Stories, Not Stats Sell Disability Insurance

By Cyril Tuohy
InsuranceNewsNet

Insurance agents and financial advisors in the disability space would do themselves a favor if they held off on the pie charts, the statistics and the tables, according to Carol A. Harnett, the new president of the Council for Disability Awareness (CDA).

Instead, advisors should approach prospects through storytelling to connect emotionally with prospects because it’s more effective, said Harnett.

“Start telling stories from the audience perspective and you start to gain their attention,” said Harnett, in an interview with InsuranceNewsNet. “That’s the first thing that will be important for us as we switch our focus.”

CDA, a nonprofit based in Portland, Maine, educates consumers about the risks of illness and injury that threaten the ability of people to generate income. CDA does not lobby lawmakers on behalf of disability insurers.

Harnett, an expert on absence and disability management, columnist and former vice president and national disability and life practice leader for The Hartford, said her writing experience has taught her about the importance of capturing an audience.

Advisors need to approach income protection insurance in the same way — from the perspective of the policyholder, said Harnett who took out her first disability policy when she was a graduate student.

What would it mean if you couldn’t afford for your daughter to play travel soccer? What if you couldn’t keep up with your son’s tuition? Would you be dependent on your parents or your spouse if your income were to disappear because you could no longer work?

Agents need to enter into a conversation about back pain, musculoskeletal pain, cancer and mental disability. Agents should stay away from a lecture. Lectures are for other disability experts meeting in convention hotels, not consumers, Harnett said.

“We always jump to the risk analysis first, which means absolutely nothing to consumers and employees,” she said. “We now have to understand how to have a conversation and use examples meaningful to their lives, not our lives.”

Advisors need to think of the disabled beyond people  in wheelchairs only. Depression, stress, anxiety and loss of vision in one eye qualify as disabilities, and disabilities affect the young. Nearly 40 percent of new claimants last year were in their 40s or younger according to the CDA’s ninth annual Long-Term Disability Claims Review survey.

“My first memory of wanting to help someone with a physical challenge was when my mom was pregnant,” Harnett writes in a Dec. 16, 2013, column published in Human Resource Executive Online. “I recall being frightened by her inability to get out of a soft chair the week before she gave birth. It took all my strength to help her to her feet.”

Harnett, who took over July 1 from Barry Lundquist, will commute between her home in Connecticut and CDA headquarters several times a month.

Dan McMillan, chairman of the CDA board of directors, said Harnett brings “a unique background and diverse mix of experience to CDA that are a perfect fit.”

“Carol’s expertise, derived from her work with people with disabilities and health and disability insurers, as well as in health care and the disability community, will help her broaden CDA’s reach and impact,” McMillan said in a statement.

Advisors and brokers are likely to take on a more central role in explaining the importance of long-term disability (LTD) and short-term disability (STD) coverage, Harnett said.

That’s because employers are retreating from offering disability insurance as a staple of their employer-sponsored health benefits, she said. Meanwhile, baby boomers are getting older and will likely be more prone to disabilities.

In 2013, the average disability claimant exceeded age 50 for the first time, according to the CDA claims survey.

Other disability insurance surveys show that even with affordable rates, many workers remain uninsured or underinsured for disability coverage.

Lundquist, in a June news release, said that despite lower unemployment rates, an improving economy and higher consumer confidence, employers and workers continue to adopt a “wait-and-see attitude” toward benefit spending.

The industry, therefore, has some work to do to reposition disability insurance and connect more closely with consumers.

Last year 214,000 employers offered long-term disability benefits to their employees, the CDA said.

Despite more employers offering the coverage last year compared to 2012, the number of insured individuals over the period fell 1 percent to 32.1 million, according to the claims review survey, which collected data from the top 19 disability insurers in the country.

The decrease may reflect a trend toward more voluntary and employee-paid disability benefit plans in which not all eligible employees enroll, the CDA also said.

Disability claims payments from the 19 disability insurers came to $9.8 billion last year, a 1.6 percent increase over 2012, according to the survey. Last year, 653,000 existing claimants received a disability payment, down 3 percent from 2012, the survey found.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].