Four Steps to Overcome DI Objections
As a financial planner, helping clients to assess and manage risk is a major part of my role. Contemplating the loss of earned income due to an accident or illness is never pleasant. But would that young dentist be able to maintain his lifestyle if an unexpected injury meant he could no longer work in his practice? What about the high-powered executive—how long could he keep up with his mortgage payments if he were suddenly ill? Or all of those small companies where the business owner is truly the business, too. How long would orders be filled, bills be paid and payroll be met if he or she were absent due to an illness or injury? Sure, all professionals “hope” an illness or accident won’t happen to them. But while hope is a compelling political slogan, it’s a very poor risk-management strategy. So, how do you assist clients in making the choice to purchase disability income protection, particularly those who are concerned about price?
Beyond Hope: Let Reality Set In
First, help your clients realize it really could happen to them. There are numerous sources which provide excellent statistical information regarding claim probabilities—and I use them. Stories of real clients, though, who have actually made claims on their disability insurance, seem to resonate on a deeper level.
Here are a few examples that I use often:
- One man in his 30s purchased a disability-income policy, along with life insurance and retirement plans. As the application was still in underwriting, I received a phone call from him. While exercising on his lunch break, he fell and seriously injured his hip. He was out of work for months but that DI policy helped sustain his family until he got back on his feet.
- Another client in his 60s, nearing retirement, was funding his 401(k) plan during his highest earning years. A medical condition came on that precluded him from operating the equipment on his job. He was forced to take an early retirement and draw from his disability insurance. Fortunately, both families avoided devastating consequences because they had insurance in place.
Advocate from Their Point of View
After helping my clients understand their risk of disability and the benefits of protection, I’ll simply tell them that buying insurance may not be the right thing for them to do. They’re already not likely to buy disability income protection or else they would have it. Many clients feel “insurance poor” already—paying for car, home, business, life and health insurance.
However, acting as their trusted advisor, I would suggest we look at what is “at risk.” What would happen to your business if you couldn’t show up for work one day? How would you pay for simple necessities—a place to live or groceries? Where would the money actually come from? Are there accounts you could draw from? What asset would you liquidate first? Would you use credit cards or get a loan? How quickly would the line of credit from the bank dry up if they realized you were unable to work? How would you pay it back? Most likely the client has never thought about these things in depth. But now, they are faced with considering what they personally have at risk, rather than just hearing statistical information and stories. This is when they will ask about pricing.
Work Backwards to Develop a Plan
We often fall into the trap of gathering the appropriate information to “work up some numbers” and then come back with a maximum-benefit package presentation. We sell them on the greatest benefits, but trap ourselves (and do our clients a huge disservice) because they cannot afford the benefit package presented. Then, when we transition to a lower cost option, they’re often not interested because they’re sold on the higher benefits.
We would be better advocates for our clients if, when they ask about pricing, we were to instead discuss what they truly felt they could budget for this risk protection. After obtaining a reasonable premium commitment, we can then customize a disability insurance product to best fit the client’s needs and budget.
Let the Client Lead the Way
Several years in the industry, along with a broad professional network through the Million Dollar Round Table (MDRT) and other resources, have taught me that clients can be apprehensive about acquiring protective products, even when all the facts are on the table. But by taking a budget-focused approach and allowing clients to set the parameters, I am able to assure them their income is protected.
Damon Winter, LUTCF, CFS, a five-year member of MDRT, is an independent financial planner with local businesses and families.