There are myriad objections to buying DI, but the No. 1 reason people don’t buy it is they were never asked to buy.
The common objections to buying disability insurance involve some combination of the following:
Cost versus benefit.
The product (it’s too technical or it’s hard to understand).
No need for or belief in the product.
The application/underwriting process.
“My spouse works” or “My family will take care of me.”
The mindset of “I have other sources of income such as group short-term/long-term disability, Social Security, workers’ compensation or personal assets that can help me during the crisis.”
I may have missed a few, but you get the point that there are many objections that can derail the buying decision.
In order to overcome this, I believe it all starts with us — the agents. Our understanding of today’s buyers, the words we use to convey the importance of DI, the buyers’ perception of us and the value of our work all play an integral part in the DI buying decision. Although consumers have information readily available for them to do research, and technology allows consumers to do business more easily and more quickly, the need for income protection is as important now as it ever was. Young people don’t want to be sold (no one does at any age), but this is a perception problem until we demonstrate enough of a difference to change it.
Here are some recommendations for changing objections to agreements.
Start with the “why.” This is not why consumers need DI, but rather what is their why? Why do they get up every morning to go to work? Most do it in order to pay for their living expenses and to achieve hopes and dreams for themselves and their loved ones. We trade a very valuable commodity called time for a paycheck. But what if there is a break or an interruption in someone’s working years? Think of a word that would describe how they would feel from an emotional and a financial standpoint. This leads me to your why. We can change those terrible words or feelings to hope by delivering monthly checks because we planned for it.
Another common consumer objection is the belief that a disability would never happen to them or, if it were to happen, it would be from an accident.
The use of words and storytelling is very important in this instance. I never use the word “disabled”; instead, I use the words “sick” or “hurt.” I ask prospects whether they know of someone with a bad back or a heart condition, or if they know someone who is battling cancer. Everyone would quickly admit that they know someone in one of those situations, but, I ask, what if it happened to you? What sources of income can you count on to pay for your monthly expenses?
Most will respond that they have coverage at work and/or Social Security benefits. I then take an inventory of the expected dollars coming in and review their employee benefits booklet and their Social Security statement. These will let me know what is covered, how much, the integration of Social Security and employer plans, and when and how long it will pay. By helping clients identify dollars up front and not after the event, advisors can prevent more stress and surprises.
Finally, in everyone’s mind, are the questions “How much is it going to cost, and how much do I need?” DI does two jobs: It provides a monthly income and it preserves assets. If you don’t have the money to meet monthly expenses, those expenses will have to be paid somehow. If you have assets, they will be depleted quickly. So, getting your clients to own DI is a priority. Although I am an advocate for maximum income protection, having something is better than having nothing. Your client is the best judge of assessing the need and the ability to pay. They can always add more coverage, exercising their medical insurability options, or they can purchase more as they earn more.
Now we come to the cost issue. If you paid premiums and never collected, it would be a small financial setback, but if you need the benefits and don’t have them, you could lose almost everything. It all boils down to two certainties: You either pay premiums to transfer the risk or you pay in losses by retaining it. You can’t afford the latter.
Despite the many client objections to buying DI, there are many reasons why they need coverage. So, please give everyone a chance to consider purchasing DI, and change client objection to agreement.