Of all the products you have the opportunity to sell, arguably the most neglected is disability income insurance. The need is blatant for a wide range of age spans and income earners, and the product is affordable. Yet, too many good producers overlook the opportunities. What gives?
That’s the age-old question — although it’s not always asked in that way. For years, the industry and our society have suffered, I believe, because the need for income protection in the event of a disability has not been adequately filled.
But don’t blame this month’s panelists for those shortcomings. These three top producers are among the best in the business. Fielding my questions about what drives their passion for the market, the opportunities and challenges they face, and their practical advice for other producers looking to grow their DI business are the following: Robert L. Avery, CFP, CLU, ChFC; Peter R. Magni, LUTCF; and Larry Schneider.
For the first part of this roundtable, see:
Overcoming DI sales challenges
Q: What are the biggest challenges your DI business is facing right now, and how are you taking steps to overcome them?
Magni: There are several challenges I have observed in my disability income protection business. First of all, as some of my clients approach their mid-fifties, they do not see quite as much of a need to continue to protect their rising incomes. Since they have been protecting their incomes throughout the years and nothing has happened to them, they seem to feel they don’t need to continue increasing their coverage. I counter that feeling with real-life issues, such as the fact that six of my physician clients in their fifties have been disabled in the past 15 months, all by illnesses. Since only two of these six will fully recover, they understand the importance of this great product.
The second challenge is the fact that younger physicians have so much debt they don’t seem to think they will ever be free of it, which makes disability income protection not as important to them at this time. To overcome this mentality, I use examples of younger physicians who have been disabled as a means to get the point across.
These challenges certainly are not exclusive to the medical marketplace, but they permeate through the professional marketplace in general. In studying how to combat this lack of understanding for the need of this great product, producers need to get familiar with the Council on Disability Awareness, which provides very meaningful statistics in this area of disabilities.
Schneider: The biggest challenge I currently face when selling individual disability income is trying to convince other agents how important it is for their clients to have this product and to get the industry more involved. To overcome this malaise, I have written more than 50 DI articles, some of which have been published by Life Insurance Selling, including an eight-part series that covers all aspects of selling DI. I also conduct seminars to teach others what I know, based on my 35 years of exclusively selling DI, and have written three manuals on the subject, hoping some of my knowledge can be transferred.
Avery: The biggest struggle my DI business is facing is convincing people they aren’t bulletproof, and then persuading the underwriter that the client is bulletproof. I have learned over the years to do better field underwriting and to lower the expectations of the preferred underwriting to the client by asking more in-depth health questions to determine whether the client is a candidate. When the underwriting decision comes back the same as applied for or exceeds my expectations, it makes for a better sale.
Q: As you consider the opportunities in the disability market and 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?
Schneider: I have positioned my firm to be on the cutting edge of promoting IDI by establishing a national resource for providing solutions for hard-to-place applicants, providing seminars, and writing articles. Some hard-to-place conditions that can be provided have to do with applicants being overage or overweight, having health issues, making too much money, making too little money, holding a dangerous occupation, working abroad, working within the home, working for the federal government, being previously declined, having drug and alcoholism issues or mental and nervous issues, and many other issues.
Avery: The biggest opportunities I see are with the changes in our clients’ employment status. During times of recession, we tend to see more startups due to people being let go and embarking on a new career. We are conducting annual reviews and making sure we are aware of company layoffs in the area. This helps us to advise clients to make up for the short falls in not having some of the usual company benefits, which usually include DI coverage.
Magni: The biggest opportunities in the disability marketplace still lie in the great underserved professional occupations of attorneys, accountants, architects and engineers. These occupations tend to have the highest occupational classifications and, therefore, the lowest premiums. Physicians have had a change in morbidity and disability statistics over the years, and as a result, they tend to have higher premiums than the other occupations. The way I can combat that issue is by working with younger physicians with higher classifications and lower premiums to keep the flow of business coming.