Why Are Business Owners a Good Market for your Disability Insurance (DI) sales?

Small business owners typically wear many hats in the day-to-day operations of their company: boss, accountant, technical support, marketer and salesperson, just to name a few. Depending on their role, their concerns about becoming disabled or having someone in their business become disabled may vary. If a disability strikes, how do business owners:

• Maintain their family’s lifestyle without an income?
• Keep the business running?
• Continue to pay their employees’ salaries or offer them voluntary income protection?
• Sell their portion of the business (or buy out their co-owner’s portion) should the need arise?

Because of these many concerns, you can discuss several different solutions to meet their specific needs. Business owners are not your typical ‘one and done’ sale.

Get Smart about the Business Owner Market

Here are some basic income protection solutions for business owners:

• Personal Protection: Individual Disability Income Insurance
• Business Protection: Business Overhead Expense Disability Insurance
• Business Protection: Buy-Sell Disability Insurance

Many insurance carriers also offer special solutions to help meet the personal protection needs of co-owners and employees. Multi-life discounts generally apply when three or more individuals with an employer/employee relationship get coverage. 

Need Assistance Reaching Business Owners?

The Insurance Partners will provide all the resources you need — Quote generation across competitive carriers, marketing materials, sales ideas, presentations and more.  Talk to us about your business owner clients today!

info@theinsurancepartners.com

913.951.5400

• Groups can qualify for one of 3 Underwriting programs depending on the life count.
• Modified Guaranteed Issue – 3 medical questions, standard rate class, greater of 15 employee applications or 10% of HPE* (High Potential Employees).
• Simplified Issue – Sections A & B: 8 medical questions, standard rate class greater of 10 Employee applications or 5% of HPE*, MIB and prescription drug checks to verify section A & B answers.
• Abbreviated Application – Sections A & B: same 8 medical questions but with phone interview, at least 5 employee applications, telephone interview asking section C questions, medical records “as needed”.
• All rate classes available, including preferred
* HPE = age 45-65, working full time, earning at least $35,000/year.

Multi-life discounts determined by who pays the premium.  All discounts assume List Billing. The following discounts are available:

• 10% Employee Advantage Program® (Voluntary, no employer contribution)
• 15% Corporate Advantage Program® (Employer pays for at least $50,000 benefit pool; buy-ups allowed)
• 20% Executive Advantage Program® (Employer pays all premium; no buy-ups allowed)
• Marital discounts available in addition to worksite discounts

Prior meeting with your client:  Do a thorough review of your client’s information such as occupation, income, investments, real estate investments, current coverage, etc.

During the annual review:  To help determine how much income protection your client needs, ask questions about their personal/professional life to identify any changes that might impact their financial plan.

Request DI Quotes/Illustrations: Following your meeting, complete a quote request and the Insurance Partners will find your client the best coverage options for their needs.  We’ll create a carrier comparison highlighting the best solution for protecting your clients financial foundation.

To request a quote:

1. Complete and Email the printable/fillable form
2. Complete and Submit the online form
3. Call 913-954-5400 to speak with a Disability Insurance expert.

For example:

• On line 6c, dependents are listed. Dependents may need to be protected in the event of a premature death of the parent
• Line 8 lists taxable interest earned. Perhaps there is a way to defer interest into the future, which will reduce current taxable income
• Line 12 lists business income
• Lines 28, 29, and 32 list contributions to various types of retirement plans. This indicates that the taxpayer has done some planning–but when was it last reviewed?
• Schedule A, line 10 lists mortgage interest paid. How will the mortgage be paid if something happens to the homeowner?
• Schedule A, lines 16 and 17 lists charitable gifts. Is there a need to continue these gifts after the death of the taxpayer?

Solution

The products you can offer your clients and prospects can be helpful in:

• Deferring tax on the growth of cash value accounts
• Achieving retirement planning goals
• Assist in continuing a business for generations to come
• Protecting dependents from loss due to the premature death of a parent
• Providing cash to pay an existing mortgage

Adapted from Mutual of Omaha

Why employees of large companies?

• They represent a BIG opportunity — With more than 61 Million people in the U.S. working for large companies*, this target approach has great possibilities.
• They need income protection and group disability coverage at work may not be available.
• Fill the gap in income protection – Employees of large companies may have group disability coverage, but it still leaves a significant amount of income unprotected.
• Many work in ideal occupations and they have potential for career growth and increases in their income over time.
• Discounts available — Possible multi-life discounts in the range of 10-20%** can be used as a great door opener and referral generator.

Need assistance reaching this market?
Now that you realize the market potential, how do you reach this market? The Insurance Partners can provide the resources you need. Send us your questions and quote requests today!

info@theinsurancepartners.com
913.951.5400

*Companies with 500 or more employees, Statistics of U.S. Businesses, 2008 (most recent available.)
**Depending on the Carrier, typically available when three or more employees with a common employer purchase products.

Clients with Group LTD coverage often don’t see the need for Individual Disability Insurance because they falsely assume the coverage through their employer protects enough of their income in the event they become disabled. While Group LTD is a good safety net, it still leaves a significant amount of income not protected, especially since group benefits are often taxed.

In the example below, you can see that the client only receives $48,000/year net group benefit when disabled compared to his $160,000/year net income. Use an example like this one to show your client the amount of income that is left unprotected even when they have group LTD. Most people won’t ignore the “pay cut” they would take in the event of a disability.

 The Insurance Partners will find your client the best coverage options for any situation.

Let us shop the DI marketplace for your client.   We’ll create a carrier comparison showing the best solution for closing the gap on your client’s Group LTD coverage.

Contact us today!
info@theinsurancepartners.com
913.951.5400.

START A FAMILY-FOCUSED CONVERSATION

LTCi is an emotional sale. There’s a growing trend that shows many people purchase a policy, because they know someone who needed LTC services. They heard first-hand accounts of the importance of a caregiver, the high cost of LTC services and the impact that can have on a family.

The fact is, people buy LTCi because they love their families. So, rather than focusing your sales presentation on benefits and features of the policy, focus your conversation on how the need for LTC services can impact the client’s family.

Here are five conversation starters that can help you make a family-focused sale:

1. I’d like to talk to you about living a long life and how to be prepared in order to protect your family.
2. Long-term care insurance is not protection for you. It’s protection for your family.
3. Long-term care is a family issue. Do you have a plan to protect your family?
4. It’s not a question of who will take care of you. Your family will because they love you. Instead, it’s a question of how your family will take care of you and the impact it could have on them.
5. Long-term care insurance allows your family to keep the promise they made to take care of you by providing the funds to help them do it better and longer.

Let The Insurance Partners help you with your next LTCi Quote.
Once we have the necessary details, our Long Term Care experts will provide you with the best coverage options for your client!

Complete the Online LTC Quote Request Form OR give us a call (913) 951.5400.

Take a look a Principal Financial Group’s quick, 5 minute video highlighting three successful approaches to selling Individual Disability Insurance.

In this video, you’ll hear real agents talk about the successful ways they present DI. Below are the highlights to each approach.

APPROACH #1: Wants vs. Needs
Drive clients thought to get them thinking about what’s important to them. Use real examples to point out where they are investing on their wants vs. what they need.

• Want — The average monthly technology costs is approximately $400 including smartphone, iPad wireless service, cable, Netflix, etc.
• Need — For 1-3% of your income, clients can get income protection that will help pay bills when too sick or hurt to work.

APPROACH #2: What If?
Ask clients “What If?” questions to help them recognize the importance of their paycheck and get them thinking about Plan B. Also, try comparing auto insurance vs. DI so help them see that they aren’t insuring their most valuable asset.

• Example questions: Why did you set you alarm clock? —- Why do you go to work? — What if you couldn’t go to work? — What if you couldn’t earn your paycheck? — What if life doesn’t go as planned?”
• Comparison:  Auto insurance cost  approx. 12% of the cars value ($125/mo) vs. Disability Insurance which costs approx 1.8% of income ($230/mo)

APPROACH #3: Mental Checklist
Get your clients thinking about their plan for illness or injury that leaves them unable to work by having them:

• “Imagine if you woke up in the hospital and it was the worst case scenario?”.
• Think about the everyday items (Health Insurance, Emergency Contact, Sick Leave, Life Insurance, Child Care, Pet Sitter, Lawn Service), then ask them if they have “Income Protection and who will pay their paycheck?”

Find an approach that works for you, make it your own and practice it prior to meeting with clients.

Let The Insurance Partners find the best insurance solution for your client.
Contact us today: info@theinsurancepartners.com OR 913.951.5400.

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Did you realize?
Half the people who look into income protection, after being approached about it, buy some type of policy.*
There are over 55 million people in the U.S. between 25 and 64 who earn $40K or more.**
Only 7.4% have individual disability policies.***

*LIMRA MarketFacts Quarterly, 2012
**U.S. Census Bureau – 2011 American Community Survey
*** LIMRA 2011 U.S. Individual Disability Income Insurance Annual Supplement.

Many advisors believe in long term care insurance (LTCI), yet struggle with the complexity of the topic when attempting to discuss it with clients. They often get lost in the details, leaving clients feeling overwhelmed by the number of decisions they’ll need to make.

This is the very reason I recommend advisors not talk about the insurance at all!

The reality is that few planning issues get solved when the topic is approached from the product side of the equation. Take, for example, a client’s need for life insurance. Many successful life insurance advisors will recommend starting with a question, in order to focus your client on what the consequences to their family would be if they should die too young. Similarly, to be successful in dealing with a client’s long-term planning issues, the first step is to help them see the need for LTCI; they must understand the consequences to their family should they ever have an event that brings about the need for long-term care. This is why I recommend not going directly to the subject of the insurance itself when starting the conversation.

Instead, a great question to start the dialogue is, “John and Suzy, when you think of each of your four parents, and each of your eight grandparents, did any of those twelve people reach a point in their life where they could no longer live independently?”

At first you might think this question is simple, yet it is specifically worded to guide your client’s understanding of LTCI. We want them to not only think of their parents and grandparents but also of their in-laws as well; so be sure to enumerate how many people you are asking them to think of. Our goal at this stage is to redefine their understanding of the words “long-term care insurance,” which typically in their mind is equivalent to “nursing home insurance.” By inserting the words “where they could no longer live independently,” you will properly define the scope of the conversation that will follow.

I have yet to meet a person in the right age demographic for this insurance who hasn’t had an experience of their own that they can relate to when they’re asked this question. Upon hearing it, they’re forced to think about how their family members’ lives ended, and quite naturally, they start talking about that experience.

Now you have the opportunity to dive in to your client’s specific family history with some additional questions. I recommend asking, “How did this experience change the family dynamic? Did it change how your siblings interacted with each other and with your parents?” Then you can delve into other subjects, such as how much this whole episode cost the family. Given all the questions you can ask in order to learn more about your client’s experience, you could easily go on for another 20 minutes.

The ultimate goal of this line of questioning is to get the client to agree that a similar chain of events could happen to them. I like to ask, “Have you ever thought about how a similar experience would be handled in your own family?” This is typically where you hear some of your first objections, such as, “My kids will take care of me,” or “Isn’t this the reason why the government created Medicaid or Medicare?”

There are many different versions of these objections, but they all tend to deal with the money side of the problem — and not the issue of “living independently at the end of their lives.” Take this opportunity to refocus them on the real issue: “So if I understand you correctly, you do believe that you could have a similar experience in your family. Would you be interested in learning how you can live independently without burdening your spouse or children, like your father did?”

Now that you have gained their agreement, you can educate them. The first step in this process is to learn more about their current health and financials. You will want to ask them for their height and weight as recorded by their doctor, a list of medications with reasons for taking them, and whether there has been any major medical diagnosis within the past 5 years.

This is also a great time to give them a cursory understanding of the cost of care and ask, “If you were required to pay for these expenses on your own, which of your current assets would you liquidate first?” Now you have the information you need to medically prescreen their health for the insurance, and the financial information to show your client how they can pay for the premiums of the insurance.

Remember, you don’t need to avoid discussing long-term care insurance because of the complexities of the topic. Stop selling the insurance product altogether — because we all know selling a product is more than likely going to fail —and get back to selling the consequences to their family if an event were to take place that creates the need for long-term care.

Most clients are looking for advice that will help them retire well — and living independently when the worst happens is key to every client’s financial plan.