Providing quotes is a critical part of the sales process, and if you don’t give this step the attention it deserves, you could undermine all of your previous efforts. To close a sale, you need to provide an irresistible disability insurance quote.
Poorly-Planned Quotes Waste Everyone’s Time
You’ve found a prospect, made the pitch, and piqued the person’s interest enough for him or her to want a quote. It’s been a lot of work, but you think you have a good chance of making the sale. Then, it all falls apart. Maybe your prospect thinks the price is too high or finds the coverage lacking. Regardless of the reason, it’s clear the quote has failed to impress your prospect. The sale fizzles.
You might have avoided this outcome with a better quote.
Individual disability insurance is a highly-customizable product. You can use this to your advantage by securing quotes for coverage that perfectly match the needs of your prospect. It will require a little work, but it’s the best way to improve your chances of closing the sale. If you can’t close the sale, all of your work finding the prospect and making the pitch will have been for nothing.
If you’re quoting all of your prospects the same basic policy, you’re missing out on an opportunity to tailor your quotes to the individual needs of your clients.
Select the Right Definition of Disability
The definition of disability is one of the most fundamental elements of a disability insurance policy. As it determines whether the policyholder is eligible for benefits during a period of illness or injury, it’s impossible to overstate the importance of this term.
The definition of disability also has a significant impact on the cost of the policy. Since price objections are common, raising the price of the policy by offering the wrong definition of disability can kill sales.
When deciding on the best definition of disability, you have two main options:
- Own-occupation disability insurance provides benefits if policyholders can no longer perform the duties of their regular jobs due to disability. Although this is the golden standard, it’s more expensive. It’s a smart option for specialized and highly-compensated professions like doctors, but it may not be a good match for other workers.
- Any-occupation disability insurance provides benefits if the policyholder can no longer perform the duties of any job due to disability. It’s less expensive than own-occupation coverage and can be a great fit for people who don’t have highly-specialized jobs and need affordable coverage.
Tip: For some professions, such as doctors, an own-occ policy is a no-brainer. For other professions, ask questions about the skills and physical abilities required to determine whether own-occ is worth the cost.
Pick the Right Elimination Period
The elimination period is how long the policyholder will have to wait before receiving benefits after experiencing an eligible disability. For long-term disability insurance, a common elimination period is about 90 days, but it can be shorter or longer than this.
- A short elimination period gives the policyholder funds sooner, but it also raises the cost of the policy, which could lead to price objections.
- A long elimination period means the policyholder will have to rely on savings for a while, but it can make coverage more affordable.
Tip: Ask your prospects about their savings. Do they have enough savings to get by for a few months or are they living paycheck to paycheck? Also consider how price sensitive they are. If a prospect needs affordable coverage AND immediate funds, consider offering a critical illness policy to supplement disability insurance.
Offer the Right Benefit Period
The benefit period determines how long a policyholder can continue to receive benefits. There’s a lot of variation in individual disability insurance policies. Some long-term disability insurance policies:
- Only provide coverage for a set period of time, such as two or five years.
- Continue to pay benefits until the policyholder reaches the retirement age defined in the policy.
As with other elements of coverage, price is a factor. A longer benefit period will come with a higher price tag. However, choosing a short benefit period can backfire, as some disabilities are permanent. Once the disability benefits run out, policyholders who are still unable to work may find themselves without a source of income – the exact situation disability insurance is supposed to help them avoid. Since the stakes are high, this is an area where it may be wise to “splurge.”
Tip: Talk to your clients about locking in good coverage. As they age or develop health issues, securing affordable coverage will become harder. The policy they buy now can protect them for the rest of their working lives.
Pick the Riders Carefully
Riders can provide additional benefits, but they can also raise the cost of the policy.
- COLA riders increase benefits to keep up with inflation.
- Future purchase option riders let policyholders increase benefits as their income increases without additional underwriting.
- Student loan riders provide additional benefits to cover student loan payments.
- Retirement protection riders provide additional benefits to help policyholders keep up with retirement contributions.
Tip: Talk to your prospects about their biggest worries. Are they burdened with student loans? Trying to catch up on saving for retirement? Use this information to select the best riders for their needs.
Pay Attention to the Fine Print
There’s a lot of jargon in disability insurance policies. To make matters worse, different insurance carriers will sometimes use the same terms in different ways. When delivering disability insurance quotes, consider the following issues:
- How does the policy define presumptive disabilities? Most policies include presumptive benefits for certain disabilities, such as the loss of at least two limbs or the loss of vision in both eyes. However, requirements and terms can vary substantially.
- Does the policy provide partial or residual disability benefits? Some policies provide benefits for partial disabilities, but the policyholder may have had to qualify for total disability benefits already.
- What are the exclusions? It’s important to consider whether a policy covers mental illness or substance abuse disorders.
No matter how much research you do, you may not be 100% sure which quote your prospect will prefer. Prospects may also change their minds. For example, they may be leaning toward a policy with all the bells and whistles but then decide they need something more affordable. To increase your odds of a successful sale, provide options.
Tip: Provide a minimum of three options – more than this is even better.
Keep Affordability in Mind
Price objections are a major obstacle. Disability insurance provides great value for money and protects policyholders’ most valuable asset: their income. However, many people still balk at the price. You can use strategies to overcome price objections, but you’ll still have to be sensitive to cost.
Tip: Find out your prospect’s budget. You may think it would be a smarter move for your prospect to spend more on better coverage, but some coverage is always better than no coverage.
How to Present the Quotes
Presentation is everything. You’ve worked hard to build the ideal policy; now you need to show your prospect why it’s the perfect option. For example, if one policy is more expensive than another, your prospect will probably want the cheaper option – but the more expensive option may provide much better coverage and value.
Tip: Take the time to go over the quotes and point out their differences. If a particular factor is raising the cost of a policy, explain why you think this is worth the extra cost.
One Final Tip