Many people need disability insurance, but few people need it as much as business owners. For insurance agents, business owners disability insurance is a particularly lucrative market. Keep reading to see why business owners have greater-than-average disability insurance needs and how you can sell multiple policies.
Business Owners Don’t Have Job-Based LTDI to Fall Back On
BLS says that 35% of civilian workers have access to long-term disability insurance, and 40% have access to short-term disability employee benefits. Among the top quartile of earners, 59% have access to long-term disability group benefits, and 55% have access to short-term group disability benefits.
People with group disability coverage can still benefit from purchasing individual disability insurance, which can provide more robust coverage and stay in force throughout job changes. However, for better or worse, some workers may feel satisfied with their group coverage and decide against spending money on another policy.
Business owners don’t have this luxury. Business owners are their own employers, so they don’t have access to any benefits except the ones they buy for themselves. With no safety net, they need paycheck protection even more than traditional employees.
Many Business Owners Don’t Have the Coverage They Need
When you think of strong disability insurance markets, doctors might be the first audience to come to mind. Your competition is thinking the same exact thing. Yes, doctors needs disability insurance to protect their incomes, but many agents are already eager to sell it to them. If you can’t get to doctors right at the beginning of their career, you may never have an opportunity to sell to them. The market is crowded, so getting your foot in the door is challenging.
Business owners, on the other hand, are often overlooked. They may not have all of the coverage they need, and that creates ample opportunity for agents who are looking to make a sale. There are also many different types of businesses, from restaurants and shops to accounting firms and beauty salons, giving agents many ways to carve out a niche.
Business Owners Need Multiple Policies
Let’s say you want to double the number of disability insurance policies you sell. One way is to double the number of prospects you pitch. That’s possible, but it will take a lot of time and work. Another option is to focus on prospects who need two or more policies each.
Business owners often need multiple disability insurance policies. In addition to protecting their own finances against the risk of injury or illness, they also need to protect their businesses. They may also have employees or partners who need coverage.
Here are the disability insurance policies that business owners may need. Although a business owner may not need every policy on the list, most will need more than one:
- Individual Disability Insurance – Business owners often work long hours to keep their businesses afloat. If an illness or injury prevents them from working, they may not have any way to generate an income. With group disability benefits, the financial situation can become dire fast. Individual disability insurance provides critical protection.
- Business Overhead Expense (BOE) – Many small businesses rely on the hard work of the owner. If the owner has to take time off for health reasons, the business may not be able to bring in revenue. In the meantime, expenses like rent, employee salaries and utilities don’t stop. BOE insurance protects the business by covering eligible business experiences during a period of disability.
- Key Person Disability Insurance – In addition to the owner, businesses may rely on one or more essential employees. These employees may have special skills or strong relationships with clients. If they have to leave work for health reasons, the company’s bottom line may suffer. Key person disability insurance protects the business by providing a payout to compensate for revenue loss and additional costs.
- Buy-Sell Disability Insurance – A buy-sell agreement can help businesses with two or more partners avoid conflicts and disputes when one partner has to step back for health reasons. Buy-sell disability insurance can fund a buy-sell agreement.
- Bank Loan Disability Insurance – Many businesses have business loans. If a disability prevents the owner from working, revenue may dry up, but those bank loans will still be due. A bank loan default can be disastrous for a business and impede recovery, but bank loan disability insurance provides protection against this scenario.
- Multi-Life and/or Guaranteed Standard Issue – At many businesses, there are multiple workers who need disability insurance. With guaranteed standard issue disability insurance (GSI DI), workers can bypass the underwriting process, and with multi-life insurance, they can receive substantial discounts. These options are ideal for groups of workers with the same employer – and it’s a great way to sell multiple policies at once.
Are you ready to supercharge your career by selling to business owners? Download the Sales Kit for Business Owners.
