What if your disability insurance clients could get more coverage with no medical underwriting? And what if you could earn first-year commissions on those sales again?
Well, we have good news. With the Future Purchase Option rider, a common clause in many disability insurance policies, this is actually possible. The Future Purchase Option rider gives policyholders the option of purchasing additional coverage without medical underwriting. This makes it easy for them to increase their coverage as their needs change. It also provides you with a second chance at a first-year commission.
This is truly a win-win situation – and hands-down, these are your easiest disability insurance sales ever – but only if you take a few steps to make them happen.
Step One: Make the Initial Disability Insurance Sales
You can’t promote something that doesn’t exist. Although the Future Purchase Option rider is a common clause, it’s not in every single disability insurance policy. If you want to take advantage of this great option, you need to make sure the policies you’re selling include this clause.
When looking for the Future Purchase Rider, you might see alternative language. For example, the same 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 the 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: Send out a Reminder on the FPO Anniversary
Once you sell a policy with a Future Purchase Option rider, you need to keep track of the coverage anniversary. FPO anniversary dates vary by carrier – some may be every year while others could be every three years. Doing this is as easy as keeping a spreadsheet on your computer.
When you see the 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. According to the National Association of Realtors, 5.34 million existing homes and 682,000 newly constructed homes were sold in 2019 – that’s a lot of mortgages to protect!
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 them time to think about whether more coverage is needed and giving you time to complete the necessary paperwork. Although your client won’t need to worry about medical underwriting, you will need to submit an application along with the required proof of income.
Step Three: Rinse and Repeat
Don’t stop with the first anniversary! Reach out to your client at least one month before every FPO opportunity.
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.
This is also a great way to stay in touch with your clients year after year. That way, if they have any other insurance needs that you can help them with, or if they have any friends or family who need coverage, you’ll be in their thoughts.
Have questions about how to talk to your clients about the Future Purchase Option? Contact the DIS sales team. We’re happy to help!
