Many people need disability insurance – but the needs of one person might not match the needs of another. A disability insurance needs analysis can help you provide tailor-made disability insurance quotes so that your clients get the coverage that fits their needs and you close more sales.
The Problem with the Spaghetti Approach
Have you heard of the spaghetti approach? It refers to throwing a bunch of spaghetti at the wall and hoping something sticks. If you throw out a bunch of generic disability insurance quotes in the hopes that some of your prospects will buy, you’re guilty of this approach.
While this may seem like the easiest way to deliver quotes, you can actually end up wasting a lot of time in the long run. To see why, you can’t just think about the time you save on the quote process. You also have to think about how much time you waste on leads that go nowhere and on client churn. If you can increase your success and retention rate by spending an extra 10 minutes or so on a needs analysis, you can end up saving a lot of time. You’ll also make more money, and you’ll help more people get coverage.
In addition to helping you provide tailor-made quotes, a needs analysis can help you achieve the following:
- Gather the information you need to make a compelling case. For example, price objections are common, and people may be especially likely to balk at the price if they think they’re being sold more coverage than they need. If you break down exactly how much coverage they need to cover their essential costs, as well as how much income they have to protect, you can overcome these objections.
- Stay within budget. You can also avoid price objections by learning about a client’s maximum budget and respecting that when you provide quotes. You may think a more robust policy is worth the extra price, but if your client isn’t willing able to spend that much, you’re not going to make the sale. Even if you do, the policy could end up lapsing, and that means your client will lose out on protection and you’ll lose out on renewal commissions.
- Modify your sales pitch. Objections can also occur when clients already have some disability insurance through work, even though this coverage may not be sufficient for their needs. If you’re not aware of their existing coverage, you might be caught off guard and lose the sale. However, if you learn about the existing coverage in your needs analysis, you can make a strong case for supplemental insurance.
Needs Can Change – Does Your Needs Analysis Keep Up?
Although it’s important to conduct a needs analysis with the initial disability insurance quote, it’s also helpful to conduct regular reviews to make sure the coverage in place still fits your client’s needs.
Over the years, your clients will likely receive raises and promotions that increase their income. They may also buy houses, have children, and take on other responsibilities that necessitate more robust paycheck protection. As a result, they may want to increase their coverage. Clients who have refused disability insurance in the past may also want to give it another consideration.
By helping your clients reassess their needs, you can also help yourself to an extra commission. You may even prevent another agent from swooping in to steal your client. The beginning of a new year is a good time to conduct an annual review.
Tip: The Future Purchase Option rider makes it easy to increase coverage – and you’ll get a first-year commission when they do.
How to Conduct a Disability Insurance Needs Analysis
A needs analysis should provide a thorough assessment of everything relevant to a person’s income protection needs:
- Age
- Occupation
- Income
- Expected income to age 65
- Monthly expenses
- Existing coverage
- Benefit amount needed to cover expenses
- Maximum budget
- Desired riders
This may seem like a lot, but with the right checklist, it’s easy to go over everything you need quickly and without leaving anything out. Don’t worry – DIS has you covered.
Get Ready for the New Year
Although the end of the year may not be the best time to meet with clients, it’s a great time to set up appointments for January. Reach out to your clients and start getting meetings booked for the new year. Get your DI Needs Analysis Form.