There’s a perception that individual disability income (DI) insurance can be a difficult product to sell.
Financial professionals often focus on selling the product to medical professionals, in part because medical professionals see for themselves, while working, why insuring the ability to earn a living is so important.
But, for professionals with the right strategy and tools, branching out and offering DI to other types of consumers can be very profitable, and very important to protecting the financial security of your clients.
Some of the consumers who need to hear about disability insurance more often are engineers.
More and more Americans are living paycheck to paycheck, and engineers are no exception. Most are hugely dependent on earning a steady income. In fact, over a lifetime, engineers on average earn more than $3.7 million. That means that, in most cases, their ability to stay healthy and earn an income throughout their lives is their greatest asset.
For insights on what the engineering industry is like, strategies for finding prospects in that sector, and ideas about how to approach conversations with prospects who happen to be engineers, read on.
1. Who are engineers?
Engineers design and produce across all industries. They’re responsible for creating everything from the latest iPhone to the rovers crawling around Mars. Computer science, a division of electrical engineering, is one of the fastest growing professions in the world. Other engineers are in specialties such as mechanical engineering, chemical engineering and civil engineering.
Over the next 10 years, the number of jobs in the aerospace, chemical, computer hardware, electrical and mechanical engineering sectors should grow an average of about 11 percent. Analysts are also expecting to see higher-than-average growth in the civil, environmental and industrial engineering sectors.
Engineers earn an average of over $100,000 in annual income. To prepare themselves to earn that income, they take out an average of $30,000 in college loans. They will face serious financial consequences if they cannot pay off that student loan debt.
Engineering is fiercely competitive. Should your clients need to leave work due to illness, they may find re-entry into the work force challenging.
Simply to prepare for a short, three-month disability, a typical engineer who is earning $100,000 per year may need to have $25,000 set aside for a rainy day.
2. Where are engineers?
One way to find prospects in the engineering sector is to use the advanced search tool on LinkedIn. Search users by occupation and location.
Another way is to filter a business database such as Hoovers, ZoomInfo, ReferenceUSA or the Better Business Bureau directory by geography and business type.
The more traditional approach is to get involved with groups that appeal to engineers, such as civic groups, or local chapters of the IEEE. In California, some of the major organizations for engineers include the California Society of Professional Engineers, The Engineering Society of UCLA and the Cal Civic Engineering Group on LinkedIn.
And don’t forget to go through your existing book of business.
3. Why individual DI?
Engineers often have group disability coverage, but group coverage isn’t enough. Group plans usually have a benefits cap, lowering the amount of benefits highly paid engineers can receive.
The typical group long-term disability (LTD) plan only covers a worker’s salary. The plan will not cover bonuses, commissions or other types of remuneration.
If an employer pays the premiums for disability coverage, the beneficiary usually has to pay taxes on the benefits. The holder of an individual disability policy can collect the benefits free of income taxes.
4. What do prospects in engineering need to know about disability insurance?
None of us plan to become disabled, but the sobering reality is that nearly one in four of today’s 20-year-olds will be disabled by the time they reach retirement age. In other words: If your client is an engineer in a two-engineer partnership, there’s a 50 percent chance that one partner will be disabled by the time the partner reaches retirement age.
Even the engineers who have heard of disability insurance may associate it with coverage for accident claims. In reality, only one-fifth of disabilities are caused by accidents. Most are not work-related, and they are not covered by workers’ compensation.
Here are some other key facts that any individual disability insurance prospect should know:
Customers can buy coverage options to protect their ability to pay off student loans and keep up retirement plan contributions.
The earlier clients buy coverage, the lower the cost will be.
Some policies are non-cancelable and guaranteed renewable, meaning that the policy cannot be changed or canceled as long as premiums are paid.
Your client owns the policy. So, no matter where the client works or who the client works for, the disability policy can stay with the client.
5. How do you prepare to talk to engineers?
Make sure you know your facts and have visual aids, such as marketing pieces, to help emphasize your points. An illustration is helpful too. Engineers will like to see the numbers.
Use real life examples. Most people can think of someone they know who had cancer or a heart attack. Get real people who have benefited from having disability insurance to sign HIPAA privacy waivers giving you permission to tell their stories, then tell their stories.
6. How do you engage engineers?
Remind engineers that disability income insurance is not a luxury. It’s a critical part of any insurance plan or financial plan. Encourage your clients to use online tools such as my own company’s income insurance calculator to learn more about cost expectations and protection benefits.
Start with this key question: “What if you lost your biggest financial asset, your ability to work?”
Talk the scenario through with the prospect.
If the average person is off work for a minimum of three months for a disability, what’s your client’s emergency strategy? That conversation will set the tone for your discussion and help your client to start planning strategically for the future.
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