If you can fish, you can close DI sales!
How to sell disability insurance and HOOK the big ones.
You've heard the story before – the one about the big fish that got away. Sometimes selling disability insurance is a lot like fishing. You find the perfect bait (marketing). You skillfully cast your line and persuade the fish to nibble (schedule a presentation). You begin slowly reeling in, careful not to startle the fish (beginning the close) and then SNAP – the fish is off the line, lost forever. Sound familiar?
Don't panic. Instead, do what smart anglers do and modify the rigging. Consider re-spooling the line, changing the bait or sharpening the hook. Making small adjustments to your disability insurance presentation can yield big results. There's never been a better time to position yourself for a more bountiful catch.
Stocking Your Tackle Box
As you prepare for your presentation, you know one thing for sure: Your prospect will probably think the price is too high – most do. So, what can you do? How can you make your disability insurance prospects feel like they can't live without DI? Just as you wouldn't arrive at the riverbank with an empty tackle box, you can't arrive at your DI appointment with an empty sales strategy. Make sure you have everything you need including compelling comparisons, visual aids and a good old-fashioned risk reversal tactic.
Comparisons That Create Sales
I've found the easiest way to explain a complex idea is to draw on the power of comparison. And by using the most compelling comparisons, you'll close more disability insurance sales. Here are three quick tips:
- Always Compare Highest Value to Lowest Price: When it comes to pricing, always make it a point to compare the highest denomination value to the lowest denomination price. For example, with paycheck protection, compare the daily cost of coverage (low denomination) with the lifetime value (high denomination). If you do this for DI, and then, you do the same for homeowners insurance and auto insurance, you'll make an eye-opening discovery … dollar for dollar, disability insurance is the most affordable coverage!
If you don't believe me, take a look at the chart below. As you can see, the client's paycheck represents his most important asset at a lifetime (until retirement) value of $3,200,000. The daily cost of protection is just $6.84. That's amazingly inexpensive when you consider the value insured. For example, the client spends $3.28 each day to insure his vehicles which are only valued at $65,000. Now take a look at the odds of loss. The client has a one in three chance of becoming disabled!
- Build Value by Comparing Apples to Oranges: In the insurance industry, pricing comparisons are routine. In fact, Progressive Insurance has made pricing comparison a celebration. In its television commercials, prospects "name their price" and receive car insurance rate comparisons automatically, to help them find the best deals. But for the DI professional, focusing on the pricing differences between disability insurance policies, or comparing apples to apples, is dangerous! The cost between policies is insignificant – not even worth mentioning. You'll do better by comparing your price to the price of different, yet related items, like other lines of coverage as the chart above illustrates.
Before revealing the price of the disability insurance policy, I usually ask, "If you're willing to pay $3.28 each day to protect your vehicles that are worth $65,000, how much would it be worth each day to protect your paycheck which is worth $3.2 million? Clients invariably reply with figures of $10 a day or more. They're amazed when I reveal that they can protect their paychecks for as little as $6.84! - Avoid the Coffee Close: At this point, many brokers make a serious mistake. They say something like "You can protect your paycheck for almost as little as your daily latte." Oops. These brokers don't understand that affordability is not the true price barrier. People who see the value of DI buy DI. By comparing disability insurance to coffee, brokers minimize its value. Once you've made the apples to oranges coverage comparison, skip the coffee and proceed to visual imagery and risk reversal as I explain below. You'll be far better off.
| Asset | % | Value | Annual Protection Cost |
Daily Protection Cost |
Odds of Loss |
| Vehicles | $65,000 | $1,200 | 1 out of 20 | ||
| House | $450,000 | $1,000 | 1 out of 15 | ||
| Boat | $30,000 | $750 | 1 out of 15 | ||
| 15% | $545,000 | $2,920 | $7.98 | ||
| Paycheck | 85% | $3,200,000 | $2,500 | $6.84 | |
| Total | 100% | $3,745,000 | 1 out of 3 |
Create Desire with Visual Imagery
At this point in your disability insurance sales presentation, it's time to throw in the "Ford Fender." For you non-anglers, the Ford Fender is a bright aluminum contraption that's added to the rigging to attract attention and create desire. You can replicate the same effect with visual aids. The first visual aid I recommend is an Income Gap Diagram. The Income Gap diagram challenges the misconception that long-term disability, Social Security and personal savings will safeguard one's family in the event of disability. In reality, many Americans who become disabled experience income gaps as high as 72 percent. The thought of surviving on 28 percent of one's income is usually enough to prompt action. But if not, make sure to have some DI statistics and real life stories in your back pocket. One thing that many people don't realize is that the greatest risk of disability comes from illnesses like cancer and heart disease. A real life story about a sole breadwinner winning a battle with cancer without sacrificing his family's home or retirement savings can drive home the point.
Don't forget the risk reversal.
In most sales circles, risk reversal is the process of removing risk from the purchase by providing a guarantee. In DI, risk reversal is about demonstrating the risk of NOT buying. Here's how it works …
In financial planning, disability insurance is considered a fundamental element of protection. In fact, some brokers have been sued for errors and omissions because they failed to emphasize the importance of DI coverage to their clients and those clients went on to suffer disability and its grave financial consequences. So, to protect myself and to throw in a little risk reversal, I always present my prospective clients with a Waiver of Liability. The Waiver states that I've informed the prospect of the need for paycheck protection and that after receiving the information, the prospect declined it. By presenting the Waiver of Liability form for the client to sign, I protect myself, but more importantly, the client realizes that refusing disability insurance is a significant decision and a risky proposition.
Prepare for the BIG one!
As you can see, by harnessing the power of comparisons, visual imagery and risk reversal, you can easily sell the value of disability insurance and close more sales. Consider this formula your disability insurance selling, SNAP-resistant, catch-your-limit pricing strategy. But beware … you just might land your biggest catch ever!
The original version of this article was published in the February 2010 issue of Health Insurance Underwriter.
