The people who need disability insurance the most are often the ones to object to its price.
It can seem counterintuitive at first, but when you think about it, it makes sense. Many seemingly affluent people are living paycheck-to-paycheck, or very close to it. If an injury or illness prevented them from earning an income, they’d be in financial trouble fast. They need disability insurance.
Perhaps their budgets are already stretched thin. Once they’ve paid to fund their luxury lifestyle, they might not have a lot left. Or maybe they have extra money, but they also have plans for that money. They want to pay for their kid’s college tuition, or they’re hoping to save up for that boat or summer cottage. They don’t want to pay for insurance – but if a disability struck, they might have to say goodbye to their big plans.
Insurance isn’t a sexy purchase, and it isn’t one that most people get excited about. If you give clients the option between buying disability insurance or buying something they really want, they’ll probably go for the latter. But that could be a mistake. Disability can affect anyone, and when it prevents a person from earning a paycheck, the financial impact can be just as devastating as the medical challenge.
Price Objections Are Common – But Cost Can Be Subjective
“Expensive” is a relative term. To see how, just consider something that comes with a price tag of $10,000. If that item is a pen, you’d probably say it’s a very expensive pen. But if that item is a new car, you might think it it’s pretty affordable.
Disability insurance cost can also be subjective. Whether or not it seems like a good deal may come down to how to present it. Here are five methods that can show just what a great deal disability insurance really is.
- The High-Low Method – The high-low strategy pairs the highest benefit with the lowest cost. Learn more about the high-low strategy here.
- The Unit Selling Method – Everyone’s budget is different. The unit selling method breaks the cost down so that you can match it to your prospect’s budget. This is a great way to fine-tune your pitch for middle income prospects. Learn more about the unit selling method.
- The Odds of Loss Method – Your prospects might object to the cost of disability insurance because they think they’ll never need it. With that attitude, any premium seems like too much. The reality, however, is that disability can affect anyone. Use the odds of loss handout to compare the protection offered by disability insurance to the protection offered by other common policies, like auto and homeowners insurance. This is a great way to show your prospects why disability insurance is a good deal. Learn more about the odds of loss strategy.
- Good/Better/Best Method – Let’s say your clients just bought a house. They might want disability insurance to cover the mortgage, but they might be too strapped for cash to pay for a policy with all the bells and whistles. If you only present one (expensive) option, you’re turning it into a yes/no question, and you might encounter a price objection that leads to a no. Instead, give your prospects three coverage options and let them pick the one that works for them. Learn more about the good/better/best option worksheet.
- The Waiver of Liability Method – Sometimes, despite your most persuasive presentations, your prospects still say no. When that happens, have them sign a waiver of liability form that states that you offered coverage and they rejected it. This accomplishes two goals. First, it shows your clients that coverage is so important that you feel it’s necessary to record their rejection of coverage. This might make them reconsider their decision. Second, it shields you from liability if they ever need disability insurance and blame you for not convincing them to buy it. Download the Waiver of Liability form.
If you’re determined to improve your DI closing ratio, there’s one more must-have resource: Our most popular Sales Script – The Wealth Preservation Plan. This script combines many of the strategies above. Download it, memorize it and put it into action. This is the secret of many top-performing agents in the industry.