Until recently, disability insurance market was mainly targeted toward affluent households, those with annual earnings of more than $100,000 and those with specialized or highly skilled occupations like physicians, dentists, and attorneys. Throughout the years, products and benefits, pricing and affordability, and the marketing and sales approach have been geared to suit the affluent market.
However, now that disability insurance sales have plateaued, carriers are looking to new markets to show growth. Enter the middle-market. According to the US 2012 Census, 48 million households are considered middle income; households with annual earnings of $35,000 - $100,000. The middle-market segment is more than twice the size of the affluent market.
And guess what? Very few producers are talking to them about disability insurance or better said, “income protection.” Entering this market is relatively easy. In fact, you probably have a considerable number of middle-market clients in your practice.
Let’s look closely at the facts that impact the middle-market.
- 53% of employer benefit packages do not include long-term disability insurance (LIMRA)
- 76% of Americans are living paycheck-to-paycheck (Bankrate.com 2013)
While the premium for the typical disability insurance policy would be prohibitive to your middle-market clients, carriers are now adjusting the pricing and coverages of disability insurance products to make them more affordable. Benefits that are essential in the affluent market may be just not that important in the middle-market. For example, carriers can make the coverage more affordable by limiting coverage conditions that drive higher premiums. The “Own-Occ” coverage definition is important for those in specialized occupations. Middle-market earners are more than likely well-served with the simpler “Modified Own-Occ” or “Any-Occ” definitions. That’s because someone who works in an office setting might be able to transition to a job that accommodates duty limitations with little to no impact on earnings. Not so, for a physician or an attorney. Download the Own-Occ Oversell Quick Tip for more on this issue.
Which of your clients should you talk to about disability income?
Most of your working clients need help, but let’s narrow the field initially.
- If you work primarily in personal lines, talk to all your homeowner clients. According to a study by Harvard Law School’s Christopher T. Robertson, medical situations contribute to almost half of home foreclosures.
- If your practice focuses on life insurance, talk to the clients you worked with on a mortgage protection policy. You can also request a disability insurance quote to present as a supplement to every life insurance quote.
- If your specialty is health insurance, talk to your clients in their prime earning years, Gen X and Gen Y clients. They have the most income to lose because their earning years are the longest.
How should you start the conversation?
Many middle-market consumers are unaware of the risk associated with being off work due to disability. Start the conversation with a “Did You Know” question to pique their interest. DisabilityCanHappen.org has a short downloadable quiz you can use to raise disability awareness with your clients. You can also show them this insightful infographic as part of your presentation.
Targeting the middle-market for income protection isn’t so farfetched:
- The market is large
- Carriers are moving down market
- Carriers are adjusting products to meet the market
- You already have middle-market clients in your practice
- It is easy to transition the conversation from your primary practice area to disability insurance
And most importantly, DIS is in your back pocket, with the products and support you need to target the middle-market with suitable disability insurance products. Request a disability insurance quote today, and let us know how we can help you be successful.
“Disability Insurance is a hard sale!”
“No one wants to buy disability insurance!”
These are some very familiar comments from agents who specialize in other lines.
Fortunately, there is a very powerful solution.
LET THE CONSUMER EXPRESS INTEREST FIRST!
With our free lead generator tool, you can maximize your presence on the Internet, and on social media to capture the attention of consumers WANTING to protect their INCOMES!
This tool is an icon asking “Is Your Income Protected?” which leads to a few simple questions.
Once the consumer answers the questions, we get what we need to send you disability insurance quotes. You get their contact information. All that is left is a call to say, “I see you are interested and I have solutions, when can we meet?”
The best part is when consumers knocks on YOUR door, they are READY to buy from YOU!
Place this tool everywhere you are able to and let the consumer responses prove DI Sales are easy!
P.S. The same tool can also be sent to prospects via email through our free Brokers Computer Assisted Marketing (BCAM) program. This video explains the details!
We all remember the 90s classic, “Men Are from Mars, Women Are from Venus.” Written by American author and relationship counselor John Gray, its central thesis is that the most common relationship problems between men and women are the result of fundamental psychological differences and the distinct way each gender responds to situations.
It’s no different when it comes to paycheck protection.
When it comes to financial planning, Americans can be fickle. And there are fundamental differences in how men and women approach it. Women perceive their risks differently and have different priorities, habits, and needs than men, so connecting with them requires a different approach.
That’s the first reason why you need to know how to market to women.
The other reasons are even more compelling. For example, did you know that the “protection gap” caused by not having paycheck protection is even more significant for women than it is for men? That’s because women are both more likely than men to become disabled and less likely to have disability insurance.
Whether they’re single, married, working, or stay-at-home moms, women are more physically and financially at risk of a disability. Many take time away from careers for caregiving, adding to their financial vulnerability. And when you consider a longer life expectancy than men, higher lifetime healthcare costs, and greater dependence on Social Security and other safety nets later in life, the need for disability insurance becomes clear.
Another compelling reason to offer paycheck protection to women is that they are playing a more prominent financial role in their households. The 2012-2013 MacroMonitor reports that in 65 percent of households, women are the primary financial decision makers. So they – and their households – have more to lose than ever before.
With these kinds of facts and statistics, you’d think women would be lining up to protect themselves with DI. But surprisingly, that’s just not the case.
It goes back to the fundamental differences between men and women.
Women just don’t approach financial planning with the same mindset as men. For example:
- Although women are concerned about the consequences of disability, only 37 percent of women have discussed it with their financial advisors, compared with 52 percent of men according to a 2012 study by The American College State Farm Center for Women and Financial Services.
- For men, retirement planning is about growing wealth. For women, it’s more about how they can spend their golden years doing what they want. Their decisions about things such as DI are more likely to focus on family security rather than building wealth.
- A study by the Insured Retirement Institute (IRI) shows that only 30 percent of women have saved at least $200,000 for retirement, compared to 50 percent of men.
So how do you reach your women prospects?
If you want to be successful at selling DI to women, you have to first be successful at meeting them on their terms. And that can be as simple as 1-2-3:
- Understand their unique approach to retirement planning.
- Focus on building long-term relationships and fostering their trust.
- Provide them with clear, straightforward advice and information about the financial products that fit their unique needs and lifestyle.
Most people don’t think twice about insuring their “stuff.” Yet surprisingly few think about insuring against a disabling illness or injury, even though the ability to continue earning a paycheck over a lifetime is worth much more than that “stuff” ever will be. And given the facts and statistics on women and disability, it should be obvious why you need to know how to market DI to women. In fact, the real question should be … Why wouldn’t you?
Have you been successful with marketing paycheck protection to women? Post a comment below. And for more tips and advice, subscribe to our blog in the top right corner of this screen.
As a disability insurance broker, you’ve done a great job of protecting your clients with income protection during their working years. But what about after retirement? Have you talked to them about how to protect their assets beyond the working years?
With changing demographics and a booming elderly population, the need for long-term care services is at an all-time high. For most clients the need for long-term care isn’t a question of IF, but WHEN.
That’s why your clients need financial protection beyond age 62.
Most people understand the importance of sound financial planning. And that’s a good place to start in making the case for both disability insurance and long-term care insurance as crucial ingredients of a smart financial strategy.
- DI for the working years to protect the paycheck: The consequences of becoming disabled and unable to work should be obvious. The ability to earn a living is each person’s most valuable asset. Without that ability, all other assets (houses, vehicles, retirement and education) can slip out of reach.
Going without paycheck protection can cost your clients – and possibly their family members – everything in the event of a disabling injury or illness. Those who secure income protection have better self-esteem as family providers, less stress, and better chance of recovery if and when illness strikes because they can focus on health instead of finances.
- LTCI for the retirement years to protect savings from the drain of LTC costs: When your clients reach the end of their working lives, the last thing they need is to see their entire nest egg drained away on long-term care costs. But the chances of that happening are increasing all the time, with long-term care costs on the rise and the volatility of the economy. If you’ve seen a cost of care calculator, you know that the cost of long-term care is rising fast – and will be as high as $20,000 a month in 20 years, when many of your clients are elderly.
Clients with long-term care insurance can enjoy their retirement years with confidence, knowing they’ve taken wise steps to protect their assets. This relieves the all-too-common worry of outliving one’s savings. For more affluent clients, it helps ensure they can pass down wealth to the next generation – a legacy many strive to achieve.
And so, with these goals in mind, it’s up to you to make the case. Make sure your clients understand that both the cost of disability and long-term care can wipe out savings – fast!
The solution? Offer DI + LTCI for complete life cycle protection. So why not offer them the peace of mind that comes with knowing their finances are protected for life?
Request a disability insurance quote or long-term care insurance quote from DIS today, and give your clients the entire life cycle protection they need. Also, for assistance with presenting this “total life protection” concept, download our all new client handout “Insurance for Every Life Phase.”
“I have income protection!”
“My work provides coverage!”
“I bought that years ago!”
These are common answers we hear when inquiring about income protection. But the real question is, “What did you buy?” Another way of asking this question would be, “Is your income protection up to date?”
Many people are surprised to find out their income protection can force them to do other work.
Many others are surprised to learn their premiums will rise at regular intervals.
This often leads to the response, “I bought what???
Most consumers do not understand the complexities of income protection.
Economic and political uncertainty creates the PERFECT time to review these matters with current clients or go over such questions with new clients!
Whereas most people will bypass the pages of contractual fine print to focus on price, the correct way to bring price into focus is by customizing the protection for each client’s needs.
Not EVERYONE needs the best definition of disability.
Not EVERYONE will have the possibility of going out on a Residual disability claim.
EVERYONE needs their most important asset protected in the best way possible.
The accident happened.
You never bought personal insurance.
You call a government agency for help.
The recorded greeting says, “Sorry, this office is closed till further notice.”
Can it happen?
No one would doubt this possibility given current events at hand.
Free market competition is the reason why private carriers can offer rock solid income protection at the best rates possible.
That is the reason why these solutions will give consumers and their families piece of mind, and why such carriers continue to survive economic instabilities.
This is a clear sign and direction for financial action.
Facing emergencies is statistical.
Facing them with uncertainty is preventable.
They’re a vital force that has contributed to the highest standard of living and the greatest production the world has ever known. They’ve tirelessly championed our traditional ideals of economic and political democracy. And they’re the source of much of our nation’s strength, prosperity, and freedom.
They’re the American workers.
For most people, Labor Day is a time for parades, picnics, and barbecues as summer ends and kids go back to school. But the holiday was actually created by the labor movement over 100 years ago, born from a tumultuous time in an effort to pay tribute to the social and economic achievements of American workers.
How did it all begin?
More than 100 years after that first Labor Day observance, there’s still some debate about who first proposed the holiday. Historical records indicate that Peter J. McGuire, cofounder of the American Federation of Labor, was the first to propose it. But recent research seems to point to Matthew Maguire, a machinist and later secretary of Local 344 of the International Association of Machinists in Paterson, N.J, as the true founder of the holiday.
Regardless of who gets the credit, it was the labor unions that made the holiday a reality.
As manufacturing increasingly replaced agriculture as the wellspring of American employment during the late 18th and early 19th centuries, labor unions became more prominent and outspoken, organizing strikes and rallies to protest poor conditions and urge their employers to renegotiate hours and pay. Many events turned violent, including the infamous Haymarket Riot of 1886 in which several Chicago policemen and workers were killed.
Other events led to longstanding traditions. On September 5, 1882, 10,000 workers took unpaid time off work to march from City Hall to Union Square in New York City, holding the first Labor Day parade in U.S. history. The idea of a “workingmen’s holiday” celebrated on the first Monday of every September soon caught on in other cities and states across the country, and many states passed legislation recognizing it.
It took 12 years and a crisis in American labor before the federal government would act. In May 1894, employees of the Pullman Palace Car Company in Chicago went on strike to protest wage cuts and the firing of union representatives. The American Railroad Union soon called for a boycott of all Pullman railway cars, crippling railroad traffic nationwide. To break the strike, the federal government sent troops to Chicago, unleashing a wave of riots that ended in the deaths of more than a dozen workers.
In the wake of this tragic event, Congress passed an act on June 28 of that year, officially making the first Monday in September a federal holiday in the District of Columbia and the territories. We’ve been celebrating Labor Day ever since.
Although labor conditions have improved dramatically, the financial risk of disability continues to be devastating. If workers become temporarily or permanently disabled and unable to work, due to injury or illness, they face huge financial uncertainties.
One important way you can “pay tribute to the social and economic achievements of American workers” is to protect clients from financial ruin by safeguarding them with paycheck protection. Paycheck protection is vital to the strength of our economy and essential for protecting the American workers whose efforts we recognize every Labor Day.
Need help reaching out to your clients? Download our free client handout “The Top Five Reasons for Income Protection.”
With the back to school season, many of you are getting back to work as well – exploring opportunities to make one final push to finish 2013 strong. With a still-shaky economy, stricter regulations, and evolving consumer expectations, it seems that change is the only constant in the insurance industry. If you’re selling life and/or disability insurance, here are four trends to keep on your radar:
1. National focus on health insurance and cost shifting. If you attended any insurance industry tradeshows over the past year, you already know that life and disability topics are taking a back seat to health care. Employers, individuals and even insurance agents are so focused on health reform, it’s difficult to turn their attention to life and disability. However, with change comes opportunity and the opportunity for life and DI is in the voluntary/group benefits arena. Employers are reassessing their benefits programs and looking for options to affordably fill coverage gaps. Guaranteed standard issue disability insurance, multi-life long-term care insurance and critical illness insurance are all attractive solutions.
2. High unemployment and limited discretionary income. With millions still out of work, many are too busy paying off mortgages, credit cards, and student loans to worry about life insurance. And if there’s no paycheck to protect, disability insurance is not even a discussion. However, unemployment rates are slowly trending downward, so now is the time to get ready for growth. View training webinars and videos, learn a new sales script and stock up on client handouts. Watch for growth opportunities in group life and disability as private employers continue to add new hires to their benefit rolls.
3. Multigenerational hardships. Baby Boomers are increasingly postponing retirement, working longer to recoup money lost during the Great Recession. This is creating a higher likelihood of serious illnesses or injuries in the workplace. And Gen X-ers and Millennials are experiencing less personal wealth, slower upward mobility, and greater family obligations such as caring for aging parents, making them more likely to use family and medical leave benefits. As an agent, your opportunity comes from meeting your clients on their terms. Know their hot buttons and preferred communication styles. Don’t assume that they will respond to the same marketing and service tactics that have allowed you to succeed in the senior market.
4. Increasing disability incidence. The sluggish economy and aging workforce has contributed to an increased incidence of disabilities in the workforce. In fact, the Social Security disability backlog may have reached an all-time high. What does this mean for you? It means that older clients may still be good candidates for disability, critical illness and long-term care insurance protection. Make sure to emphasize that the best time (and sometimes the only time) to buy these products is while one is still healthy. Also, make sure clients understand that Social Security disability benefits can be lean and hard to obtain. It’s much smarter to take charge of your own protection.
Bottom line – if you want to finish out 2013 on a high note and achieve sustained growth for 2014 and beyond, keep an eye on the trends and be ready to adapt to your clients’ changing needs. One way to stay on top of the latest disability insurance news is by subscribing to our blog in the upper right corner of this screen.
Key people are employees who contribute a large percentage of an organization’s sales, growth, and consequently, income. But what if an unexpected injury or illness was to disable one of these key employees? Waiting for the employee to recover or finding a suitable replacement could take quite some time.
This is where key person disability insurance comes in. Key person insurance provides a benefit to help shore up business finances when a key person is out due to a disabling injury or illness. Your job as insurance agent is to educate your clients about the need for adequate business income protection and key person disability insurance is one tool that should be discussed.
The facts about key person disability insurance
Key person disability insurance policies are meant to protect business income in the event a key employee becomes disabled. With the benefit period usually ranging 12 to 24 months in length, these policies are meant to protect the business until the employee returns to work or the business can find a suitable key employee replacement.
Benefits are paid according to policy terms until the disabled key person can return to work or is permanently replaced.
Contrary to popular belief, every business is at risk of having a disabled key person. Some of the most common causes of disability are heart disease, cancer and stroke and these diseases can render employees unable to work for months – even when they work in sedentary positions.
The hypothetical example below illustrates how key person disability insurance may benefit your business clients.
Jane owns a company that sells business computer software. Jack is one of Jane’s key employees. His sales account for 60 percent of the total sales made by the company.
Jack is an excellent sales person. He knows how to work well with clients and often gets referrals. If Jane were to lose Jack to an injury or illness, her business income would suffer tremendously.
Jane’s insurance agent recommends key person disability insurance to protect income brought in by Jack. With the policy she purchased, she has the peace of mind of knowing that if something happens to Jack, the policy will pay the benefit for the selected period of 24 months, or until a replacement employee is found. This could be the extra cushion that keeps Jane’s business afloat during a stressful time.
Selling key person disability insurance to your clients
You’re in the business of financially protecting your clients and key person disability insurance provides a coverage that many business owners shouldn’t be without. Think of specific customers who would benefit from one of these policies and make it a top priority to let them know this coverage is available.
Business owners who depend on a few key employees will greatly value your recommendation. Key person disability insurance offers your clients business income protection and most of all peace of mind. Looking for more ideas to protect business owners? Learn more about business overhead expense (BOE) policies.
Have you ever come back from a sales seminar, class, or professional convention so inspired that you couldn’t wait to pick up the phone, fill your appointment schedule and break every previous DI sales record?
As a disability insurance expert, you have the desire to sell, but you don’t always have a receptive audience of prospects. Unfortunately, an arsenal of business cards, brochures and a well-polished presentation won’t get you out of the garage and down the driveway if you don’t have enough prospects to talk to. Whether you’re a new agent looking to build your book or a seasoned veteran who wants to take sales to the next level, employing the simple technique of forming alliances with other professionals can jumpstart your disability prospecting efforts and your disability insurance quote volume.
Build relationships with other professionals
A great way to reach a lot of prospects and build a steady stream of referral business is to form alliances with other non-competing professionals. Real estate brokers, mortgage lenders, and financial planners (those who don’t offer insurance products), are all potential resources for building alliances. Why? Because their clients need income protection.
For example, consider an alliance with a local business accounting firm. Since they help clients on manage business assets, recommending income protection is a natural transition. In return, agree to refer clients of yours who might be in the market for accounting services. It’s a win-win. You build a solid referral system to generate new prospects and you provide clients with a professional resource, adding value to your DI services.
How to get started
First, compile a list of potential businesses for potential alliances. Like most professionals who work by appointment, demonstrate your respect for their time by calling first and ask about setting an appointment to talk about a mutually beneficial business opportunity.
When you talk on the phone, be prepared and to the point. Tell your potential alliance that you would like to meet to explore the opportunity to refer quality business to one another. If the person is agreeable, set up an in-person meeting to talk further. Remember, it’s a two-way street so come prepared to learn as much as possible about the other business. They will be more interested in YOU, if you show great interest in THEM.
Can’t get by the gatekeepers? Mail out a letter explaining your services and include the benefits of working together and referring business. Suggest the possibility of co-hosting local seminars or workshops in the near future.
The insurance business is a highly-competitive industry. Forming alliances with other professionals can be a great way to reach warmer, qualified DI prospects and referrals.