InsuranceNewsNet
By Jill Frohardt March
14, 2019
Many advisors would
agree it’s important to inform clients about the importance of individual
disability insurance. After all, income protection is a near-universal priority
for those worrying about their futures. However, it can be difficult to discuss
income protection and effectively propose a need for additional insurance.
You may be leaving
money on the table — and exposing clients to risk — by not offering a product
that can help protect your clients’ paychecks and maintain their standard of
living. Fortunately, there are multiple ways to have a meaningful conversation
about IDI with those who might otherwise pass on valuable income protection.
In fact, it might
be easier than you think: One of the simplest ways to start a conversation
about IDI is to tactfully pivot from a familiar product that you’re already
discussing. By using the following three insights, you can pivot the
conversation to IDI with your clients.
Approaching Clients
Although IDI is
beneficial insurance coverage, not everyone is an ideal candidate for it.
People with high net worth (more than $10 million), who are older than 60 or
who derive most or all of their income from passive sources (e.g., ownership of
rental properties) are not eligible for or do not require IDI.
However, clients
younger than 60 who generate most, or all, of their earnings through full-time
work and depend on those earnings to maintain their standard of living should
certainly consider added income protection. Candidates in great need of IDI are
business owners and people in white-collar occupations earning above-average
incomes.
Positioning The Need
IDI contracts, with
their unique array of provisions and choices, may seem daunting at first
glance. It is natural to be reluctant to bring up a product that you are not
familiar with, as it may confuse clients even more.
Instead of
approaching IDI with hesitation, focus on the need for income protection rather
than a complex solution. First and foremost, educate clients about the
importance of preventing financial loss or ruin in the chance they are too sick
or hurt to work for extended periods of time.
Once you have your
client’s interest, rely on one of the many IDI brokerage agencies around the
country to be your expert for IDI support. There is nothing wrong with using
top industry experts to provide income replacement solutions that fit your
clients’ specific needs — chances are, your clients will feel relieved knowing
you’re in contact with experts, too. In many cases, it’s as easy as starting
the conversation to pique your clients’ interest and letting IDI specialists
help you do the rest.
Starting The
Conversation
Choosing how to
start the conversation can be daunting. But you don’t have to begin the
discussion about IDI immediately. Instead, try transitioning from another
product or service that you’re more comfortable speaking about or are already
discussing. Here are several ways to naturally pivot toward IDI from another
product.
·
Life insurance: “Congratulations on putting
this life insurance policy in place and helping provide for your family if you
are not here to do so. What if you survive a serious illness or injury? How
will you take care of your family if your health impacts your ability to work?”
·
Financial plans with periodic contributions: “The best financial
plan in the world will only survive as long as your income does. Before we part
today, let’s plan to ensure you can still make ends meet even if you cannot
earn your usual income. Otherwise, all this planning we just did could be for
naught.”
·
Long-term care insurance: “It is likely
that the need for long-term care will arise later in life. But how would your
income continue if some serious illness or accident strikes during your working
years?”
·
Individual health insurance: “This health
insurance will make sure the doctor, hospital and pharmacy get paid. But if you
get seriously sick or hurt, who will make sure you get paid?”
No matter how you
approach selling IDI, the most important thing is to start the conversation.
It’s impossible to communicate how important it is if you don’t discuss it in
the first place. This may be difficult at first, but when it comes to
insurance, difficult conversations are often some of the most important.
Meaningfully
engaging clients about IDI ensures they can prepare for life-altering events
such as illnesses or injuries. When unfortunate events like these occur, every
solution should be on the table — IDI included.
Jill Frohardt is
second vice president of IDI sales with The Standard. Jill may be contacted
at jill.frohardt@innfeedback.com.
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