Many advisors would agree it’s important to inform clients about the importance of individual disability insurance. After all, income protection is a near-universal priority for those worrying about their futures. However, it can be difficult to discuss income protection and effectively propose a need for additional insurance.
You may be leaving money on the table — and exposing clients to risk — by not offering a product that can help protect your clients’ paychecks and maintain their standard of living. Fortunately, there are multiple ways to have a meaningful conversation about IDI with those who might otherwise pass on valuable income protection.
In fact, it might be easier than you think: One of the simplest ways to start a conversation about IDI is to tactfully pivot from a familiar product that you’re already discussing. By using the following three insights, you can pivot the conversation to IDI with your clients.
Although IDI is beneficial insurance coverage, not everyone is an ideal candidate for it. People with high net worth (more than $10 million), who are older than 60 or who derive most or all of their income from passive sources (e.g., ownership of rental properties) are not eligible for or do not require IDI.
However, clients younger than 60 who generate most, or all, of their earnings through full-time work and depend on those earnings to maintain their standard of living should certainly consider added income protection. Candidates in great need of IDI are business owners and people in white-collar occupations earning above-average incomes.
Positioning The Need
IDI contracts, with their unique array of provisions and choices, may seem daunting at first glance. It is natural to be reluctant to bring up a product that you are not familiar with, as it may confuse clients even more.
Instead of approaching IDI with hesitation, focus on the need for income protection rather than a complex solution. First and foremost, educate clients about the importance of preventing financial loss or ruin in the chance they are too sick or hurt to work for extended periods of time.
Once you have your client’s interest, rely on one of the many IDI brokerage agencies around the country to be your expert for IDI support. There is nothing wrong with using top industry experts to provide income replacement solutions that fit your clients’ specific needs — chances are, your clients will feel relieved knowing you’re in contact with experts, too. In many cases, it’s as easy as starting the conversation to pique your clients’ interest and letting IDI specialists help you do the rest.
Starting The Conversation
Choosing how to start the conversation can be daunting. But you don’t have to begin the discussion about IDI immediately. Instead, try transitioning from another product or service that you’re more comfortable speaking about or are already discussing. Here are several ways to naturally pivot toward IDI from another product.
Life insurance: “Congratulations on putting this life insurance policy in place and helping provide for your family if you are not here to do so. What if you survive a serious illness or injury? How will you take care of your family if your health impacts your ability to work?”
Financial plans with periodic contributions: “The best financial plan in the world will only survive as long as your income does. Before we part today, let’s plan to ensure you can still make ends meet even if you cannot earn your usual income. Otherwise, all this planning we just did could be for naught.”
Long-term care insurance: “It is likely that the need for long-term care will arise later in life. But how would your income continue if some serious illness or accident strikes during your working years?”
Individual health insurance: “This health insurance will make sure the doctor, hospital and pharmacy get paid. But if you get seriously sick or hurt, who will make sure you get paid?”
No matter how you approach selling IDI, the most important thing is to start the conversation. It’s impossible to communicate how important it is if you don’t discuss it in the first place. This may be difficult at first, but when it comes to insurance, difficult conversations are often some of the most important.
Meaningfully engaging clients about IDI ensures they can prepare for life-altering events such as illnesses or injuries. When unfortunate events like these occur, every solution should be on the table — IDI included.
Jill Frohardt is second vice president of IDI sales with The Standard. Jill may be contacted at [email protected].