Back in the day, sailors had a phrase to describe the state of sitting motionless, with no wind to propel their vessels. Although you’ve probably heard the phrase, “dead in the water” many times, you’ve probably never thought about it in relation to your disability insurance cases. Am I right?
Well, here’s your wake-up call: It’s time to THINK! In the disability insurance (DI) industry, a whopping 30 percent of applications submitted are never placed – they’re dead in the water. Some are declined, some are not accepted by the client, and some never move forward due to incomplete fields or lack of documentation. And, that statistic doesn’t include the income protection applications that never make it to the point of submission. I would guess that at least 60 percent of sales appointments never result in an application submission.
How are you charting your disability insurance sales course? Are your cases dead in the water, destined to go nowhere? Do they have the momentum to reach a signed and delivered status? Is a pesky headwind interfering with progress? While sailors of yesteryear could do little to control the wind, you can do a lot. In fact, most agents make six critical SALES KILLING mistakes, while working their files. I’ll share three of them here. If you’d like to know the others, make sure to visit the Disability Insurance Services Website to download the full article.
Disability Insurance Sales Killer #1: Marketing to the wrong audience
There are several good audiences. They all have one thing in common – they are high-income earners who have a strong need to protect their paychecks. Whatever you do, don’t set your sites on low-income prospects. You’ll never set sail. Here are a few good audiences to consider when selling individual disability insurance:
- Traditional white-collar market – Consists of doctors, dentists, attorneys and similar professionals. One way to efficiently tap this audience is through professional and trade associations and hospital endorsements.
- Small-business owners and freelancers – Many in this audience earn very high incomes and do not have access to group insurance. Efficiently reach this group through professional associations, alumni associations and trade journal lists.
- The “sandwich” generation – These people are sandwiched between supporting both their children and their aging parents. Only target those with high incomes and appeal to their obligation to support their loved ones – no matter what happens.
- Dual income families – These people have twice as much income to protect, along with darling children who require all kinds of expensive indulgences for years to come. Appeal to their altruistic need to give their kids every advantage. Consider securing endorsements from private schools, sports associations and other venues trusted by families.
- Baby boomers – This audience is reaching peak earning power and peak obligation levels, financing vacation homes and college educations. When purchasing a marketing list, go beyond age and income level. Add additional demographic qualifiers, such as home value. Many online list companies offer advance selection capabilities.
- Never-marrieds, single parents and divorcees – As sole earners for their families, these people have no one to fall back on in the event of disability. They also may not have significant savings, making disability insurance an easy sell. Again, remember to market only to those who command high incomes.
Disability Insurance Sales Killer #2: Assuming need
Yes, high income is a prerequisite for disability insurance sales, but high net worth is not. In fact, those with a net worth in excess of $6 million usually have the means to pay for their expenses outright if they become disabled. Why would they waste their money purchasing a disability insurance policy? They won’t. There is NO NEED. Furthermore, many insurance carriers won’t even underwrite this type of prospect.
Also, watch for those with a high level of unearned income – i.e., income earned from rental properties or other investments. If unearned income is greater than earned income, the NEED for disability insurance is minimal. Unlike earned income that stops with disability, unearned income continues regardless of the person’s physical ability. Carefully assess this prospect’s needs before recommending a disability insurance policy. In many cases, these prospects are better suited for a critical illness or long-term care product.
Finally, make sure to carefully review the prospect’s existing disability insurance policies, including basic, employer-provided coverage. You never want to make the mistake of trying to overinsure your client. If disability coverage already exists, you’re probably better off recommending a supplementary plan to augment existing paycheck protection policies.
You’ll be dead in the water if you assume those with high net worth need disability insurance. Ask the right questions, navigate carefully and feel the wind at your back.
Disability Insurance Sales Killer #3: Selling Low Value/ High Cost
“You’ll receive a benefit of $4,000 each month, tax free – all for an annual premium of $4,500.” These words lead to the bitter end for many a policy. That’s because they compare a low denomination (monthly) value with a high denomination (annual) price.
It’s good to sell apples to oranges – but make sure you do it right! In my sales script, The Wealth Preservation Plan, I teach agents how to sell the highest denomination value for the lowest denomination price. By illustrating the high prices of items with lesser value, I increase the value of my offering in the prospect’s mind. For example, when I establish the daily cost to protect a $35,000 car or a $400,000 house and then I calculate the value of one’s paycheck from today until retirement (usually worth at least $1million), the prospect immediately expects the price of paycheck protection to be very high. I say, “If it’s worth $3.50 a day to protect your $35,000 car, how much is it worth to protect your paycheck from now until retirement?” Most believe it’s worth $10 a day or more. By the time I get around to revealing the disability insurance premium (in lowest denomination, cost-per-day terms) the prospect is amazed and relieved to hear that the coverage is so inexpensive.
