Belief the key to risk advice

My practice is built around medical professionals and, in particular, around the financial needs of physicians.

My market is focused around critical illness (CI) and disability [income protection] insurance.

People ask me why I sell so much disability and CI, and I guess the answer is found in one word — belief.

My father had his first heart attack at the age of 38, and my grandfather died at the age of 41 from a heart attack. I spent four-and-a-half days in a coma, fighting for my life after a virus systematically shut down my kidneys and liver. At the same time I was on life support.

All too often we get caught up in the technical definitions and forget about the basics of beliefs and needs.

Having said that, we can’t forget about what we have here in Canada.

When I sell the product I tell people the product is on sale. In Canada we have guaranteed premiums to age 75 and to 100.

We also have the Return of Premium option, which, with one company, reimburses the life insured with 100 per cent of premiums paid if a claim has not occurred by the 15th anniversary.

With these options, the only true objection is lack of a client’s cash flow. And yet a low cash flow is by itself an indication that the client needs the product. Thus, there are no good objections.

One of the biggest adviser complaints I hear is aimed at ‘harsh’ underwriting.

Many advisers think the underwriting process is rigorous, and eventually ends in many rated or declined cases.

In my experience, I use the application as a tool to ‘sell’ the insurance.

I flag any potential health issues or family history, and ask the client to become the shareholder of the insurance company for a moment and ask them if they would accept the standard application, or with a higher premium.

When the client recognises the risk, then a potential rating becomes easier to place.

In fact, I recently sold a policy to a disabled nurse who was walking with crutches due to ankle surgery, was rated for her large build, and had colitis. When we received the substandard offer, the client was actually happy.

When selling to physicians and their spouses, the key need is generally protection of lifestyle.

Even with spouses who do not work outside of the home, policies are sold as a protection against the breadwinner’s reduction in income when they become caregivers.

With families with significant wealth, CI is sold to preserve the assets if an illness should strike.

CI policies are mostly sold as stand-alone products, and the coverage amount is generally lower than life coverage.

Where a client might have seven to 10 times income for life insurance, CI is one or two times income. This is mostly due to the higher cost of CI.

In Canada, the product is still going through a development stage and the experience does not necessarily mirror the world experience, hence the guarantees and the Return of Premium.

The World CI Conference is calling for standardised definitions for Canada, and I would be in favour of this.

An ongoing need for advisers is education on the product and, if nothing else, standardised definitions would level the playing field, create a baseline understanding and simplify the sales process.

Corry Collins is principal of Living Benefits Atlantic, Canada.