Ongoing changes in underwriting are often leading to exclusions and loadings being applied to policy applications, which can cause difficulties for the unprepared adviser and their client.
Advisers, however, have a key role to play in helping clients understanding why an exclusion or loading has been applied and assisting them in securing appropriate levels of cover.
Jim Prigg from KnowledgeMaster calls on advisers to be prepared and ready to tackle the issue when it arises by focusing on the cover they can get.
Jim also outlines some tactics advisers can use to offset the possible impact of a loading or exclusion.
With underwriting definitions playing a bigger role in the placing of risk there are lot more instances of loaded and exclusion cases being offered to the public. This means as an adviser you will need to be very aware of the sensibilities of the issue for the insured and tactics required to ensure the business is completed for the customer.
People can take the placing of a loading or exclusion very personally. This can cloud their judgment and make them defensive, angry and dismissive to accept advice on the product types or the sums insured.
So, what can you do for the client when a case is accepted with a loading or exclusion? Here are some tried and true tactics and techniques that have stood the test of time.
Pre-position yourself
If you think there is an inkling that there may be a situation that will arise because of a loading or exclusion, pre-position yourself before the event to lowering expectations.
Simply explain that your job is to see if they can get the cover. That is the reason why you operate for your clients. Not everyone is a standard risk so you must preposition yourself to pre-empt the objection or concern people may have.
Congratulations! You can still get cover
When the news comes through your client has been accepted, phone and congratulate them. Share your enthusiasm and excitement. Make your feelings known so that when the issue of the loading or exclusion is brought up it is a positive not a negative.
In the case of Income Protection can we extend the waiting period?
A fallback position can be to lengthen the waiting period for income protection so that some of the extra premium released can be soaked up in insurable benefits.
Keep the same premium or keep the same cover?
Offer the choice to people. Do you still need to have the same cover even more than ever because of the loading?
“This is the standard rate for people with your conditions.”
Ben Feldman, the legendary American life insurance salesman, used this way of explaining to people this was their standard rate for cover for people with these conditions.
What do you want me to take out?
Often you will have delivered a package of covers that will include life insurance, trauma cover and income protection. Ask the client what they want to miss out on, what they want to take out or what they believe is most important to them.
The decision is theirs. It is interesting when this questioning style is used just how people respond to diminishing the value.
Tactics for selling the loaded or exclusion case
Take it to the max. Get as much as you can while you still can.
Ask the question of the client how much they and their family need the cover. Explain that they may not have the opportunity to buy the cover at this price or rate ever again. Invite them to apply for more, not less.
“If the cover cost you nothing, how much would you like to secure?”
This question puts the purchase in a different light for the client. You will be surprised at some of the answers you will receive. The main issue here is to ascertain the priority of the intended purchaser to actually go ahead with the proposal.
Case manage
You can offer to case manage the risk over a 12 months period for the person by offering and suggesting things like:
- Extending waiting periods
- Submitting the case to another underwriter
- Suggest the prospect give up smoking
- Ask them to explore any preventative or supportive medication
- Developing an exercise regime
- Accept the loading now, but recheck in 12 months time for a reappraisal
Where can we find extra dollars in your budget?
When you did your original fact find you may have done a weekly budget for the client. If the premium required is substantial it is wise to return to the budget sheet to see if there is any fat. Can you rearrange other payments and priorities for expenses in a different way?
Outside help
Is there someone else who can help with premium payments such as parents or grandparents? This is an often an untapped source of support for the newly married or those with young children and big overheads
This article is reprinted with permission from Jim Prigg CEO and founder of Knowledgemaster Pty Ltd. Knowledgemaster is an online resources company that delivers practical communications, interaction, sales and soft skills tips, tactics, techniques. Learn more about winning business programs and courses by contacting Jim.
Contact Jim Prigg to learn more about winning business programs and courses.
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