The hardest part of the disability insurance conversation isn’t the products. Or prices. It’s getting started. Face it: If you’ve put off having the talk with your clients, it’s because you’re not sure how to break the ice.
It doesn’t have to be hard. I personally use three simple questions to start things off. The questions are designed to help the client think in real-life terms.
You don’t have to talk about funding. Or insurance plans, for that matter. All you need to do is make them see the importance of planning so you can head down that path – together.
Most clients will say no. People are typically unable to fathom the idea that they will ever not be able to work. Truth is, about 1 in 4 of today’s 20-year-olds will suffer a disabling event sometime in their lives.1
Some will answer that they have savings. Some will reference their employer’s group plan. Most will mention Social Security. While these are all great resources to utilize, they aren’t always a great fall-back plan.
While group disability is a great benefit to have, it isn’t guaranteed. Also, those benefits are taxable and only replace a portion of your income. Are your clients able to sustain their way of living on 60 percent of their income, and lose part of that to taxes?
Social Security … It’s difficult to qualify. That’s a huge understatement. The wait time is long. And the approval rate is only around 34-35 percent, after multiple applications and possibly hiring an attorney. If you do finally gain approval, the benefit on average is $1,300 per month.2 Most individuals will find it very difficult to sustain their quality of life on this benefit alone.
A common thought, especially for younger individuals, is that they would be able to rely on family members for support: emotional, physical and most importantly, financial. This should prompt a follow-up question: Can you name three family members who are willing and able to pay your bills for more than a couple months?
Your clients worked hard to build their financial future (and so did you). But once it’s gone, it’s too late. It’s our job to make sure that everything works when your clients can’t. To make sure their foundation is protected.
Don’t end the conversation before checking the last box. Check out these resources to SEE IT THROUGH – to create a solid financial foundation for paychecks, made possible.
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1 Source: Social Security Administration, “The Facts about Social Security’s Disability Program,” January 2018: https://www.ssa.gov/disabilityfacts/materials/pdf/factsheet.pdf
2 Source: Council for Disability Awareness, “The basics of the Social Security Disability Income Program.” October 2018: http://blog.disabilitycanhappen.org/the-basics-of-the-social-security-disability-income-program/
3 Gen Re, “U.S. Individual DI Risk Management Survey 2011,” based on claims closed in 2010
4 Gen Re, “U.S. Group Disability Rate & Risk Management Survey 2012,” based on claims closed in 2011
Meghan Cormany helps advisors add value and protection for their clients through disability insurance. As a sales development specialist, she provides sales concepts, training and solutions to help integrate DI into existing planning conversations. Meghan has been an integral part of the Ash DI team since 2008 and is a leader in disability sales.
NT-proBNP is a fairly new blood test, for both clinical medicine and insurance risk assessment.
B-type natriuretic peptide (BNP) and N-terminal pro-brain natriuretic peptide (NT-proBNP) are hormones produced by your heart to regulate blood pressure and fluid balance. Normally, circulating BNP and NT-proBNP levels are quite low – they increase when pressure in your heart changes due to increased blood volume, fluid retention or ischemia.
Due to its predictive value in assessing the strain to the heart, NT-proBNP is considered by American College of Cardiology to be the benchmark against other biomarkers for heart failure.1 Results may help determine if you have heart failure versus other causes of dyspnea (difficulty breathing or shortness of breath). Increased levels in patients with difficulty breathing show an increase in likelihood of heart failure.
Elevated NT-proBNP can also be found in other conditions, including acute lung injury, acute myocardial infarct, atrial fibrillation, cardiac amyloidosis, COPD, chronic renal failure, cirrhosis, hypertension, pulmonary hypertension, pulmonary embolism with associated right ventricular dysfunction and subarachnoid hemorrhage.
Normal NT-proBNP levels (based on Cleveland Clinic’s Reference Range2):
If you have heart failure, the following NT-proBNP levels could mean your heart function is unstable:
ProBNP levels are higher in women, older individuals and people with renal insufficiency. Some medications, such as ACE inhibitors, beta-blockers, spironolactone and diuretics have been known to decrease levels.
NT-proBNP has been selected over BNP as the superior test for insurance companies, as it is easier for parameds to correctly administer the blood draw. This simple blood test is run by carriers for certain ages and amounts, often in lieu of resting EKGs, and has helped eliminate the need for stress EKG testing at larger face amounts.
In their risk assessment, insurance carriers use NT-proBNP along with many other cardiac risk factors (hypertension, hyperlipidemia, family history of coronary artery disease in first-degree relative, tobacco use and diabetes) and any known history of vascular disease, atrial fibrillation, congestive heart failure and/or renal insufficiency.
Elevated NT-proBNP levels could prompt an underwriter to ask for additional cardiac work-up, such as a repeat blood test, stress test, echocardiogram and/or cardiology consult.
Ash Brokerage is here to assist you! To simplify your fact-finding process, use our NT-proBNP Client Questionnaire and reach out to us for help. We leverage our experience, carrier relationships and resources to identify viable solutions based on your client’s individual circumstances and insurance needs.
1Journal of the American College of Cardiology, “NT-proBNP: The Gold Standard Biomarker in Heart Failure,” December 2016: http://www.onlinejacc.org/content/68/22/2437
2Cleveland Clinic, B-type Natriuretic Peptide (BNP) Blood Test: http://my.clevelandclinic.org/health/articles/b-type-natriuretic-peptide-bnp-bloodtest
Diane Fulk has been in the life insurance industry for more than 40 years, helping many families secure much needed life insurance coverage and peace of mind. She approaches each case, like each person, individually. She is certified in EKG interpretations, has passed all three of the Academy of Life Insurance Underwriting exams and many LOMA exams.
Key person insurance isn’t a new concept. But, that doesn’t mean we can’t take a new look at it.
A few months ago, one of my advisors had a business owner client who approached him with concerns about key employees. The concern was two-fold. First, as is typical with key person scenarios, the owner was concerned – if his top buyer were to pass away unexpectedly, what financial impact would that have on his business? And, what plan could he put in place to stem the tide and reassure his clients all would be OK? Second, due to the specialized nature of this business, if this employee would leave and go to a competitor, what would that do to his bottom line and long-term growth opportunity?
Experienced buyers are vital to this client’s business, but hard to come by. He’s lost buyers to competitors in the past, so he asked, “What can I do to entice this guy to stay with me until he’s at least 65?” We thought about it … and we got creative.
In a typical key person scenario, term insurance is usually an advisor’s gut instinct. But, we went with something that has the potential for a greater impact:
This plan got resounding support from everyone – the business owner, his CPA and the employee – because it accomplished everything they needed. In fact, it was so effective, the owner decided to use the same strategy for three more people at his company.
The lesson here? Make sure you’re not always going with run-of-the-mill solutions. Don’t assume the client will want basic coverage – make sure you understand exactly what they’re looking to accomplish. The result could surprise you.
As an Ash Brokerage RVP, Mike Pompei works with industry-leading financial advisors, agents and centers of influence, assisting them with the creation of strategic solutions for their clients while enhancing their practices. With more than 25 years of experience in accounting, compliance, financial and relationship management, he has knowledge and skills to help in all areas of planning, including client consultation and point-of-sale support.
Single parents have plenty to worry about, especially when it comes to finances. We asked two of our own to share their thoughts on how you can help these clients.
Even though I’m a healthy 41-year-old with a good job, I have a lot of worries when it comes to finances. As a single parent raising a 13-year-old daughter and managing a single-income household, my biggest concerns are:
As an insurance professional, I know women tend to worry about the future more than men. And, as expected, single mothers worry more than average women.
Life, disability and long-term care insurance can help alleviate some of these worries, but the costs CANNOT be constricting to cash flow or savings – those things are still just as important! Keep that in mind when you’re talking to your clients who are single parents.
I have to agree with Teresa – cash flow, cash flow, cash flow! Money is always on the brain. We don’t live near my family or my son’s father, so I’ve protected us with two different approaches:
As an advisor of a single parent, you should ask a lot of questions. The first: Have they updated the beneficiary on their life insurance? Chances are, it’s still their former spouse, and most people don’t realize they should NOT make their child the beneficiary. Instead, they could establish a trust and designate a trustee to ensure their child’s financial needs are met.
If something did happen to your client, are YOU prepared to talk to their children and other loved ones about the plans in place? Your role becomes even more important in this situation. Make sure you’re the partner they can depend on.
Teresa Curreri is a senior LTC consultant partnering with agents to protect their clients and family from the uncertainty of tomorrow. She’s is a licensed life and health producer, and she’s been focusing on LTC for 15 years.
Gina Shaffer is a Senior Internal Wholesaler with more than 30 years of experience in the life insurance industry. She takes an extreme amount of pride in creating an impact and partnering with agents, their staff and their clients.
Sometimes, helping my advisors sell life insurance is an uphill battle – with them and their clients. I know it’s not the sexy choice, and it’s not an exciting solution that’s going to help people make a million bucks. But, it does enable peace of mind, which can be more valuable in and of itself.
With many years behind the scenes and out in the field, I’ve heard a lot of excuses. But, many of them just aren’t true. Advisors and clients are relying on myths, not facts, when considering life insurance.
Ask your clients: Is the amount really enough to cover your needs? Can you keep your policy when you retire or change jobs?
Many employers provide life insurance equal to one to two times the employee’s annual salary, and they may be able to purchase up to four to six times their salary. First of all, to replace a client’s income for their dependents, they typically need five to eight times their annual income – some experts even recommend 10 to 12 times. Second, their calculated “salary” doesn’t typically include commissions, bonuses, and second incomes. A needs analysis calculator can help you determine the amount of coverage your clients need.
Even if they do have enough insurance through their job, you’re clients will likely lose their coverage when they leave. That’s they should only include their employer’s policy in covering their needs if they can take it with them at affordable rates. Otherwise, consider it a bonus. Plus, they may be able to get a better deal on their own, especially if they’re young and/or in above average health.
Ask your clients: If your spouse works, how would you replace their income in your household budget? If your spouse stays at home, how would you replace their value in child care, cleaning and other household operations? What’s that add up to over several years?
Are you kidding me?! Spouses who earn less or are non-working are extremely important, and their contribution to your household needs to be protected. If you haven’t already, you should read my colleague Sharlene Woerther’s blog for more information on why spouses need life insurance.
This is yet another reason why it’s so important to do a needs analysis with your clients. Once it’s been put to paper, it’s amazing how many people see the value in their spouse’s contributions. Insuring a spouse also gives the remaining parent the opportunity to take time off work and help the family adjust to their loss.
Ask your clients: What do you spend on soda and snacks in a month? Could you give that up to protect the ones you love?
I use to tell clients that often times you can get life insurance for what amounts to a bag of chips and pop a day. Since then I’ve changed my diet, so I no longer buy those things anyway … but I wasn’t too far off with my estimates. You should run a quick quote for your clients and show them the real costs!
A study conducted by Life Happens and LIMRA found that 30 percent of Americans acknowledge their need for more life insurance, but only 10 percent planned to purchase it within the next year. The main reason given was cost, with 65 percent saying that it’s too expensive. However, 80 percent of them overestimated the cost. While the cost for a health 30-year-old would be about $160 a year, the average estimate was nearly twice as high.
Ask your clients: Are your conditions under control? When was the last time you looked into coverage?
Don’t worry if your clients aren’t able to run a marathon or keep up with a fitness video on TV – they don’t have to be perfectly fit to qualify. Yes, the healthiest people pay the lowest premiums, but the life insurance industry has come a long way I just a few years. Many who were deemed uninsurable in the past can now receive coverage.
A lot of companies cover a range of health conditions, and some even specialize in high-risk cases. Clients can also purchase a policy that is not medically underwritten at all – just be aware that they tend to be more expensive and have lower coverage limits.
Ask your clients: Do you know of someone who died too young? Have you ever seen a Go Fund Me page to raise money for a person’s family after they’ve died?
Social media is littered with examples of young families who’ve been impacted by the loss of a spouse or loved one under the age of 40. Accidents and illnesses can happen to anyone at any age.
The bottom line? If your clients have anyone who depends on them financially, they should have live insurance. Help debunk the myths and make sure they’re covered.
As a relationship manager at Ash Brokerage, Jason O’Barr is a teammate for advisors – identifying new sales opportunities, providing consultative and comprehensive insurance support services, and effectively helping advisors grow their businesses. With experience as a producer, a marketer and an internal wholesaler, he understands the process from the ground up.
© 2018 Ash Brokerage LLC.