Exploring Niche Markets
Amongst the usual risk divisions of life and health insurance products, one can find many sub-groupings of unique plans that are extremely useful to the consumer and can be very profitable to the producer when one knows how and why to properly market and prescribe them.
Although commonly considered inferior as outliers to rank and file brokers, those with “bigger picture” vision easily recognize that niche products serve a masterful purpose in the greater insurance industry. Most were designed to compliment or fill coverage gaps in more mainstream product lines. They are used to supplement or even replace what can’t be found or acquired through the “traditional” marketplaces, and they answer a serious growing need in this country.
It is true that niche products are rarely primary considerations for the basic coverage needs of your clientele, as the policies tend to be less robust in term length and hold more renewability limitations than standard insurances. But, when an obvious solution isn’t readily available or when additional coverage is needed, but not allowed, or at least heavily limited by your usual carriers, niche-product lines can ultimately serve your clients very well and succinctly fill-in the glaringly dangerous holes in their life and disability benefits.
So why make the effort to market niche products? Why do your clients need these insurances that your domestic carriers don’t provide? The simple answer is that your clients are human beings, and nature and desire have made them fallible. Not everyone fits the pretentious mold set-out by standard-carrier underwriting and actuarial departments. I can bet that from time to time you come across prospects that are too fat, too old, have too many health issues, make too much money, make too little money, work overseas, skydive too often or did cocaine the weekend before an insurance exam. I expect that you can identify with having to deal with some of those common underwriting issues among your clientele. Millions of Americans, your prospects, face these insurance roadblocks, and insurance companies keep them from purchasing the financial protection they so need. And for that reason, the specialty, niche markets flourish and are worth exploring.
So now you are finding solutions for cases you thought were “dead in the water” so to speak. The niche markets will make you a hero and won’t send you back to your clients empty handed even if you have a client who works on oil rigs, has a history of depression, plays professional football or suffers from rheumatoid arthritis. Niche life and health products are the “yes men” in a room full of suspicious naysayers. It’s a very exciting aspect of the insurance industry, and can make you a fortune helping your clients. No matter how hard you work, no matter how many hours you put into a case, a declination of coverage doesn’t pay a commission.
Excess or high-limit disability insurance is a prime example of what the niche markets have to offer. If you have a client making in excess of $250,000 annually, you know that you will be hard-pressed to find a carrier willing to insure at least 65% of that client’s income. Specialty disability markets are your answer, and will be able to provide a supplemental layer of “own-occupation” high-limit disability coverage on top of existing individual or group insurance.
For your clients that have been declined by the disability market for their unconventional occupations, substandard health histories or ages, there are ample sources for impaired-risk disability underwriting. Niche-product companies have the unique ability to employ more lenient underwriting guidelines than the standard market, allowing your hard-to-place clients to acquire comprehensive income replacement insurance when your standard carriers say “no.”
Life insurance is also represented in the non-traditional market with products like contingent life insurance as well as Failure to Survive and Critical Asset Protection. These plans provide a simplified-issue, quickly underwritten key person death benefit to indemnify business contracts including loans and buy/sell agreements. And like its niche-market disability counterparts, the underwriting guidelines are more forgiving than those of U.S. life carriers.
You may not see a need for these solutions every day, but I can guarantee you the traditional U.S. insurance market is not always going to be able to assist every one of your clients every time they need insurance. The need for niche products is completely evident, and the secret to success in niche-product marketing is to be prolific. Provide solutions to problems your clients didn’t think of previously.
Look to the outlying markets frequently and not only when you hit one of those roadblocks. If you have an individual disability client, make sure to provide a quote for excess personal coverage as well as key person insurance to help protect their business.
There are so many specialty tools out there, and they are all designed to help protect your clients’ families, their businesses and their financial wellbeing. Don’t approach as a salesperson, approach as an advisor and perhaps even as a friend because you are providing more than a service for compensation, you are providing them with financial protection and peace of mind. These niche insurance markets are well established and regularly address the everyday insurance needs of all Americans. It will behoove you to think outside the box and look beyond your typical carriers.