In training this week we had a great guest speaker from Illinois Mutual on hand to discuss how to sell disability income insurance. She focused on how to get started, but more importantly, strategies and concepts to make it easier to explain to clients.
Disability Income insurance has one major purpose: It provides an income stream when you are unable to work. Many times insurance producers ask us about DI and seem to think there is some level of complexity. The hardest part of selling DI is getting clients to believe they have a realistic chance of becoming disabled before retirement. Did you know that one in four of today’s 20 year-olds will experience a disabling event before they retire? So ask yourself this, are you properly communicating the risk of disability to your clients?
68% of the private sector workforce has no long-term disability insurance.
25% of today’s 20 year-olds will experience a disabling event before retirement.
This screams opportunity, especially when you consider that 51% of the population has openly admitted their concern about their ability to support themselves if they were to become disabled. We as insurance producers should be communicating the need and offering realistic options.
We reviewed a sales tactic in our training this week that really makes selling Disability Insurance simple. The M.U.G. plan, which was introduced to us through our good friends at Illinois Mutual, is a great selling tactic to simplify DI for your clients and increase your sales. The M.U.G. plan is designed to cover the essential expenses which include Mortgage (M), Utilities (U) and Groceries (G). When you think of it in this simple way, it makes the discussion with clients much easier. If you traditionally sell life insurance or property and casualty, you can easily start generating Disability sales immediately using MUG.
One of our Regional Managers, Ray Smith, comes from a small town and loves the saying: “Some taters are better than no taters”. This may seem silly, but it’s a great way to think about selling DI to the middle market.
Let’s walk through an example of how you can use the MUG plan at the conclusion of every single sale. You have just delivered a life or P&C proposal or policy and at the conclusion of the appointment you simply ASK.
Agent: “By the way, who takes care of your income protection?
Client: “I don’t know what you mean”
Agent: “If you became totally disabled and couldn’t work, who would pay you?”
Client: “I don’t have anyone that would pay me”
Agent: “I need to show you the M.U.G. plan. The M.U.G. plan is an insurance policy that will provide income to pay your mortgage, utilities, and groceries if you become totally disabled and are unable to work. All I would need to know is how much you spend each month on these three expenses.”
This simple approach starts the discussion about the monthly expenses they worry about most. The concept of “some taters are better than no taters” should be starting to sink in by now. Below is a visual representation about how impactful a disability plan can be for a client.
So, would you be willing to take less than a 2% reduction in your pay to protect your income if you became disabled? I think the answer is wildly obvious. On top of being an easy decision, putting the plan in place is just as easy.
A myth of selling DI is that it requires a medical exam, which is a big speed bump for many clients. The M.U.G. plan covers the essential expenses and in most cases requires no medical testing. That’s right, submit the application directly to the insurance company without a medical exam. The underwriters will review their medical history and issue the policy assuming all underwriting questions were accurate. Here’s one of the most popular no-medical M.U.G. plans:
- $2,000 / Month in Benefits
- Two-Year Coverage Period
- 30-Day elimination period
We are now seeing agents offer a M.U.G. policy with every policy delivery or proposal. If you are new to DI or just haven’t taken the plunge, I challenge you to simply start asking the golden question at the end of every sale: “Who takes care of your income protection?” You will increase your sales by asking this simple question and explaining that an insurance policy exists to cover mortgage, utilities, and groceries.