No Thank You, I Don’t Need Disability Insurance…


You know the value of disability insurance, and so do the people who own policies. But the biggest advocates might be the ones who have filed claims on those policies, as well as the families who benefit from the decision to protect future income from unforeseen accidents.

Yet all this appreciation won’t help you when you’re discussing DI with a prospect who isn’t convinced of its value. Many people have unique situations that make it difficult to demonstrate a need for this product. Knowing how to react to those special circumstances is often the difference between leaving with an application and leaving empty-handed.

Let’s look at three types of prospects you’re likely to encounter when presenting disability insurance, as well as advice and insight from experts to help you overcome their objections and close more sales.

Case No. 1: The prospect who already has ”something through work”

The important thing here is to find out what that “something” is — because there’s a good chance the prospect doesn’t understand the details. According to Craig Gussin, president of the International Disability Insurance Society, too many prospects with coverage through work don’t really know how much — or how little — the policy actually covers. 

“People will spend more time planning a vacation than they will looking at their benefits package,” he said. They might not understand that the policy often only covers a percentage of salary (not bonuses), takes several months to go into effect and has tax implications that would not exist with a personal policy.

All of these factors help determine value. His solution? Gussin encourages agents to examine all the gritty details, so they can reveal the true nature of a prospect’s work policy. “What they say is ‘I have disability insurance through work,’ and I say ‘OK, let’s see it,’” he said. “Anybody who is a disability insurance specialist will be able to sit down with you and, in 10 minutes, be able to tell you exactly what benefits you have. Not what you think you have, but what you actually have.”

Once prospects realize their coverage isn’t as strong as they thought or hoped, they should be more receptive to hearing about affordable alternatives that can make up for those limitations.

In fact, Gussin said there are even advantages to meeting with someone who  already has a level of protection in place. Since most people have no disability insurance at all, at least you’re sitting down with someone who has been introduced to the coverage, recognizes some benefit and enjoys a degree of protection. Instead of spending time introducing the concept, you can provide valuable information about the existing coverage, highlight its deficiencies and offer solutions. 

Case No. 2: The young prospect who doesn’t see a need for disability insurance

Young, healthy people aren’t usually eager to think of themselves as disabled and unable to work. So, according to Professor Kevin Lynch from The American College, the key to working with these prospects is getting them to describe their alternate plan for replacing income.

“You know what the response is 100 percent of the time? ‘I don’t really have one,’” Lynch explained. Getting these prospects to vocalize a lack of planning and preparation can highlight a gap in their coverage using their own words and can pinpoint an inconsistency in their financial program. Paraphrasing their answers back to them can have even more impact, since they’re hearing it from someone else.

Going further, Lynch recommends suggesting several possible outcomes of not having a plan, such as being forced to move in with parents or obtain loans if they’re unable to work for an extended period of time. And, while he doesn’t believe in using too many statistics, Lynch said that it would be appropriate to point out that they’re more likely to become disabled during their working years than they are to die. For young prospects — especially those who already see the need for life insurance — this understanding might cause them to consider adding disability insurance to their portfolio.

The purpose of this exercise is not to scare a prospect or to use numbers to counter their arguments. Lynch believes that the goal is to make the prospect take the risk of disability seriously, and be realistic about the cost of not having a contingency plan. Once reality sets in, the need for DI often becomes apparent, and an affordable solution will be attractive even to young, healthy prospects. “If you can do that, then most of the time if you have a real prospect, you will have a client,” he said. 

Case No. 3: The prospect who is also a business owner

Both Lynch and Gussin believe these are prospects worth seeking out, because they’re probably not going to need one disability insurance policy: It’s likely they’ll need two or more.

Business owners are cost-conscious and won’t be eager to spend money on insurance policies they don’t think they’ll need. But they’re usually interested in seeing their business continue if they’re unable to work, and that creates a need for a business policy in addition to their personal requirements. 

The business policy becomes especially important if the prospect is the focal point of the business, as is the case with doctors and other white-collar professionals. For businesses like these, losing six months of work jeopardizes the entire operation.

“If they’re disabled for a period of time, they might not have a business in six months,” Gussin explained. “They’re going to have to hire someone to come in and replace them.” Adequate disability coverage ensures that the business and its employees continue while the prospect is unable to work.

After that need has been covered, Lynch believes a business owner will likely consider a personal policy to cover their own income. “Once they’ve taken care of their business, then they’re going to be inclined, if they have the dollars, to go ahead and take care of themselves, too,” he said.

Lynch acknowledged that getting in the door might be an obstacle, and said that obtaining a referral introduction is the best approach. If that’s not possible, he suggests focusing on a specific group or trade association where you might have some background in common or specific knowledge regarding their needs.

A solution for every circumstance

Both Lynch and Gussin are adamant that agents should make the effort to incorporate DI into their proposals whenever it seems appropriate.

In fact, Lynch believes that if agents think it’s too difficult to sell disability insurance, they’re only selling themselves short. “Disability insurance is very undersold, and it’s also underpurchased,” he said. “It is no more difficult to be a professional in the disability arena than it would be in long-term care or life insurance or any other thing you really wanted to know about.”

Gussin agrees, noting that agents ignore disability insurance at their own economic peril, providing opportunities for other agents with more knowledge and confidence. “I think a lot of it is psychological. ‘I can’t sell it, I never could, my clients don’t want to spend the money,’” he explained. “Well, you know what? If you don’t, someone like me is going to walk in and close the sale.”  «

Michael Murillo is a freelance writer and frequent contributor to the Agent’s Sales Journal.


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