It’s a scenario that may be familiar to you: You and your client have decided to apply for an individual disability insurance (IDI) policy. You have the client’s signature; the application is submitted. You’ve worked with your general agent to ensure the application is ready for underwriting, and you feel good knowing you’ve helped your client realize that income is an asset worth protecting.
While most of the hard work has been done, the sale is not complete just yet. That’s because the next step on the IDI sales journey is underwriting, and IDI applications require underwriters to review a significant amount of documentation — such as medical history and financial statements — before an application is approved.
My underwriters and I are often asked how producers can help ensure their client’s application is well-received by underwriting. In my experience, optimal IDI underwriting requires preparation on the part of the producer, who needs to set expectations early for clients.
Whether you write one IDI policy a year or are a genuine IDI expert, here are five tips that may help improve your experience.
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1. Rely on a trusted resource.
General Agents are a great resource when selling IDI as they can help ensure you are prepared for the sale and how to set client expectations. General Agents are experienced, knowledgeable experts who can help you navigate the sales and underwriting processes, including how best to connect with your client and prepare him or her to provide the information that’s needed.
2. Know that not all underwriting is created equal.
Some producers assume that the underwriting process for IDI is similar to that of life insurance products. However, IDI requires a more detailed process because a different type of risk is being assessed.
To assess a client’s insurability for IDI, carriers need not only detailed medical history, but also a clear picture of your client’s financial and occupational history. IDI underwriters are investigating a person’s risk of becoming disabled, while life insurance underwriters are looking for conditions or activities that may increase the risk of death. Because the chance of becoming disabled before age 65 is greater, and the policies could potentially pay out large amounts over a long time frame, it’s important that the carrier does its due diligence to ensure that your client’s application has been thoroughly analyzed.
That’s why you may be involved in requests to help obtain the appropriate records and documentation. It’s important to prepare your clients ahead of the sale for the amount of personal information (think: medical history, financial statements, medical testing and job history) that will be needed for the carrier to analyze.