Need to maximize your insurance sales? The next time you sell a life insurance policy to a client, be sure you include the Waiver of Premium benefit on the policy.
What would happen if your client was unable to pay for the premium on his or her life insurance policy? How would he or she be able keep the coverage in force for the beneficiaries of the policy? When a client buys life insurance protection, doesn't it make sense to avoid putting that protection at risk?1 The likelihood of becoming disabled is very real. Every four seconds, someone is disabled at home. Every nine seconds, someone is disabled at work. And every 13 seconds, someone is disabled in a motor vehicle.
A Waiver of Premium benefit allows an insured to stop paying premiums on the life insurance policy if he becomes disabled. This can be a great enhancement on any life insurance policy. The insured surely does not want the life insurance policy to lapse if he suddenly becomes unable to pay the premiums due to a disabling accident or illness. Also, if the accident or illness causing the disability is severe enough, it could increase the insured's chances of premature death -- making it all the more necessary to keep the life insurance policy in force. Many insurance companies offer this valuable provision on most if not all life insurance products.
An explanation of the Waiver of Premium benefit could also provide an opportunity for you to introduce the need for individual disability income (DI) insurance coverage. If your client is too sick or hurt to pay the premiums on the life insurance policy, how will he pay for things like mortgage and car payments, education expenses, utilities or other necessities? If he has Waiver of Premium on his life insurance policy but does not have adequate income protection, will he need a policy loan against cash values to meet his needs? What is the long-term effect on the policy you've helped him establish?
A key to increasing your DI insurance production is to ask clients with the Waiver of Premium if they understand how it works. Then ask if they have other monthly financial obligations such as mortgages, car payment, utilities, food and clothing. Sometimes a disability can be short-term and a quick return to work is possible. However, if an injury or accident causes a long-term disability, there are often additional costs associated with it such as long-term care expenses or the cost of hiring extra help to assist the family during a period of disability for the breadwinner. These extra costs could significantly increase the financial burden experienced by the insured.
Nearly six in 10 workers have not discussed how they would manage an income limiting disability.2 Make sure your clients understand how this important feature works and then ask them if they feel they are adequately covered for other financial obligations like the ones mentioned above.
What a great lead-in to a disability income insurance sale!
Ron Keller is Manager, Disability Income Insurance Competition and Market Research for The Union Central Life Insurance Company, a UNIFI Company, in the Cincinnati area.
