Why Don't More People Sell Disability Insurance?

Bod

Expert
39
The FYC/renewals are high. Persistency is allegedly high. There is a need. The need doesn't exactly seem all that complicated to figure out. There isn't so much competition (though there's probably a reason for that). There are obvious prospects to target.

Four questions:

1. I read that the underwriting is a pain in the ass, but exactly how hard could that be if you do everything right and know the application/insurer/their requirements?
2. How do successful disability insurance salespeople prospect for disability? Home phone? B2B phone? DM? Door knocking? (Networking with a small group doesn't exactly seem sustainable or scalable.)
3. What do the top DI brokers make? How many apps do they write a year?
4. How many people specialize in DI and why aren't there more?
 
1. Because one, people generally are never completely honest about their health. Also, some doctors like to leave little notes in the file for CYA which they did not tell or clearly tell their patient which affects their insurability for DI.

2. Those that I personally know that were successful did it by networking. They built contacts and spoke to medical students and young interns. Some go after young lawyers, accountants and other young professionals. The younger the better, it makes underwriting easier and less likely to already have it. Otherwise, you will tend to find those that want DI are those that can't get DI. Medical students have had it drilled into their heads from day one for the need for DI.

3. No idea. Probably low to mid six figures depending on how active they were, what network they had built and what cross selling they did.

4. No idea, but not many. The reason most don't is related to 1 and 2. Underwriting can be very difficult, and most people don't appreciate the need for DI until they can no longer get it.

I am guessing you are fairly young? Go talk to your peers about disability and see how many view it as a concern. Then ask them how much money they would part with to solve it. I suspect you will find many don't think anything can happen to them and those that do aren't willing to part with enough to solve the problem. I admit I sell almost no DI, but I have never seen a quote for less than $100/mo that was worth doing. Most can be several hundred a month depending upon amount of coverage, occupation class, age and gender.
 
I sell DI only to Dentists. I like to find interns after they graduate from Dental school, work couple years and go back for their specialty. They are hard to break into, but once you do, become friends with them on facebook and introductions will come. It takes time to build these networks. Periodontist makes 400k and upwards in private practice so it is a good pay day when you close. They also like to marry each other so you can do well. Roth IRA conversions, tax issues, whether to borrow more from student loans to pay off credit cards, finding a co-signor for student loans when their co-signors have credit issues. You cant just go in with disability insurance in my opinion.

If there are co-signors on their student loans, that means 2 things. They need term life insurance now to cover the debt ( pay day quickly) and the co-signor has income and money and if you get good at referring yourself up, you will do fine. Go make the parents clients and wait for their child to make money in couple years. Once you sell DI, you are always selling more DI every 2 to 3 years.
 
Thanks all.

2. Those that I personally know that were successful did it by networking. They built contacts and spoke to medical students and young interns. Some go after young lawyers, accountants and other young professionals. The younger the better, it makes underwriting easier and less likely to already have it. Otherwise, you will tend to find those that want DI are those that can't get DI. Medical students have had it drilled into their heads from day one for the need for DI.

That's interesting that med students have it drilled into their heads on the need for DI. I searched "disability insurance med school" and all the med school sites seem to have pages on their sites dedicated to DI. I wonder if it would be possible to build up a list of future customers by giving seminars at med schools about DI and following up with names collected?

Is there any reason why it would be hard to insure a thirty-year-old doctor or lawyer for DI? Surely they don't all buy DI right out of the gates when they're at peak indebtedness? (I could be wrong.) I saw a chart from Guardian about who buys DI, and most policyowners bought in their thirties when, as you say, they realize on a deeper level that they're not infallible.
 
Thanks all.



That's interesting that med students have it drilled into their heads on the need for DI. I searched "disability insurance med school" and all the med school sites seem to have pages on their sites dedicated to DI. I wonder if it would be possible to build up a list of future customers by giving seminars at med schools about DI and following up with names collected?

Do you think you are the first to have this thought? It is a great idea, but you'll need to kick out the current guy first.

Is there any reason why it would be hard to insure a thirty-year-old doctor or lawyer for DI? Surely they don't all buy DI right out of the gates when they're at peak indebtedness? (I could be wrong.) I saw a chart from Guardian about who buys DI, and most policyowners bought in their thirties when, as you say, they realize on a deeper level that they're not infallible.

Not really. A 30 year old should still be quite insurable in most cases. However, they may already have an agent they feel loyal to. So again you'd need to pierce that relationship. Also, why wouldn't they buy it when they are graduating? If you were told you had to have malpractice and DI, why would you skip half the requirements?

I'm not saying this to say it can't be done, just so you realize what you will be up against.
 
Most of us who sell DI also sell life. And when you compare underwriting, DI is much harder. Any traffic accident in the past and physical therapy treatment you will be declined for DI or get rated. You break your arm, you can get life insurance with preferred rating. A dental student breaks their arm, you won't have any carrier touch them for years. My worse case is that this young female student had a break in and she fought off the armed intruder and now she is seeking counseling. Only small explanation to get LI, DI declined by everyone.

You also have to look at the exposure to the insurance company. If something like Sept 11 happens, you get stressed and can't work again, at 400k a year salary over 30 years, the exposure to the insurance company is 12 million. My experience, most of these folks won't buy over 2 million in term unless they have assets and income from the family. So for the worse case scenario, the DI policy would provide the biggest safety net to them.
 
Do you think you are the first to have this thought? It is a great idea, but you'll need to kick out the current guy first.
.

I definitely won't be the first one to do anything in insurance. I'm glad to hear people do it. I was thinking that most med schools might look down upon self-promoters giving a speech on DI, even if the speech is 100% educational. I wonder how many schools have these DI seminars? I imagine targeting a school that doesn't have anybody speaking on this issue would certainly be easier than replacing a longtime speaker.


Also, why wouldn't they buy it when they are graduating? If you were told you had to have malpractice and DI, why would you skip half the requirements?

Graduation would probably be the ideal time to do it. I'm unfamiliar to the extent the med students have this need drilled into their heads. My med school ex-girlfirend broke up with me before she got to the graduation stage. Heh. Is there a reason that med schools promote disability insurance so much in general (other than the fact that doctors deal with disability/illness day in an day out)?

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Most of us who sell DI also sell life. And when you compare underwriting, DI is much harder. Any traffic accident in the past and physical therapy treatment you will be declined for DI or get rated. You break your arm, you can get life insurance with preferred rating. A dental student breaks their arm, you won't have any carrier touch them for years. My worse case is that this young female student had a break in and she fought off the armed intruder and now she is seeking counseling. Only small explanation to get LI, DI declined by everyone.

You also have to look at the exposure to the insurance company. If something like Sept 11 happens, you get stressed and can't work again, at 400k a year salary over 30 years, the exposure to the insurance company is 12 million. My experience, most of these folks won't buy over 2 million in term unless they have assets and income from the family. So for the worse case scenario, the DI policy would provide the biggest safety net to them.

Interesting. It really does sound like underwriting is a huge pain in the ass. How many policies of DI do you think someone who concentrates on DI very heavily should expect to sell in a month?

Also, have you ever heard of anybody selling DI through a long-term direct mail campaign? Or is that not really a viable prospecting method? I was thinking you could create a series of letters and direct them to a landing page which then directs them to your calendar to set appointments.
 
There are many agents who do seminars or lunch and learns at dental and medical schools and are very successful doing so. They typically are able to get a special discount set up for students or residents from those schools that make the pricing for their product very competitive. Also, most DI carriers have special limits for medical students and residents where the underwriting requirements are very minimal. They understand the importance of getting the coverage in place NOW while they are still young and healthy.
 
Interesting. It really does sound like underwriting is a huge pain in the ass. How many policies of DI do you think someone who concentrates on DI very heavily should expect to sell in a month?
Our best agents sells around 4-5 DI policies per month (along with other coverages) and depending on the premiums, can earn quite a bit in commissions from selling DI. Also- many carriers have bonuses that are added in as you sell at higher levels.
 
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