Don’t let your clients be too late for coverage

Written by four-year MDRT member Victoria Joy Avedesian, CLTC, managing director at Capstone Partners, in Newport Beach, California.

The benefit of disability insurance was something I experienced firsthand a few years ago after I was in a car accident.

Victoria Joy Avedesian, CLTC

I had disability insurance but didn’t think to file a claim. After a few months of adjustments, X-rays and exams, doctors uncovered a much more serious problem — and now I needed surgery. On a whim, I called my disability income insurance company to see if this would be considered a claim, even through my recovery time would be brief. The company not only honored my claim but went all the way back to the original date of the car accident to begin the elimination period. I was refunded premiums and received a benefit. I became my own first disability claim, on accident — literally.

There are those who aren’t as fortunate as I have been. They are diagnosed with diseases or debilitating injuries requiring time and treatment. I find that often those who call to inquire about disability coverage are already uninsurable and are looking for some type of coverage before things get worse. It’s often too late, however.

“Don’t I already have coverage?”

Unfortunately, disability is not purchased by enough professionals. Often, the group coverage they have is viewed as “already having coverage,” which is to say they do not realize they can get additional coverage outside of their work benefits. Furthermore, they don’t understand the taxable nature of their group coverage.

We have a great opportunity to work them through the reality of the income loss by doing the calculations with them. By reminding them that they are much more likely to become disabled than to die prematurely, we can serve our clients even better. While it’s not the most comfortable conversation, it’s one the responsible agent should have.

“I don’t want to think about becoming disabled”

Sometimes a client simply doesn’t want to discuss the possibility of a disability. In those instances, I would recommend this response: “I respect that this is a topic that you are unwilling to address further at this time. I will include this fact in my detailed notes so that in the unlikely event you become disabled, it’s clear that you were unwilling to mitigate this risk and you did not want to address it further. This is to protect both of us. Professionally, I have a duty to address important issues and gaps in your plan, which I have tried to do. Personally, it will remind me in our annual reviews that you still don’t have coverage and to remind you of the risk you are facing without proper coverage. Perhaps in the future you will address this gap with me, if you are still insurable.” Often, this will give your client pause, and they will see the urgency of the coverage and choose to address it right away after all.

While not the most exciting topic to discuss in a financial plan, it’s a necessary one. And it’s one that will help you rise above the crowd and become a trusted advisor to your clients.

For more about disability insurance

• Disability Insurance in Action (pdf)
• The Ability of Disability Insurance: Have the Conversation (audio)