Many insurance advisors have not actively discussed disability insurance with their clients. While most brokers have the ability to sell, most do not due to the complex nature of the product. What this means is that many insurance advisors typically focus on the life insurance – and sometimes, try to encourage their clients to purchase the best life insurance plans in the market, rather than helping the client spread their risk over different products. It’s like a car salesmen trying to sell a 2-seater sports car to a family of 5 who needs a family sedan or SUV instead. If all the costs are allocated to a high-end life insurance product, there is often no budget left over for additional coverage that the client may have felt is equally important.
How do I know this?
I was a disability wholesaler for nine years, working with many major accounts in the Golden Horseshoe including State Farm, RBC and SunLife (among others). I also worked with hundreds of independent brokers. More often than not, when I first met with a broker, they have not sold any disability insurance in the past year. It was my passion to help them see the importance of at least having the conversation of protecting an income with their clients. I truly believe they owe it to their clients to have that conversation.
Why is this happening?
Unfortunately, there is not a lot of support in the industry when it comes to disability insurance. There are only four carriers that sell high quality disability contracts. These carriers are RBC, Manulife, Great West Life and Canada Life. In fact, Canada Life and Great West Life are one in the same company, just a different distribution models. This means that not many advisors have had the proper training or mentorship on how disability insurance contracts actually works. If the broker isn’t confident in the product, they may shy away from the discussion. I have also seen some captive channels trying to sell other products such as Long Term Care and/or Critical Illness rather than disability, simply because disability insurance was not a part of their companies product portfolio. Lastly, when a client is asking for disability insurance, a broker would be more than happy to help. Unfortunately, when a client is asking, it’s typically too late as they know they need the coverage for a reason. This means that the coverage is going to be substandard (additional costs or exclusions) or worse case, declined. This leaves the broker frustrated as it may jeopardize the relationship since the client isn’t happy with the outcome. This may leave a broker just with the mindset that it’s not worth selling disability insurance.
What can you do?
This is why it’s important to work with a broker who understands disability insurance. They can help you protect your most valuable asset – the ability to earn an income. They can also help set proper expectations if you have past medical concerns and negotiate with the different carriers to find you the best solution.
Life insurance replaces the loss of an income in the event of a premature death. Disability insurance replaces a loss of an income in the event of an injury or illness. Which do you think is more likely to happen? Shouldn’t it be time that you consider protecting your income with disability insurance?
By Jeff Romansky
CHS, CPCA Principal, SecurePlan Insurance Solutions
Jeff started his insurance career in 2006 by helping hundreds of insurance advisors grow their business by providing them with comprehensive advice, consultation and training. After nine successful years, he decided to take his knowledge and start his own practice to ensure his clients are getting the best advice. His office is based in Grimsby, ON and he serves clients throughout Southwestern Ontario and the GTA.