It is much harder to an insurance policy that you yourself do not own. It is a fact that over 75% of life and health insurance agents do not own a disability income insurance policy. Why? One reason is they do not believe strongly enough it will occur to them. The main reason is that they can not afford the costs of a quality DI policy. On the other hand, around 80% of life and health insurance agents own some life and health coverage.
Disability income insurance is very complicated to sell. There are so many waiting day choices before a claim becomes payable. The time period for the client to receive benefits ranges from 180 days to age 65. Rates are further affected by a person’s occupational rating. Plus, throw in at least a dozen optional riders that still need to be discussed. The agent does not have the rates on the policy brochure or an easy lookup sheet. Instead the rate manual is the size of a bible and weighs more.
Often the policy requires a two part sales process. The first interview means asking the prospective client countless questions about deductible time, benefit period, exact occupational hazards, and optional benefits. Then of course there are all the medical questions that need to be asked to pass the close examination of the underwriters. By this time, the client fells this no longer an appointment but an interrogation. A dentist appointment without medication is far less painful. The second part of the interview will be after the agent receives a proposal explaining the benefits and exclusions.
Watch the premium. When you finally present the disability income proposal to the client, price shock immediately strikes. This is often worse than new car sticker shock. Your client really has to desire your product to make a decision. The policy looks more like a luxury than a necessity, and you need to use key salesmanship to pull off the sale. You can also bet that if your client ever submits a claim, there is going to be a thorough review before one cent is paid.
There are actually three times of disability coverage. Blue collar disability is for the vast amount of manual labor workers. Their rates are high, because the chances of claims even off the job are much higher. They tend to putter around with projects they should have never attempted. White collar disability is for office people and professionals. Since some are in high income brackets they desire high benefit coverage to keep paying off their big mortgage payments and luxury items. Last is “poor man’s disability coverage.” This insurance policy provides only accident benefits and not sickness coverage, but at very affordable rates.
Throughout my successful insurance career, I sold maybe 6 white collar disability income insurance polices. To blue collar workers it would total about 15. However with accident only disability coverage the total exceeds over 150 sales. And this is from a salesperson who personally owned a policy, until I stopped selling insurance. Then shortly after I dropped the coverage. Afterwards I never received any phone or mail solicitation from an agent coaxing me to cover by butt just in case.
A valid reason for insurance agents not pushing disability income coverage is the commission rate. Why make two appointments to attempt to sell this policy. You can get paid a higher rate of commission for easy to sell term insurance on a 45 minute appointment. In fact, many higher premium life insurance policies pay twice as much in commissions to the insurance agent.
I was dumb and did not beat the odds. At age 52. I was hit hard health wise and ended up on permanent Social Security Disability for life. Having your income shrink 75% overnight is enough to give anyone a heart attack. Fortunately during by good income years I was smart enough to save money and invest it heavily. Otherwise I would have lost my home, vacation property, and savings in quick fashion. I was blessed with my previous good fortune, yet there are many days I still feel like giving myself a good kick.
When things were going great, I neglected to keep my disability income coverage running. Please do yourself a favor, agent or not. At least sacrifice a little to bring stability to your life if a health or accident disaster strikes you.
Source by Donald Yerke