Sometimes, a little effort goes a long way. Take the Future Purchase Option Rider. A common clause found in many disability insurance policies, this rider makes it easy for clients to purchase additional coverage without medical testing. When they do so, you make a first-year commission. It’s truly a win-win situation – but only if you make a little effort to promote it.
Step One: The Initial Sale
The first step to getting everything you can out of the Future Purchase Option rider is making sure it’s in the policies you sell. The option is sometimes called guaranteed insurability. It doesn’t matter what term is used, as long as its presence in the contract means that the insured has the right to increase coverage without going through a medical underwriting process.
Point out the rider to your clients. Let them know how important it is, and how they can make use of it in the future – but don’t leave the ball in their court.
Step Two: The One-Year Anniversary
Once you sell a policy with a Future Purchase Option rider, you need to keep track on the date. Doing this is as easy as keeping a spreadsheet on your computer. This is important because you’ll need to know when the one-year anniversary is coming up.
When you see the first anniversary is approaching, it’s time to go into action again. Reach out to the client to see if his or her needs have changed.
For example, the client’s responsibilities may have increased. Someone who recently took out a mortgage has extra incentive to purchase additional disability insurance. Likewise, a client who received a raise has more income to protect, and a client who has more disposable income – possibly from paying off a mortgage or student loan, for example – may have more money to invest in paycheck protection.
Ideally, you’ll contact each client about a month before the anniversary date, giving your client time to think about whether more coverage is needed and giving you time to complete the necessary paperwork. You’ll need to submit an application along with the required proof of income.
Step Three: Rinse and Repeat
Don’t stop with the first anniversary! This option continues every year, so keep reaching out a month before the anniversary.
Keep in mind that small changes, such as token raises, may not be enough to make a client consider purchasing additional coverage, but these really add up over time. If a considerable amount of time has passed, talk to your clients about how much their situation has changed since the original purchase, and how this means they could benefit from additional coverage. Doing so will help ensure that your client is fully protected – and it could land you a nice commission.
Have questions about how to talk to your clients about the Future Purchase Option? Contact the DIS sales team. We’re happy to help!
