Disability Strategy

[Redpepper]

I am trying to formulate a business plan and strategy. I understand that disability would be difficult to sell on a part time basis, but it's got me thinking.

Is there a product that pairs well with long term disability?

Perhaps I could begin with an entry point product and then follow-up down the road with the disability strategy.

I saw some projections on 1 disability sale per week with the renewals and it got my attention. I have LTC insurance personally and as a married couple with no kids I really see the value, but I think the disability line may be a better niche and more affordable for most people. I personally know 4 of my close relatives who have it, but zero with LTC.

Any thoughts?

 

[scagnt83]

Selling any type of insurance on a "part time basis" really depends on how much you consider "part time". No one line is going to be significantly harder for a "part time basis" vs. others.

There is a lot of need for DI. But its also common to find people with group policies from their employer... usually the policy is absolute crap so those can be easy sales to make if you know what issues to bring to light in that situation.

If you have LTCI, and you know people who dont, why not lead with LTCI with those people?

And why limit yourself to one product line? They are not all that hard to understand, you already have a head start on LTCI since you own a policy. I would suggest offering DI/LTCI/Life. Those three compliment each other very well for cross-selling. And it lets you pivot to the persons need.

But you are correct that LTCI is expensive. The demographics for it have shrunk, and are still shrinking. Hybrid policies are the main go to for most these days.

 

[Tahoe Ray]

I am trying to formulate a business plan and strategy. I understand that disability would be difficult to sell on a part time basis, but it's got me thinking.

Is there a product that pairs well with long term disability?

Perhaps I could begin with an entry point product and then follow-up down the road with the disability strategy.

I saw some projections on 1 disability sale per week with the renewals and it got my attention. I have LTC insurance personally and as a married couple with no kids I really see the value, but I think the disability line may be a better niche and more affordable for most people. I personally know 4 of my close relatives who have it, but zero with LTC.

Any thoughts?

Term life pairs well with DI.

I will say though, next to LTC, DI is probably one of the most "expensive" products that you can sell. 2-4% of gross salary (typical cost for a max DI plan to age 65) is tough for some to swallow.

My average DI premium is north of 3k and it isn't uncommon to see 6-8k premiums. If you're making 300k/year, that can still look like a pretty big number.

But, those that see the value will buy, those that don't, won't.

That's why this business is so hard to do part time. You need a steady stream of prospects. The "selling" is probably the easiest part.

 

[Redpepper]

I have seen a lot of people promoting Final Expense as a doable part time endeavor in some cases. I was just wondering if there is a natural pairing for DI.

I know farmers, plumbers, a/c installers and route salesmen 40+ y.o. in my family who all have policies, but as you pointed out the a/c installer is in a group plan.

 

[Tahoe Ray]

I have seen a lot of people promoting Final Expense as a doable part time endeavor in some cases. I was just wondering if there is a natural pairing for DI.

I know farmers, plumbers, a/c installers and route salesmen 40+ y.o. in my family who all have policies, but as you pointed out the a/c installer is in a group plan.

DI is normally purchased in the age range of 35-55. You could go to the FE forum and ask
what age ranges they normally write but I'll bet they're not normally writing 40-year-olds.

 

[Tahoe Ray]

Thanks. Just to clarify, for the 40 y.o. guys in my family I was referring to DI policies.

Gotcha.

 

[tippingpoint]

That's why this business is so hard to do part time. You need a steady stream of prospects.

Knocking on business doors is how most people sell DI?

 

[rmhaire]

Knocking on business doors is how most people sell DI?

No. Just the opposite.

If you want to door knock for DI then you should concentrate on small businesses (mom & pop) and lead with BOE.

 

[yankee466]

Term life pairs well with DI.

I will say though, next to LTC, DI is probably one of the most "expensive" products that you can sell. 2-4% of gross salary (typical cost for a max DI plan to age 65) is tough for some to swallow.

My average DI premium is north of 3k and it isn't uncommon to see 6-8k premiums. If you're making 300k/year, that can still look like a pretty big number.

But, those that see the value will buy, those that don't, won't.

That's why this business is so hard to do part time. You need a steady stream of prospects. The "selling" is probably the easiest part.

Well...at least LTC premiums are not tied to your income levels. LTD is basically toast at age 65, and percentage wise, every few people ever make a claim. LTC is there till the bitter end, and 70% of us are destined to need some level of extended care before we die. You decide where the money is best spent.

No one asking about FE will ever buy LTD or LTC IMHO.

 

[Tahoe Ray]

percentage wise, every few people ever make a claim. LTC is there till the bitter end, and 70% of us are destined to need some level of extended care before we die. You decide where the money is best spent.

It's 24% on claims so it's not very little.

Best thing is to flip your LTD premiums into LTC in your early 60s/late 50s