The #1 reason brokers give for not presenting disability income to their clients is the underwriting process is too difficult; and as a consequence, it creates a negative relationship with their clients. It may be time to consider simplified underwriting.
Disability Income is underwritten differently than life insurance because the risk of a disability is greater than death with many of today’s medical conditions.
Is it time to start quoting monthly benefits that fall within the parameters of simplified underwriting?
You may not be aware that many disability income carriers reduce the underwriting requirements for applications that fall within the guidelines for simplified underwriting. For executive and professional occupations classes, disability income carriers will initiate simplified underwriting on applications with up to a $6,000 monthly benefit.
What is simplified underwriting?
No income documentation or lab tests are required when the monthly disability benefit applied for falls within the simplified guidelines of the carrier.
The drawbacks of traditional DI underwriting
Clients feel uneasy about sharing personal information about their income and health. In addition, they are inconvenienced by the task of providing tax returns and submitting to medical tests.
Who Needs DI?
Every existing client and every new client needs to be approached about income protection. All the financial planning you do with your clients, rests on their ability to earn an income.
Simplified Underwriting Cracks Open the DI Door
Your clients’ income may qualify for a higher monthly benefit that does not fall within the simplified underwriting criteria. However, if you and your client never have the discussion about income protection because the underwriting process is too complicated and difficult, your client’s income is at risk in the event of a disabling injury or sickness.
DI Sales Strategy: Open the DI discussion with your client with a monthly benefit that falls within the simplified underwriting criteria. The client will have some income protection, and the underwriting process will be less taxing.
When you crack the door, it opens new opportunities
Once your clients experience the peace of mind income protection provides, and the simplified underwriting process, you can approach them again at the annual review to consider adding more coverage….this time it may require tests and income documentation, but they will be more willing because they understand the benefit and the initial underwriting experience was not difficult.
It’s a Win-Win for you and your clients
Your client gains peace of mind. His income is protected in the event of a disabling injury or sickness!!!
As the broker, you become more confident selling DI. As you sell more disability income, your income stream from your DI sales grows. Unlike life insurance, disability income pays renewals for 10 years and beyond, depending on the carrier.
Source Brokerage can help you be a D.I. expert.