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Summary of LIMRA Study, “Disability Insurance: Why Not? – Why People Shop for and Buy Individual Disability Insurance”
 
 
Reasons why people do not purchase:
·         Non-buyers usually see the need for DI!—but it’s just a vague perception. It’s our job to reinforce that idea and emphasize the benefits before we talk about price.
·         Too expensive—the broker needs to be able to adapt to the client’s budget, and it cannot be emphasized enough that we need to do a better job of discussing the value before we provide the quotes.
·         Could not qualify medically—this means we need to initiate this process sooner.
·         Lack of follow-up—you are not bothering them if you are guiding them through their indecisiveness. Don’t stop until they say, “No.”
·         Confusion—disability insurance is a less-understood product that sometimes needs a simple explanation, not a daunting string of insurance-speak. Know your audience and try not to over-complicate it.
·         Price-consciousness—agent is illustrating with price before they sell the value of the product.
 
 
Recommendations
·         Initiate—half of those approached will buy, but only one-third of self-initiated shoppers will purchase. Two-thirds of non-buyers begin their search due to a health event. As we all know, this is not the proper time to shop. We need to reach out to them before it’s too late.
·         Don’t give up on your clients/friends/acquaintances! Most purchases are made through an agent that already has a relationship with the prospect.
·         Cross-sell!—since health concerns are the main trigger for the shopping of DI, get in there and start offering it to your life, health, and/or investment clients. People do understand the need for DI; it’s just a matter of reaching out.
·         Talk to women—men are more likely to be approached than women, even though they are less likely to become disabled than their female counterparts.
·         Talk to younger people—a disproportionate amount of older prospects are approached. Young people have more income to protect.
·         Continue to expand your audience. Sorry, but people don’t respond to mail. This might be good for name-recognition, but it really takes another form of communication to follow-up.
o   Most effective (in order): Seminars, internet presence, face-to-face meeting, workplace meetings, phone call, information at work, email, advertisements, direct mail.
·         Guide your prospects. Internet shoppers are almost always in the information gathering stage, so it takes longer to follow through. They need guidance.
·         Offer a Needs Analysis—buyers are much more likely to have undergone a “needs analysis” (61%) versus Non-buyers (32%).
·         Meet face-to-face—half of sales are made in person.
·         Do not rush your prospects—it’s usually an unfamiliar form of protection and that can contribute to sense of confusion or complexity. Rushing them will only exacerbate this.
·         Don’t give up on your prospects—this process takes time, but not necessarily that much more work. “The chief complaint by non-buyers is that their advisors did not follow up with them while they were deciding.” Just drop in every once in a while.
·         Talk about the VALUE
·         Talk about the VALUE
·         Talk about the VALUE—most people already know that this product can help them; they are simply looking for reinforcement from their insurance advisor.
DI & LTC - 01/2012