Advisers can overcome a range of barriers to put in place more critical illness insurance for their clients, according to specialist Canadian adviser, David Brown.
Speaking at this year’s MDRT 2010 Annual Meetingin Vancouver, Mr Brown shared with his audience how his practice approaches every critical illness insurance sale/solution in order to achieve the desired outcome for their clients.
One of the key messages to advisers from Mr Brown is the importance of how the client’s proposal is presented and communicated to the underwriter. He said that fear of unfavorable underwriting decisions contributes to less trauma insurance being written:
… just as you have to spend time “selling the product” to the client, you have to spend equal time “selling the client” to the underwriter
“In our office, we think that just as you have to spend time “selling the product” to the client, you have to spend equal time “selling the client” to the underwriter.”
Mr Brown highlighted the importance for advisers to properly read :
- The insurer’s underwriting guide
- The application
- The specimen policy document
A show of hands at Mr Brown’s presentation indicated that not many advisers do, in fact, properly read these documents as part of the process of placing trauma insurance business.
Mr Brown likened the adviser knowledge of these insurance documents to that of a surgeon being expected to understand in detail the manual on the medical procedures they perform.
Mr Brown advocated that advisers should spend a significant amount of time with their clients , discussing the difference in risk between life and trauma insurance and the nature of the underwriting process. He pointed out that in life insurance underwriting, the fundamental risk is that clients will die before their life expectancy, but that the primary underwriting risk in critical illness insurance is the likelihood that the applicant will survive.
Diligence in pre-underwriting the client also pays dividends, according to Mr Brown, who says this should be the first step in the process of placing a critical illness policy. Mr Brown explains to his clients he does not want to put them through the complete underwriting process until he gains some assurance that the underwriting company will at least consider the application. He tells his clients there are medical issues that will automatically disqualify them from this type of coverage, and it is better to know this up front.
Mr Brown … achieves a 90% to 95% approval rate on critical illness policy submissions
In following these processes, and observing complete disclosure of all possible health and medical issues, Mr Brown told advisers his practice achieves a 90% to 95% approval rate on critical illness policy submissions.
Another processes Mr Brown includes to achieve this high success rate is fully preparing his clients in circumstances which require them to undertake a medical examination. Clients of Mr Brown are provided with a checklist that they can follow in order to present as best as they can at the medical exam. He calls his checklist “Tips for Looking Your Best in That Medical Snapshot.”
In presenting to his prospective clients, Mr Brown says his practice does not use ‘scare tactics’. Instead, he positions the proposition in terms of the client purchasing trauma cover because they will want to have a choice as to how they will live during their recovery from a critical illness.
… critical illness is an asset protection strategy for the client
According to Mr Brown, critical illness is an asset protection strategy for the client, and he assists his clients to understand and recognise the areas where their financial, estate, or retirement plans might be weak or lacking. Mr Brown’s practice helps clients through the following steps:
- Defining their visions and goals
- Identifying their dangers, opportunities, and strengths
- Accumulating their data and information
- Analyzing their current situation
- Integrating their visions and goals with their current situation, opportunities, and strengths
- Presenting options and recommendations
- Implementing the recommendations
- Reviewing the implementing solutions
- Conducting periodic reviews and updates
Having articulated the process, Mr Brown then demonstrates to clients that from a financial point of view, it is far more efficient and cost effective to transfer the risk of funding for a disability or critical illness costs from themselves to the insurer.
