How To Boost Your Disability Insurance Enrollment Rates

Published in the March 2011 issue of BrokerWorld magazine by Thomas R. Giddens, a senior vice president, director of sales for Aflac.

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If you were able to offer consumers an insurance policy that would protect them from ever being laid off, you’d likely see 100 percent enrollment rates. Yet brokers are acutely aware of the fact that most consumers fail to make that same commitment to income protection when it is labeled disability insurance.

Given that 87 percent of consumers say they like to be prepared for any situation (2011 Aflac Work Forces Report), selling disability insurance should be far less challenging than it is today. But the reality is that for many brokers, there is great difficulty in educating consumers about the benefits to income protection and the acceptance of their potential risk for being disabled.

This disconnect is very clear when you consider the enrollment rates for disability insurance at the worksite. Of the 61 percent of companies in Aflac’s survey that offer disability insurance, only 37 percent of workers are enrolled. Further, nearly one-third of workers say they have no confidence in their abilities to cope with the financial impact of possible events, such as disability.

As you begin to set 2011 sales goals and forecast activity levels, the practice of identifying a healthy supply of prospects will help to achieve premium goals. Simply put, the more prospects, the more opportunities to improve closing ratios.

There are two distinct segments of consumers—singles and women—who are not only in great need of the insurance product, but who also seem to be untapped markets.

Single, Never-Married Workers Often Overlooked. Many consumers assume that single workers are less in need of disability insurance coverage. However, for single consumers, there is arguably more of a need for financial protection in the event of a disability. Although they may not have family to consider, single workers will still need some form of financial income to sustain their lifestyles if they become disabled and don’t have a spouse to rely on.

According to Aflac’s recent study mentioned earlier, more than half (53 percent) of single workers say they are not very/not at all prepared to pay for out-of-pocket expenses in the event of an unforeseen accident or illness. Meanwhile, they are more apt than their married counterparts to believe it is likely they will become disabled in the future. Furthermore, single workers are the least likely to be enrolled in disability insurance compared to married workers (29 percent versus 33 percent).

Beyond the Means, Women Also Have a Greater Need. Such a scenario and opportunity exists when it comes to women and disability insurance. There are several factors at play that clearly illustrate the need for women to secure disability insurance coverage, including their growing roles as breadwinners and decision-makers.

Not only do women make up the majority of the workforce, they are also beginning to take on more responsibilities for family decisions and finances. A recent survey by GfK Roper for NBC Universal found that 65 percent of women reported being their family’s chief financial planner, and 71 percent called themselves the family accountant. Also, according to a Mediamark Research and Intelligence survey, they make 75 percent of the buying decisions in American homes. (What Women Want, Nancy Gibbs, TIME Magazine, October 14, 2009.)

According to the Journal of the American Society of Certified Life Underwriters, a 35-year-old woman in a professional position is three times as likely as a man of the same age to become disabled for 90 days or more. That’s a sobering and relatively unknown fact—one that should be made known to women. Given the reality that many women are becoming breadwinners and often the sole income provider, adequate disability coverage is a must-have for those seeking to protect their high incomes and to ensure financial stability for their families in the future.

Many women underestimate their risk of experiencing a disability and overestimate the resources available to them in such an event. The Aflac study found that only 28 percent of women are enrolled in disability insurance compared to 35 percent of men, and they are less prepared to pay for out-of-pocket expenses associated with an unexpected illness or accident (55 percent of women say they are not very/not at all prepared).

Both Women and Single Workers Need Better Education About Benefits Options. Although many women and single workers assume they have coverage through their employers, a growing number of companies are including disability in their cutbacks, as they grapple with rising health costs. While disability insurance has traditionally been a staple of workplace benefits packages, the recession has caused many companies to scale back the amount of coverage or to remove it altogether.

Adding to the challenge is the fact that many of these workers are not receiving the education or information they need about their benefits options. According to the Aflac study, only 57 percent of single workers get their benefits information from brokers or benefits consultants, compared to 72 percent of married workers. And nearly one-quarter (23 percent) of single workers and female employees say they are not very/not at all informed about their benefits options.

Agents and brokers should offer a full education of what disability insurance can truly protect and can remind these workers of the following:

• Loss of income makes it impossible to build retirement savings.

• Without sufficient income, consumers may be forced to withdraw from retirement accounts to pay for current expenses.

Target Independent or Women-Owned Small Business Owners. You can also help build your book of business by introducing and explaining the voluntary benefits solution to businesses. According to the Aflac study, only 30 percent of small businesses (3 to 99 employees) currently offer disability insurance.

For companies under financial strain and pressure to cut costs, voluntary short term disability insurance is available as a no-cost solution for employers who want to maintain disability coverage options and thus, financial protection for their employees. Voluntary disability insurance is a way to demonstrate a company’s commitment to its workforce without breaking the bank.

Small businesses are significant in number and are often referred to as the engine of the American economy. However, most small businesses do not carry group disability insurance; therefore, you have an opportunity to introduce a variety of product solutions to these organizations, including group short term disability or individual short term disability plans.

Voluntary insurance providers vary in their product offerings, so it is important to seek out those that are best suited for your specific client. In general, there are several key benefits of voluntary plans that will resonate with small businesses:

• Ease of Administration. Voluntary insurance providers are offering platforms that present easy administration and enrollment, including electronic platforms to offer employees a user-friendly option to managing their policies.

• Low Participation Minimums. Group short term disability can be offered to accounts with either five applications or 15 percent participation, whichever is greater. This means that customers with 35 or fewer employees can make group short term disability insurance available with just five applications.

• Guaranteed-Issue. This feature allows all active full-time employees to qualify for coverage (subject to income requirements) without having to pass underwriting.

Prospecting for new business is never easy. In even the best economy, successful prospecting takes perseverance, determination and thick skin. However, brokers and agents should not overlook the market need among women and single workers for disability insurance coverage.

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