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How to Sell Long- and Short-term Disability Insurance

With the use of predictive analytics and quicker access to data, disability insurance can now be quoted online in minutes and the most qualified applicants can be instantly approved.
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how to sell long- and short-term disability insurance

Despite Centers for Disease Control and Prevention research showing that Americans have a 1 in 4 chance of experiencing a disability that alters their ability to earn an income, only 14% of Americans own disability insurance, according to LIMRA. As a result, “untapped" would be an apt description of this market and its potential for independent agents.

If you're asking why disability insurance is undersold, it's because the process was often a disaster. With so many occupational and financial factors to consider, underwriting could take months. Disability insurance was not worth the time for agents or consumers.

So, why has disability insurance become a great opportunity for agents? Technology has changed the process. With the use of predictive analytics and quicker access to data, disability insurance can now be quoted and applied for in minutes— entirely online—and the most qualified applicants can be instantly approved. 

Now that a cumbersome process is no longer an impediment to protecting clients' personal income in the event of an injury or sickness, independent agents can sell disability insurance with the help of some powerful statistics.

When selling disability insurance to clients, start with the aforementioned statistic: that they have a 25% chance of becoming disabled during their career. Not incredibly likely, but not something your clients want to bet against either. 

Ask what would happen if they are the one in four. Given that only 44% of Americans can afford a $1,000 unexpected expense, according to a survey from in January 2022, how long could your clients keep paying for groceries, car insurance or the mortgage if they're suddenly out of work and without income due to physical injury, medical illness or mental health struggles?

Robust cash savings are one way your clients can protect themselves against disability, but it's a rare failsafe among Americans. There likely won't be much help from the government or their employer either, which is another selling point. In terms of employer assistance, just 19% of U.S. employees get access to paid family leave through their employer, according to the Bureau of Labor Statistics, making disability insurance more valuable. On a state level, just five states require employers to offer short-term disability insurance, while 16 states offer paid sick leave policies. 

Meanwhile, Social Security Disability Insurance is the only federal program offering financial assistance for disabilities—but 67% of claims are denied, according to the Social Security Administration. Also, it is notoriously difficult to qualify for, and a person's disability must be expected to last at least 12 months or result in death. Further, workers comp only covers disabilities that happen on the job. 

Outside of disability insurance or savings, your clients have extremely limited options to protect their finances against injury or illness. But if you are able to successfully sell long-term disability insurance to clients, there's a strong cross-selling opportunity with short-term disability insurance.

Long-term disability insurance often carries a waiting period of 90 days before benefits start to kick in. If your clients find themselves without income due to disability, are they financially secure enough to wait that long? If they also own short-term disability insurance, they could close any coverage gaps because short-term disability insurance usually has a waiting period of seven days or less.

With an improved application process, low ownership rate and a sensible cross-sell pitch, disability insurance is one of the better business opportunities for agents.

Colin Nabity is the CEO and co-founder of Breeze.

Monday, November 14, 2022