Disability insurance can be a lucrative product for insurance agents. In addition to a nice first-year commission, you can receive renewal commissions that provide a steady stream of passive income – as long as you keep your clients. Implement effective customer retention strategies to increase your commission revenue while helping your clients stay covered.
1. Stay Top of Mind
If your client is thinking about canceling their coverage, you want them to talk to you first. This is more likely if you’ve remained in contact. There are many ways to keep the lines of communication open even after you’ve made a sale, such as:
- E-newsletter. Create a monthly or quarterly email newsletter and invite your clients to subscribe. In this newsletter, you can provide tips and insights that are useful to your clients. For example, if you’re selling disability insurance, you can cover recent research into the best ways to stay healthy. You can also include updates on the insurance industry and your agency.
- Birthday and holiday cards. Make a note of your clients’ birthdays and the holidays they celebrate so you can send out greeting cards. To stay on top of holiday cards, it’s important to be organized. Always look ahead so you can get your cards ready and send them out on time.
- Social media. Maintain an active social media presence and post about topics that are of interest to your clients, such as risk management tips. Include your handles on your business card and in your email signature, and invite your clients to follow you.
2. Cross-Sell
To retain your clients, you need to meet their needs. That usually requires cross-selling.
Let’s say you sell a client a disability insurance policy. Two years later, this client has a baby. Suddenly, protecting their income for themselves isn’t enough. They also have to provide for their child, so they need life insurance. You don’t sell life insurance, so your client goes to another insurance agent, who also convinces them to switch disability insurance policies. Now you’ve lost two policies.
3. Proactively Manage Renewals
Before a renewal comes up, reach out to your clients to see how they’re doing with their policy and if their needs have changed. This gives you an opportunity to discuss any issues they’re having or help them purchase a new policy – before they simply decide to cancel.
Proactive renewal management is especially important for certain products, namely guaranteed standard issue disability insurance and individual disability insurance policies with a benefit increase option rider.
With guaranteed standard issue disability insurance, you have multiple policyholders with the same employer who have all gotten coverage at the same time to benefit from streamlined underwriting and, in many cases, a discount. More clients means more commissions, but it also means more to keep track of to retain those clients.
With a future purchase option, a renewal brings the chance to increase coverage, but only if action is taken within a certain timeframe. This brings us to the next point.
4. Leverage the Future Purchase Option
Over time, your clients’ income protection needs will grow as their earning power increases. The future purchase option, also known as a benefit increase rider, addresses this issue.
This rider allows the policyholder to increase their coverage level to match increases in their income. When your clients use the future purchase option, they receive more coverage without having to buy a new policy or go through a burdensome underwriting process, and as the agent, you get a first-year commission.
To leverage the future purchase option, you need to offer it to clients when you quote disability insurance options. Once your clients have a policy with the future purchase option in place, you need to keep track of renewals. Ahead of renewals, reach out to see if your client’s income has increased, and if it has, suggest using the future purchase option.
5. Use DIS
Effective customer retention strategies can take a lot of work, but DIS makes it easier.
We’ve built proprietary technology that automates the process of proactively managing future purchase option disability insurance renewals. Without this technology, only 6% of benefit increases offered are accepted by policyholders. With this technology, you can increase the future purchase option uptake rate to more than 60%. That’s a lot of satisfied, well-protected clients, and a lot of first-year commissions.
We also have proprietary technology to manage the guaranteed standard issue disability insurance renewal process.