As a financial planner, helping clients
to assess and manage risk is
a major part of my role. Contemplating
the loss of earned income
due to an accident or illness is never
But would that young dentist be able
to maintain his lifestyle if an unexpected
injury meant he could no longer work in
his practice? What about the high-powered
executive-how long could he keep
up with his mortgage payments if he
were suddenly ill? Or all of those small
companies where the business owner is
truly the business, too. How long would
orders be filled, bills be paid and payroll
be met if he or she were absent due to an
illness or injury?
Sure, all professionals "hope" an illness
or accident won't happen to them.
But while hope is a compelling political
slogan, it's a very poor risk-management
strategy. So, how do you assist clients in
making the choice to purchase disability
income protection, particularly those
who are concerned about price?
1. Beyond Hope:
Let Reality Set In
First, help your clients realize it really
could happen to them. There are numerous
sources which provide excellent
statistical information regarding claim
probabilities-and I use them. Stories of
real clients, though, who have actually
made claims on their disability insurance,
seem to resonate on a deeper level.
Here are a few examples that I use
• One man in his 30s purchased a disability-
income policy, along with life
insurance and retirement plans. As
the application was still in underwriting,
I received a phone call from him.
While exercising on his lunch break,
he fell and seriously injured his hip. He
was out of work for months but that DI
policy helped sustain his family until
he got back on his feet.
• Another client in his 60s, nearing
retirement, was funding his 401(k)
plan during his highest earning years.
A medical condition came on that precluded
him from operating the equipment
on his job. He was forced to take
an early retirement and draw from his
Fortunately, both families avoided devastating
consequences because they had
insurance in place.
2. Advocate from
Their Point of View
After helping my clients understand their
risk of disability and the benefits of protection,
I'll simply tell them that buying
insurance may not be the right thing for
them to do. They're already not likely to
buy disability income protection or else
they would have it. Many clients feel
"insurance poor" already-paying for car,
home, business, life and health insurance.
However, acting as their trusted advisor,
I would suggest we look at what is "at
risk." What would happen to your business
if you couldn't show up for work
one day? How would you pay for simple
necessities-a place to live or groceries?
Where would the money actually come
from? Are there accounts you could
draw from? What asset would you liquidate
first? Would you use credit cards or
get a loan? How quickly would the line of
credit from the bank dry up if they realized
you were unable to work? How would
you pay it back?
Most likely the client has never thought
about these things in depth. But now, they
are faced with considering what they personally
have at risk, rather than just hearing
statistical information and stories.
This is when they will ask about pricing.
3. Work Backwards to
Develop a Plan
We often fall into the trap of gathering
the appropriate information to "work up
some numbers" and then come back with
a maximum-benefit package presentation.
We sell them on the greatest benefits, but
trap ourselves (and do our clients a huge
disservice) because they cannot afford the
benefit package presented. Then, when we
transition to a lower cost option, they're
often not interested because they're sold
on the higher benefits.
We would be better advocates for our
clients if, when they ask about pricing, we
were to instead discuss what they truly
felt they could budget for this risk protection.
After obtaining a reasonable premium
commitment, we can then customize
a disability insurance product to
best fit the client's needs and budget.
4. Let the Client Lead the Way
Several years in the industry, along with
a broad professional network through the
Million Dollar Round Table (MDRT) and
other resources, have taught me that clients
can be apprehensive about acquiring
protective products, even when all
the facts are on the table. But by taking
a budget-focused approach and allowing
clients to set the parameters, I am able to
assure them their income is protected.