Spring 2009
Of Hummingbirds, Galileo and Disability Insurance
by Steve Brady,
Second Vice President, Individual Disability Insurance Sales, Standard Insurance Company
Selling disability insurance has a lot in common with teaching. Your students must discover truths you help them to discover and then you partner with them to pass the final exam and place the policy.
The truths you want them to discover in this teaching we call selling, need to start with the basics they may already understand, but have not yet faced.
Facts:
- Disability happens. Three in ten working Americans will experience a long term disability during their working years. As of the last U.S. Census, more than 50 million Americans were classified as disabled.1
- Disabilities today are tending to last significantly longer than before. In 1981 a 40 year-old might be out of work with a disability for 4.3 years.2 In 2005, a 40 year-old's disability could last 6.6 years.3
- Advances in medicine mean illnesses that used to result in death, now often result in disability. For example, while deaths from heart disease dropped 29%, disabilities from heart disease increased 36%.4
- Every 30 seconds someone files for bankruptcy in the wake of a serious illness.5
Sometimes facts have a difficult time becoming truths for anyone. If I feel I am invincible and that disability will never happen to me, then all the facts to the contrary will not convince me of the truth. Truth has to be personally discovered. The following is an illustration of how facts became truth during a disability insurance sale.
A business owner with a few employees was very successful. Future growth and success in his specialty market rested on his shoulders. He had plenty of life insurance to protect his family, but no disability insurance. I had presented the facts about disability with as much feeling as possible during two prior meetings.
On my way to the third and final meeting, I happened to see a hummingbird lying on the sidewalk next to my parked car. It was beautiful with green feathers on its breast as it breathed heavily on its back. It was obviously hurt. I was pained by the desire to do something for it.
I wondered, "Would it live long? Should I put it out of its misery? What would onlookers think?"
I left the hummingbird and went to my appointment. The beauty and pain involved with that hummingbird bothered me all the way to the meeting, so that when I arrived at the business I asked the owner what I should have done. He saw the concern on my face and in my voice, but could not offer a solution. I then asked him to imagine he was the hummingbird, lying in a hospital bed hurt, as his family looked at him not knowing what to do.
He paused and looked me square in the face and said, "You are going to get me on some hummingbird story?"
We laughed. The facts had become truths and he became a disability income insurance policyholder.
As teachers, we often need to persuade our students who already believe in and have disability insurance, to believe in and choose the disability insurance that is best for them. Often I find customers — like those who rely on association disability insurance plans — because of premium differences, unable to budge from the belief that they already own the right insurance for them.
Here is how you can demonstrate the significant advantages of coverage over cost.
The premium for an executive's individual disability income insurance (IDI) coverage provided by his association, was $1,700 annually. The premium for the IDI coverage I recommended was $10,000 annually. Why would anyone pay that much more? Here is how it happened. It can be a common occurrence once the students understand the truth.
The truth is: You can choose your disability insurance. You cannot choose your disability.
The best way to highlight individual disability insurance provisions is to walk your customer students through five different disability claims to see how each IDI performs. The following five types of claims encompass all types of IDI claims. The incidence of disability increases with each step down the list.
1. Total, permanent disability is what people think of when they imagine a disability — such as becoming a paraplegic as a result of a car accident. This actually happens less than 1% of the time in the real world, but it is almost all that happens in the students' imagined world. To make these facts become truths, requires some groundwork.
The presumptive disability feature of IDI becomes important — not just for a paraplegic, but also for someone losing eyesight, hearing, and speech. All such losses are covered and paid for with IDI even if the insured person returns to work and generates an income.
I usually ask if this is reason enough to change to more expensive disability income insurance, and I say "No" before they answer.
2. Total, long term disability is illustrated well by a back injury that makes it impossible to stay in one's original occupation. Back problems are the second most common kind of disability. For these, IDI coverage focuses on the ability to perform the duties of one's occupation. There is no limit to the time frame, no needed or forced rehabilitation. It is pure protection in one's occupation.
I usually state that both association plans and IDI coverage act the same on this one. The only difference, usually, would be if the policy had added own occupation coverage and the insured tried to work at something else and make the same income, then the association plan would not pay and the IDI policy would. I don't make a big deal of it and say it rarely happens and certainly is not enough reason to pay that much of a premium difference.
3. A total, partial disability can be illustrated by a heart attack that requires a period of time of total disability followed by a mandatory period of recovery with a partial disability. Income is less because work performed is at a slower pace or during fewer hours or with limited duties. Most association plans have provisions for partial disability and the loss of income required is about the same as that for IDI, so I say that if the insured meets the requirements for partial disability, then there really is no reason to switch to the expensive insurance — yet.
I have now laid the groundwork for what follows in number 4. This is where the sale is made if the facts become discovered truths.
4. Partial, progressive disability can come about as a result of MS, arthritis, cancer, AIDS, stroke or heart attack, or even back problems. There usually is partial disability for years (like diabetes, Lupus, Epstein-Barr) progressively growing worse until it becomes a total disability. More frequent occurrences of disabilities like these are the most difficult to diagnose in the beginning.
I didn't know anyone with MS until I was calling on a list of recently graduated veterinarians. I came across one very angry veterinarian and listened to his story. He had MS. He described his sporadic symptoms and how they affected his work. He had just bought a practice six months before. He filed his claim for partial disability and could not believe he was denied benefits. All the sales material for his association described partial disability. He filed claims again and again, and was denied each time.
He was angry with all insurance people and I happened to be the only one listening. I apologized for all of us. I told him how sorry I was that it had happened to him at age 33.
I said, "Allow me to tell your story. I have an individual disability income insurance policy that does not require total, compensatory disability like yours before it will recognize your partial disability. I can prevent this from happening to everyone I meet, if I can tell them your story."
He agreed and I have done my best these past 29 years because the problem with association disability insurance plans is still the same today as it was back then. It is not about premium. If it were, then the most expensive disability insurance would be the one that does not pay for your disability. You can choose your disability insurance. You cannot choose your disability.
I have hundreds of stories. I started in this business as a college agent for Northwestern Mutual and the first application I wrote was disability insurance for a dentist. It is still in force today. I sold disability insurance as an agent and helped others as a broker representative and general manager at Paul Revere. With The Standard, I oversee sales of IDI in the company's home office. I have remained with this business of selling IDI from my first application.
Truths remain to be discovered by your customers. Galileo said, "People don't care how much you know until they know how much you care."
Please care enough about yourself and your friends and customers to believe in IDI as much as I do. You will find creative ways to sell, just as I did. You will discover truths from the facts just as I did with my veterinarian friend.
During those same years, I was calling contacts on a dentist list of recent graduates. I remember one in particular. He told me, "You are the 21st agent that has called me today, but the first to talk to me about disability insurance." He also bought life insurance from me.
1 Americans with disabilities: 2002 U.S. Bureau of Census, May 2006.
2 Commissioners Disability Table A. 1985.
3 Individual Disability Experience Committee, Society of Actuaries, 2005.
4 The National Underwriter, May 2002, as referenced in the JHA Disability Book of Facts, 2003/2004 edition, p. 13. JHA, Inc.
5 Sick and Broke, Dr. Elizabeth Warren. The Washington Post, February 9, 2006.