Next, ask them what happens if they
become disabled without income protection insurance. Obviously, they lose their
ability to earn a living. But what happens
if they apply for an income protection
policy after they have a disabling illness
or injury? They can be just as difficult to
insure as a burned house.
With this in mind, clients have a bigger need. They lack income protection
and their chance to secure the protection
could disappear at any time. The only
way to solve this big problem for sure is
to buy an income protection policy today
— before illness or injury strikes.
Of course, this conversation should
take place before you present your policy
Pave the way to fewer price objections.
One of the biggest reasons DI policies
fail is price. Advisors forget to establish price expectations up front, and
clients are shocked when they learn
how much policies cost. It doesn’t
have to be this way. Most DI policies
cost 3 to 4 percent of gross income. It’s
important to let prospects know that
early — with a caveat.
Also, let them know how much is
being protected. Calculate the client’s lifetime income potential using
the calculator at www.lifehappens.org/
earning potential is more than $1 million. When you compare the cost of a
DI policy to the amount it is protecting,
the price is very reasonable. Never tell
clients that DI is expensive. Tell them
that for as little as 3 percent, they can
cover up to 80 percent of their incomes.
When you state it that way, DI is remarkably affordable.
38 July 2013 / LIS / LifeHealthPro.com
Be present. Although we are living in
a virtual world, in-person meetings still
convert sales much more effectively than
email. Never let clients review proposals
on their own.
Present low cost, high value. To further
illustrate the value of DI, always present
the lowest premium cost (cost per day)
beside the highest benefit value (lifetime
earning potential). Asking someone to
spend $16 a day to protect more than $1
million of income sounds much better
than asking him to spend $6,000 a year to
protect $200,000 of income.
Recommend one option. A confused
mind never buys. Therefore, it’s your
job to keep things as simple as possible.
If you have a pricing analysis for several
carriers, avoid giving all that information
to the client up front. It’s overwhelming.
Carry it with you, show the client you
did your homework by shopping at least
three carriers and then make your best
recommendation. They’re counting on
you to be the expert.
Always summarize your recommendation in writing. This practice
demonstrates your professionalism and
documents your file. If the client doesn’t
proceed immediately, you also have an
easy reference point to pick up the conversation when you follow up.
Pre-fill the application for the preferred carrier. You should never waste
part of your meeting time completing
basic details you already know. Pre-filling known fields of the application demonstrates preparedness. It also allows
you to focus your client time on more
Listen with a mission. One of the big-
gest mistakes advisors make is failing
to really “hear” what clients are say-
ing. If clients don’t seem convinced
about your recommendation, listen and
follow their lead. Many clients will
immediately gravitate to one carrier.
Ask questions to uncover the reasons.
Often it’s something unexpected, such
as the fact that a relative works for the
Seize the moment by knowing the cost
per $100. After you present, many clients will ask how much other benefit
amounts cost. For example, if you’ve
presented a $6,000 monthly benefit, the
client may ask, “How much would it
cost if I went with a $5,000 benefit instead?” Never respond that you will find
out and get back to the client. Instead,
provide an immediate ballpark by using a simple cost per $100 calculation.
Here’s the formula:
Annual premium ÷ monthly benefit ×
100 = cost per $100
Plug the values of the policy quoted
into the formula to determine the cost
per $100. For example, if a $6,000
premium offers a monthly benefit of
$10,000, you know the cost per $100 is
$60. ($6,000 divided by $10,000 multiplied by 100) To determine the price for
a $5,000 benefit, simply determine the
number of 100s and multiply by the cost
per $100. So, $5,000 divided by 100 and
multiplied by $60 equals $3,000.
Be frank with medical and financial
questions. Don’t be afraid to ask hard
questions. It can save a lot of heartache
later on. If you recognize a potential
issue, you can explore a guaranteed
standard issue policy, rather than wasting time on a policy that will likely be
denied or laden with exceptions. Ask
if clients have any medical conditions.
Also ask what medications they take. On
the financial side, you need to ask for
their annual income and let them know
the figure will need to be documented by
a W2 or paystub. If the client is a business owner, ask about net income after
all business deductions.