Don’t make these disability insurance ROOKIE mistakes!
If you’re not a disability insurance expert, submitting a DI quote can be an intimidating and lengthy process, and rookie mistakes can undermine your efforts. But don’t let that keep you from selling disability insurance. Once you learn the mistakes and how to avoid them, your chances of success can skyrocket.
Mistake #1: Overstating income on disability insurance quote requests.
Disability insurance typically costs around 1% to 3% of a person’s income, so the more you make, the more you pay. If you’re overstating your clients’ income, they’ll end up paying more than they should, and that can lead to price objections and lost sales.
The gross income level isn’t always what it seems. As a rule of thumb, check out gross pay before deductions for EMPLOYEES. For the SELF-EMPLOYED clients, look at business profit (including owner draws) after deducting business expenses.
Tip: Uncover more ways to avoid price objections with these sales tips.
Mistake #2: Mismanaging client benefit expectations.
Clients will want a DI policy that covers 100% of their pay. On the other hand, carriers typically calculate a benefit amount at 60% of gross income. As the broker, you’re the “monkey in the middle” so manage expectations carefully.
You won’t be able to cover 100% of pay, but you can get as close as possible by layering coverage, recommending riders that make sense for the individual client, and suggesting additional coverage options like critical illness insurance.
Tip: Conduct a needs analysis to see how much coverage your clients really need.
Mistake #3: Caving in to client’s income documentation complaints.
If your client complains about income documentation for a disability insurance quote, set ’em straight! This is nothing compared to applying for a mortgage loan, and the potential value is much, much higher – the policy could pay a million dollars or more!
If clients are objecting to the documentation requirements, the real issue might be that they don’t understand the true value of disability insurance – and that can lead to lost sales even after you’ve provided a quote. You can overcome this coverage objection by helping clients see how much a disability could take away from them.
Tip: Show your clients the true impact of income loss.
Mistake #4: Misclassification of the client’s occupational duties.
This one is BIG. Many disability insurance brokers write down a job title without asking questions about the duties performed. A misunderstanding of duties can make a huge difference in rates (and in your closure rate)! Always look at job duties – not job titles.
This can be an issue for a lot of workers, but it’s especially important to consider when helping business owners buy income protection. Some business owners do very physical work, while others mostly work in an office-setting, and some do a mix of both. When it comes to disability insurance, the difference matters.
Tip: Download the Tale of Two Business Owners flier to learn more about the job classification.
Mistake #5: Muddling medical questions.
This is no time to be shy. Take five minutes and ask some candid questions – it will shave weeks off the disability insurance underwriting process. If the prospect is uncomfortable, you can offer to have the carrier conduct the interview by phone.
Even if your client has pre-existing medical conditions, it may be possible to secure standard disability insurance with good rates and coverage, especially if you target the right carriers. However, in some cases, simplified issue disability insurance may make more sense.
Tip: Learn about simplified issue disability insurance and when to offer it.
Mistake #6: Submitting sketchy records.
Underwriters can smell incomplete information from miles away, and they don’t like it. Your goal is to submit a solid application so you can get attractive quotes fast and seal the deal. Delays at this stage do not work in your favorite, so try to avoid them. Do a thorough job on the application – and don’t even think about submitting doctors names without contact information!
Now you know the six mistakes that can derail your disability insurance quotes. Don’t let it happen to you. See how DIS can support you.