DIBroker Blog

Disability Insurance Sticker Shock and Job A, Job B

Sticker shock is a common problem in the disability insurance world, especially for new financial planners and insurance agents who have become used to the very low cost of term life insurance.

The cost of a good DI policy, something like a 90 elimination period, with a to 65 or 67 benefit period, residual (for partial disabilities), protection in your own occupation, and a purchase option (for us that would be the outline of basic, but very good policy for a professional) typically costs between 1.5% and 3% of income. And the premium goes up significantly with age, among other factors.

You are a young agent and you just sold a million dollar, 20 year term policy to a 30 year old female for $365 a year. How do you sell a policy that costs 2% of her income–say $2,000?

First, start with the need, not with the quote. For example: What would happen if you got sick or hurt and could not work for a few years?

Second, let the client know you can help her find the right solution to her need, but make it clear up front that good coverage is not cheap and that there are very good reasons for that–most notably the odds of making a claim on a disability policy are much, much higher than the odds of dying during your working years (of course the odds of dying are 100% eventually, but hopefully later).

Third, Job A, Job B.

This idea is a classic in our industry. My father used it 30 plus years ago, but I don’t know who first thought of it (an unknown home office person in Marketing at Provident or Unum or Paul Revere back in the day?–whoever it was, my thanks to you).

It is Disability Awareness Month, and in honor of that unknown creator, the simple, but perfect context for the DI sale:

You are looking for a job. You have two offers: Job A pays you $100,000 a year if you are healthy and can work, but nothing if you are sick or hurt and cannot work. Job B pays you $98,000 a year if you are healthy, and $60,000 a year (tax free) if you become disabled and cannot work. Which job do you choose?

No one ever says they choose Job A.


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