DI Forum – Part I
A DI expert looks at the disability income market and what can be done to increase agent involvement in DI protection solutions.
What is your view of the state of the disability income protection market today?
I have said this each year for the past few years, but it remains true – it is the best of DI times! We have seen the return of an old strong DI player who went out of DI for a number of years. While there haven’t been more new players, those who are in the markets continue to expand product types, increase limits, and work with previously “undesirable” occupations by adding them or assigning them to better occupation classifications. This all points to an overall strong market in general.
GSI programs continue to expand. Of course GSI plans require multiple people to participate, but it seems this continues to grow.
In our operations, excess GSI continues to explode. Law firms, doctor groups, and pilots lead the way with the larger GSI cases. At the same time individual excess disability in both the personal and business disability markets remains strong.
What factors should influence producers to enter or step up their efforts in the DI market?
Factor A: The producer “thinks” talking about disability insurance will interfere with the higher commission life insurance sale or the group medical program.
Factor B: The producer “thinks” someone else is protecting the income! In a recent discussion with one of our reps a producer who specializes in employee benefits said he does not do “executive benefits” (they were discussing excess disability benefits). The producer went on to say they leave that for the client’s financial planner. They “think” someone else is taking care of the risk. However, we know that many financial planners “think” their client has enough disability insurance because they have employee benefits. In either case, there is an open door for someone, anyone, to talk the needs of income protection.
What suggestions do you have to help agents find success in the business market?
The business markets for disability insurance are even more wide open. Every insurer that writes disability insurance promotes the personal use of disability insurance and frequently avoids, or at least under-promotes, the business coverages. Also, there are only a few disability carriers that even offer business coverages which makes the opportunities even greater!
All businesses with partners have a need for a buy/sell agreement. Within the buy/sell there is a provision in the event of a disability. Do they need to insure this risk? No, but in the absence of a disability buy/sell, the company (or other partners) are self-funding the entire risk! Disability insurance plans are pennies on the dollar.
Often businesses who do purchase a disability buy/sell have a need to discuss a key person contract. All businesses have a key person. Sometimes it might not be obvious.
Lastly, business overhead is so frequently overlooked. We hear clients say “I can use my disability benefits if needed.” Really? The disability benefits are for the personal budget not the business. By using the personal benefits for the business budget the client loses the financial protection they needed to start.
So what are our suggestions? Open your existing client list and talk to them about business coverages. It’s that easy!
As seen in the October 2018 issue of Broker World Magazine