When budgets are tight, it’s smart to cut back on things like fancy coffees and multiple streaming services to save money. But, what about disability insurance? Cutting coverage could be a big mistake. If disability strikes when you’re already having financial difficulties, the situation could become dire fast. Help your clients secure the paycheck protection they need by using these four strategies to overcome price objections.
1. Offer the Right Riders
For clients who are worried about their finances, the right riders make disability insurance particularly attractive.
What are your clients worried about?
- Inflation. Suggest the cost-of-living-adjustment rider. When you’re on a fixed income, inflation is especially problematic because it means your limited funds don’t go as far. This may be an issue for people receiving disability insurance benefits. However, the cost-of-living-adjustment rider helps disability insurance benefits keep up with inflation.
- Retirement. Suggest the retirement protection rider. Many people are already behind on their retirement savings. If they can’t work due to a disability, they risk falling even further behind. The retirement protection rider helps by covering contributions to a retirement plan during a period of disability.
- Student loans. Suggest the student loan rider. Many workers are burdened with costly student loan repayments. If they can’t work due to a disability, they may be unable to keep up. A student loan rider helps cover student loan payments during a period of disability.
2. Stay Cost Conscious
The right rider may make disability insurance more attractive, but offering too many riders will cause the premiums to surge. If your client doesn’t need a rider, dropping it is a good way to lower the cost of coverage and increase the chance of a successful sale. For example, own-occupation disability insurance is vital for some workers (such as doctors), but it may not be worth the extra cost for many workers. Before you decide which riders to include in your disability insurance quotes, spend time learning about your client’s needs.
Also keep in mind that some coverage is better than no coverage. You might want your clients to purchase maximum income protection, but that’s not going to happen if they can’t afford it. It’s important to sell policies that your clients will be able to keep in force for a long time. That way, they stay protected and you receive renewal commissions.
One tactic is to provide three quotes: one that provides the bare minimum coverage, one that provides maximum coverage, and one that falls in between. Then, you ask clients which option they want. Use the disability insurance quote options worksheet to deliver three levels of coverage.
3. Overcome Price Objections
Disability insurance typically costs around 1% to 3% of a person’s annual income. That may seem expensive, meaning price objections are common. When budgets are already tight, people may be unwilling to spend money on coverage they don’t think they’ll need.
Of course, the reality is they might need it. Also, disability insurance provides good value when you consider how much it protects.
To overcome price objections, there are three things you need to do:
- Drive home the risk. Disability is more common than many people realize and can impact everyone. Help your clients understand this with the Shocking Facts Handout and the Four Stories to Illustrate the Value of Income Protection Handout.
- Highlight the cumulative value of a person’s income. A person’s paycheck is often his or her most valuable asset, but many people don’t realize that because they’re thinking about their salary one check at a time. Use the Implications of Income Loss Infographic to show the cumulative value of a person’s income and the impact of income loss.
- Present the price smartly. If you shock your clients with what seems like a pricey premium, you may lose sales. It’s important to frame the cost of disability insurance in a way that emphasizes its value. Try using the unit selling method or the high-low method.
4. Use a Waiver of Liability
A waiver of liability is a simple form that clients sign that shows you have explained the importance of disability insurance but they have decided to decline coverage.
Imagine you have a client who is newly married, has purchased a house, and is now starting a family. You help your client secure life insurance, but you don’t mention disability insurance. Two years later, your client is diagnosed with cancer, can’t work, and is facing financial ruin. The client files an errors and omissions lawsuit against you for failing to offer disability insurance.
Now, imagine the same scenario – except you DID offer disability insurance and the client declined. Would you be able to prove that you offered coverage?
A waiver of liability is evidence that you’re doing your job to protect your clients. It’s also a last-ditch effort to seal the deal. Although some clients will hold firm in their decision not to buy coverage, others will second-guess themselves when they realize how serious the decision is.
Get your waiver of liability form.
Disability Can Strike at Any Time
Some people may want to put off buying disability insurance until their finances are in better shape, but as disability can strike at any time, waiting is risky. In fact, disability insurance is even more vital amid economic uncertainty.
Portable coverage offers better protection during layoffs. Some workers have group disability insurance through their jobs, but they’ll lose coverage if they are laid off. Individual disability insurance is portable, meaning policyholders can keep it when they switch jobs.
Economic uncertainty chips away at other financial safety nets. Some workers might think they could get by during a period of disability because they could rely on the income of a spouse, their emergency savings, or financial help from their family. However, when everyone is dealing with financial insecurity, none of these may be possible. What happens if you become disabled right as your spouse is laid off? What happens if you’ve already used up your savings due to financial difficulties? What happens if your family members can’t help because they’re struggling financially, too? Disability insurance provides another layer of protection.
Locking in low rates makes long-term sense. Some people don’t want to buy disability insurance because they’re young and healthy – but that’s the ideal time to buy. If you buy coverage before you have any health problems, you’ll secure better rates and coverage terms. Also, since insurance doesn’t cover pre-existing conditions, it’s important to secure coverage BEFORE you suffer a disabling health condition.
Ultimately, disability insurance provides critical paycheck protection. That’s important when times are good, but it’s even more important when times are hard. If your clients are worried about their finances, talk to them about how income loss would make matters worse and how disability insurance can provide protection.
Need more ideas on how to make the case for disability insurance? Check out our sales tools.