospective companies among your client lists, having that first sales conversation with the employer, and working through the design and implementation of the case. A GI case is your opportunity to sell multiple contracts with minimal underwriting.
Another tool: Teamwork
What are the ingredients of a successful guarantee issue sale for individual disability income insurance? Collaboration and creativity can make all the difference.
Here’s a story that highlights how carriers, agencies and brokers can work together to find solutions that meet the needs of groups of under-protected employees.
The partners of a law firm had a solid group LTD plan. Their salaries increased. The standard plan no longer provided enough income protection. The partners agreed with the broker’s proposal to add IDI on a GI basis, but they could not decide whether the coverage should be employer-paid and mandatory or employee-paid and voluntary.
The initial employer-paid offer was for a $6,000 monthly benefit that would be provided to all partners, but the cost was above the firm’s budget. An all-voluntary approach was more affordable; however, the decision-makers wanted to ensure that everyone selected coverage.
The solution was to offer an employer-paid, mandatory plan that provided a $3,000 monthly benefit, plus a voluntary employee-paid option for an additional $4,000. This fit the firm’s budget and provided the partners with the opportunity to buy more coverage with a GI discount and no detailed medical underwriting. Teamwork on the part of the managing general agent, the broker and the carrier provided a customized plan that met the law firm’s needs.