Replacement Opportunities - DI
- Thread starter redsquash
- Start date
- 15,041
Tread carefully when it comes to DI replacement. Unlike life, DI pricing generally doesn't get better over the years, so with the person being older, hard to beat on price. Also, many of the other contracts have much more favorable language for the insured. Finally, when you consider how difficult DI underwriting is, and the odds that some one's health has declined, a replacement is rarely a good idea.
Instead of looking to replace, look to supplement. Do a DI review to ensure they have the coverage needed to protect their current income. If there is a FIO on the old contract, do an AOR and get paid on the new issue. If there isn't, look to do a new policy to add to the existing coverage.
Instead of looking to replace, look to supplement. Do a DI review to ensure they have the coverage needed to protect their current income. If there is a FIO on the old contract, do an AOR and get paid on the new issue. If there isn't, look to do a new policy to add to the existing coverage.
- 1,908
It all depends on how you approach it.
Several factors are involved: how long policy has been in force, the amount of coverage (and whether it still satisfies the insured), the type of policy, the profession of the insured (and what they perceive their future income/needs to be).
Use a questionnaire and run several quotes, then analyze the results and what financial impact it will have on the insured.
That being said, every 5 years or so is a good time to "update" and "review" their DI needs.
Several factors are involved: how long policy has been in force, the amount of coverage (and whether it still satisfies the insured), the type of policy, the profession of the insured (and what they perceive their future income/needs to be).
Use a questionnaire and run several quotes, then analyze the results and what financial impact it will have on the insured.
That being said, every 5 years or so is a good time to "update" and "review" their DI needs.
- Thread starter
- #4
- 1,459
I'll echo the previous comments, but every once in a while I've found it in the best interest to replace a policy. I remember one a few months back where we doubled the coverage (about 10 years after the previous one was issued) for a very similiar disability definetion (the new contract was slightly better) for about the same out of pocket premium. However, I have found that to be very rare.
- 15,041
Oh, I'm not saying that opportunities for replacement don't exist. Just that they are rarely found when it benefits the insured.
Always take a good hard look at the old policy and ask yourself, "If someone was advising this replacement to me, would I do it, and why?"
The DI Doctor
Expert
- 32
I am with those fellows who say be CAREFUL!
I run into some guys who find a client with Pan Am's old return of premium and try to replace that. You CANT buy anything like that anymore so I start my conversation very
subtlety like, " NO, NO, NO... WAIT, WAIT, WAIT!!!"
Here is the EXCEPTION. People's needs change with age. Some guy may have bought true own occ a few years ago, and now he is a 57 year old exec. If he is disabled, what else could he do?
Then I might suggest the option of modified own occupation which would never force a client back to work. I might also suggest using a guarunteed renewable contract and be sure the agent understands that even though the carrier has typically not increased existing clients in their entire history, it does not mean that it could never happen.
Knowledge is power if I can convey a clear understanding of options and let them have the power of choice.
I run into some guys who find a client with Pan Am's old return of premium and try to replace that. You CANT buy anything like that anymore so I start my conversation very
subtlety like, " NO, NO, NO... WAIT, WAIT, WAIT!!!"
Here is the EXCEPTION. People's needs change with age. Some guy may have bought true own occ a few years ago, and now he is a 57 year old exec. If he is disabled, what else could he do?
Then I might suggest the option of modified own occupation which would never force a client back to work. I might also suggest using a guarunteed renewable contract and be sure the agent understands that even though the carrier has typically not increased existing clients in their entire history, it does not mean that it could never happen.
Knowledge is power if I can convey a clear understanding of options and let them have the power of choice.
- 3,352
Are you freakin' kidding me, who makes even a fraction of a living replacing or even writing a lot of DI? Who in the hell makes a living specializing in writing DI?
- 14,808
The same 4 agents who making a living selling LTC.
- 3,352
John: Freakin' hilarious...I get your point ! NOBODY supplements a large portion of their income specializing in this DI and LTC....Show me the person that does and I will show you a freak of nature. So keep crossselling for a living like the health carriers want you to. Maybe the DI DR. is one of those four?
I think I would rather play in a freeway with razorblades than going out seeking to replace DI policies, or replace LTC for that matter. What a nightmare career even doing any volume of it.
I think I would rather play in a freeway with razorblades than going out seeking to replace DI policies, or replace LTC for that matter. What a nightmare career even doing any volume of it.
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