I have a lot of admiration for insurance producers of all stripes. I know what it takes to succeed in the business, and I know enough producers personally that I understand what kind of genuine commitment most top producers have made to their clients and their business.
But I’ve observed that among the most passionate and most driven producers are those who specialize in disability income insurance. It seems that, more often than not, the DI producers have an incident or two in their backgrounds that drives their desire to make sure no family pays the heavy price of a disabled breadwinner with no DI coverage. In fact, for the successful DI producer, the business sometimes seems more like a calling than a profession.
In this month’s producer roundtable, I’ve asked three of the nation’s top DI producers to share their thoughts on the state of the DI business. Here’s the lineup: Sherry K. Barton, CLU; Irwin C. Cohen; and Ann Baker Ronn, LUTCF.
Sherry K. Barton, CLU, is a seasoned insurance and financial professional serving more than 3,000 clients from New York Life’s Oklahoma City agency. In 2005, she was the first female recipient of the J. Hawley Wilson Trophy as the Oklahoma State Insurance and Financial Advisor of the Year. She is a 24-year member of the Million Dollar Round Table and has served on numerous MDRT committees, including finance, leadership development, media relations, U.S.A. network and mentorship. She chaired the MDRT Foundation grants committee and completed a three-year term on the MDRT Foundation board of trustees.
Irwin C. Cohen is a 33-year veteran of the retail insurance industry. He started selling accident insurance door to door at age 20. For the past two and a half decades, he has specialized in disability income protection and long-term care insurance, primarily working in the professional market. He is a four-time speaker at the MDRT. He is the author of the MDRT’s best-selling audio disk, “How to Make Top of the Table Selling Long-Term Care.” Cohen’s practice and home are in Chicago, where he lives with his wife Melissa and their daughter Mira.
Ann Baker Ronn, LUTCF, has been with The AFP Group in Houston since 1991 and counts helping people achieve financial success among her passions. She is a 14-year member of the MDRT with three Top of the Table qualifications. Ronn has served on the MDRT Foundation’s allocation committee and as a board member of the National Association of Insurance and Financial Advisors in Houston.
DI sales in 2012
Charles K. Hirsch, CLU: We’re well into the sales year at this stage, and I’m wondering whether you’re finding your disability insurance business pretty much meeting your expectations, or are you significantly ahead of or behind your projections? And as a follow up, are you optimistic about your business through the rest of year? Why or why not?
Sherry K. Barton, CLU: Now that we are one-third of the way through 2012, my disability income sales are not where they should be. As a 25-year agent, my client base has aged, and now, clients want to cancel their disability income policies because they have retired or slowed down in their professions. When they stop their disability insurance, they have to apply for long-term care.
Irwin C. Cohen: My disability business is off to a fine start. We are generally very systematic in our approach to what we do, so while business continues to be good in a general sense, it does not tend to ever meet my expectations. I believe we are on target with our projections, but we always like to increase our production and do more. I am very optimistic about business for the rest of the year for a number of reasons. The most significant reason for my clientele is that their portfolios are not worth what they were two or three years ago. The real estate market has also been hammered. Therefore, they are much more tuned in to the exposure they have, and thus, it is easier to make the case that protection is a sound decision that will benefit them.
Ann Baker Ronn, LUTCF: I’ve had lower sales but higher volume than expected. I am where I thought I would be in terms of projections. Yes, I am optimistic about my business through the end of the year, as I am focusing more on income protection. I have also joined a business networking organization, BNI Group, and I’m hopeful it will result in some new business.
Hirsch: What are the biggest challenges your DI business is facing right now, and how are you taking steps to overcome them?
Cohen: The biggest challenge facing my disability business right now is not from carriers or clients. The challenge is an internal one. We must determine how we continue to stay organized, see the people, and make the best use of our time for the best return so that we take advantage of the best opportunities.
Ronn: One of my biggest challenges is clients procrastinating. They see no sense of urgency to take care of protecting their largest asset, which is their ability to earn an income! I am working on handling this type of situation. I started using a very forward approach, emailing and asking the client or prospect if they want to move forward or not. It has worked in some cases. The email is worded like this, “I wanted to reach out to give you the opportunity to say ‘no’ to me, in case you are not comfortable moving forward.”
This is an excellent way to determine the seriousness of a client or prospect.
Barton: The challenge facing agents selling disability insurance is that the number of companies offering the product has dramatically changed. Many companies no longer offer the product, or they are offering a watered-down version of what used to be a Cadillac plan. Another challenge includes the fact that agents are not being trained to ask, “How long can you afford to go without a paycheck?” This simple phrase opens the discussion for disability income. I tell agents to remind clients that nothing works if you can’t! This refers to a disability, an illness or an injury that is preventing you from working. This policy will be there with money to feed your family, make your house payment and keep your lifestyle going. Talking about disability to our income earners is simply talking to them about what this product can do. New agents in the business need to be exposed to the product and find the company that issues disability. I have told new agents to write a plan on themselves, which teaches them how to run the illustration, the benefits that can be included and what the cost will be.
Finding the opportunities
Hirsch: As you look ahead at opportunities in the disability market and at where your business currently stands, where do you see the biggest opportunities? And how are you positioning your firm to take advantage of those opportunities?
Ronn: I think the biggest opportunities are educating clients about their group coverage and then explaining how they can improve those policies by taking a personal, portable policy out to supplement their group coverage. Also, it’s important to talk to clients about guaranteed renewable products, rather than a non-cancellable, to reduce cost and save money.
Barton: As I prospect, DI is always a part of my financial planning triangle. I explained this many years ago as a five-minute sales idea from the MDRT main platform at the annual meeting, and to this day, agents still remember me as the “triangle lady.” The foundation of the triangle is health insurance, disability income insurance, life insurance, and at the top, there are variable products. As an agent for New York Life, I use this simple triangle to explain to prospects who are new to the world of what a life insurance agent actually does and what we can do for families. The sales tactic I have used for more than 20 years is the annual review, and today it is often referred to as an economic update. We help families minimize risk, while maximizing efforts toward college, retirement or a particular goal.
Cohen: As I look ahead, I see opportunities in the disability market for all the white-collar areas we focus on. We do not tend to work in non-white-collar occupations. We position ourselves by taking great care of our clients in order to generate referrals and other business opportunities.
Hirsch: As you look at some of the recent changes in DI products, what do you think has been a significant improvement, and why? Also, in a perfect world, what would you like to see in a DI product that isn’t yet offered?
Barton: As high-quality companies offer the product, income protection levels are raised for many occupations. Offering income increases your ability to help a young professional get started with a plan. This has potential for his practice and income to grow, and he can have his DI policy to keep pace with his salary.
Cohen: Recent changes in DI products have all been very positive. If I compare the products I am selling today to what I was selling a decade ago, I now have catastrophic riders and retirement funding vehicles that were not available before. When I look at what actually happens for a client come claim time, the additional benefits of catastrophic and retirement funding create financial security and cash flow that were not available before. What I would like to see in a DI product that is not yet offered is policies for older individuals. I see people in their 60s wanting to purchase disability insurance, and it would be nice to have more options available for them.
Ronn: I believe a significant improvement has been the addition of features such as COBRA benefits and non-disabling injury benefits. These add more value to purchasing a policy of this type. However, I would like to see a more accessible policy issued that covers clients who are professionals — business owners — and have physical duties. We need to find more feasible ways to cover the middle market that doesn’t own any income protection at all. The LIFE Foundation is doing its best to promote the need for these products. I wish there was more education about how likely young people are to become too sick or hurt to work. How about a law to insure our most valuable asset, the ability to earn an income?
The argument for adding DI
Hirsch: What practical advice would you give the producer who has not yet made DI a part of his or her product portfolio but is interested in doing so?
Cohen: It is a wonderful business to be in. We are well paid and build renewals while helping people acquire something they need. However, you have to learn to walk before you can crawl. Find a good wholesaler who can help you learn the business and find some other successful disability producers who can help you learn. Set some goals and get busy.
Ronn: I would inform a producer that it is a natural add-on to life sales. If they include the waiver of premium feature on their life policies, it is an easy transition. For young clients, the odds of becoming too sick or hurt to work are much higher than death. It is important to bring this to their attention and educate them by asking a lot of questions.
Barton: The No. 1 rule is to study the product. As I mentioned earlier, learn by writing a policy on yourself in order to understand the questions clients will ask and the financial substantiation that will be needed. Money only pays for this product, but good health actually buys it. It is morbidity, not mortality underwriters are concerned about. Agents need to be able to explain this to their clients.