Individual disability income (IDI) insurance meets a critical need for clients, especially those with higher incomes. High-income earners — think C-suite executives — are prime targets for IDI sales as they often need more income protection than their long-term disability (LTD) plan provides. This could be because the maximum monthly benefit is too low or the LTD plan doesn’t cover variable earnings such as bonuses or partnership distributions.

If you work with businesses that have several high-income earners, you have an opportunity to sell IDI policies on a guarantee issue (GI) basis, which creates many advantages for the insureds, the employer and you.

The benefits of GI sales

Although GI plans consist of individually issued IDI policies, the GI structure allows employees to pool together and receive valuable perks. There is no detailed medical underwriting, the employer’s census typically suffices for financial underwriting, and these plans come with discounted premiums. For the employer, this means creating value-added benefits on behalf of the firm’s key employees. And for you, the producer, a GI plan allows you to write multiple IDI contracts at a single location, with great efficiency. But that’s not all.

“Aside from simplified underwriting, GI plans carry contractual features that are often stronger than group LTD plans and are fully portable,” says Jeff Peterson, owner and CEO of Pacific Advisors, an independent DI and LTC insurance brokerage firm in Seattle, Wash. “Positioning these benefits to a client demonstrates that you are looking out for their long-term financial health, which can help you for future sales.”

Ready, set, GI

If you are ready to start selling IDI via GI plans or to enhance your GI strategy, consider these tips to help elevate your sales:

  • Target industries with the most GI potential. Legal or accounting practices, engineering firms, technology companies and investment management firms are sectors with good GI sales potential. These industries generate incomes where the additional protection of IDI coverage is needed. However, do not overlook manufacturers or other blue-collar industries, as these companies have a cadre of executives who can be carved out for a GI sale. “The highly compensated are often left with a smaller percentage of their income protected, making GI that much more important,” Peterson notes.
  • Aim for cases of 20 lives or more. Cases of this size get the best monthly benefit offers, thanks to a sufficient spread of risk. “However, cases can be designed for as few as five lives,” Peterson reminds. “As the number of individuals covered under the plan grows, so do the design options.”
  • Look outside the executive suite. For example, consider a law firm with 100 employees but only 10 partners. There most likely are others at the firm — such as senior associates — with high enough incomes who need the additional protection.
  • Promote the portability of GI policies as a recruiting tool. Unlike group LTD, IDI policies written through a GI plan are issued to individual employees so they can keep the coverage if they change jobs — a major perk for today’s workforce.
  • Consult your carrier. Connecting with your carrier can help fast-track the selling cycle. You can leverage the expertise of your carrier regarding which types of businesses to target, how to approach employers, enrollment strategies and other guidance.

If you have not sold a GI case, don’t let that stop you from pursuing this lucrative niche. Ask your carrier or brokerage manager for help choosing the best prospective companies among your client list, strategies for that first sales conversation with an employer and questions during the design and implementation of a case.
Waters is the second vice president of individual disability income (IDI) insurance sales at The Standard. He can be reached at doug.waters@standard.com.

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