When a prospect turns down disability insurance coverage, do you have them sign a waiver of liability? If not, you might want to start. A waiver can be a powerful tool that leverages insurance sales psychology to make prospects reconsider their coverage decision. It can also help protect you from accusations of professional negligence.
What Is a Waiver of Liability?
A waiver of liability is a simple form that states that you have offered coverage and explained its importance, but the prospect is declining coverage and agreeing to hold you harmless for any financial consequences that may result.
The form is only one page and doesn’t have a whole lot of text, but it includes your name, the prospect’s name, the prospect’s signature and the date. Getting a signature should only take a moment, and then you can keep the form on file. In some cases, that may be the end of it. In other cases, the waiver may come in handy. In fact, a waiver of liability can help you achieve three things.
One: A Waiver Protects You as a Broker
Your clients count on you to provide advice on financial and insurance products. If you fail to do this – or if the client simply claims that you failed to do this – you could be accused of negligence.
Imagine you’re selling life insurance to a woman named Sarah. A year later, she experiences a disability and can no longer work. She can’t afford to keep up with her life insurance premiums or any of her other expenses. A friend comments that it’s too bad she didn’t purchase disability insurance when she purchased life insurance. Sarah does some research and realizes that the risk of disability is much greater than the risk of death for a working-aged woman, and she thinks you let her down by failing to provide her with coverage.
Maybe you offered her coverage and she turned it down, but can you prove that now? If you had her sign a waiver of liability, doing so would be a piece of cake.
Of course, even if you can protect your own career and reputation, you don’t actually want your clients or prospects to suffer because they rejected the coverage that could have protected them. You want people to get the coverage they need. That brings us to the second benefit.
Two: A Waiver Is a Hidden Sales Technique
Having a prospect sign a waiver of liability may seem like an admission of defeat, but that’s not really the case. A waiver is actually a powerful insurance sales tool that may prompt your prospect to reconsider coverage.
We’ve explained how omission bias can lead to inaction. People worry more about harmful actions more than harmful inactions, so if they’re not sure about something, they may decide to do nothing. This can lead people who are on the fence about DI to choose inaction, in this case, not purchasing coverage. Having these prospects sign a waiver forces an action and may make them reconsider.
A waiver also forces prospects to acknowledge that they could suffer financial harm due to a disability. Although disability is common, many people like to think it could never happen to them, so they don’t need DI coverage. Of course, that’s not true, and on some level, they must know that. A waiver makes them face reality and put it in writing.
Three: A Way to Seal the Deal
As an insurance broker, you probably know that rejection isn’t the only way you lose sales. In many cases, you lose sales to indecision. A waiver can help in this situation, too.
For example, maybe you have a prospect who has been considering coverage for a while. He seems interested, but he keeps coming up with excuses to delay.
This sort of indecision can go on for months or even years. Many of these individuals will never purchase coverage. And what happens if they experience a disability? The vague intention to buy insurance won’t actually help them.
So ask them to sign a waiver. Explain that you hope they’ll make the smart decision to purchase coverage in the future, but in the meantime, you need a waiver of liability on record.
This strategy could be just the nudge a prospect needs to finally purchase coverage. If not, at least you’ve protected yourself from potential accusations.
Get Your Waiver of Liability
A waiver of liability is a simple and effective way to make insurance sales psychology work for you. Download your waiver now.