In previous years, the insurance industry instructed advisors at sales seminars to present their clients with scary illness incidence rates to sell critical illness insurance (CI), recalled Keith Leech speaking to financial advisors at the 4th World Critical Illness Insurance Conference held in Victoria last January. The problem is that this strategy has not worked. “We have absolutely let you down,” Mr. Leech told the advisors.
Although CI sales in Canada have been flat, some advisors’ have thrived selling the product. When asked what these successful advisors were doing to market CI effectively, the industry learned that “it was the exact opposite” of what they were told to do, said Mr. Leech.
These top selling advisors did not focus on listing incidence rates or the numbers of conditions covered by the product. Instead, they told clients a good news story, about survival for example. They told clients that 90% of people survive heart attacks, that 75% of stroke victims survive the initial attack, etc. Then they told them how a CI benefit could help them survive and recover, Mr. Leech added.
Presently an advisor with Vancouver-based Context Planning Ltd., Mr. Leech used to work for an insurance company and at a major managing general agency. He says in the past he himself has given many seminars based on the old approach of listing scary statistics. Now, he is trying to help reposition the product by sharing the “lessons learned,” the chief of which is that “critical illness is not a scary, bad news story.”
“The challenge of selling CI is attachment or lack of it,” says Mr. Leech. Attachment means making what CI can do for the client personal. This may mean showing them that a CI benefit during a time of health recovery may allow your spouse to take a year off to care for you. Or another potential suggested use for a lower benefit product could be, “how about a year’s mortgage payments paid?” Or perhaps, ask them what it would mean to them if they could choose their own caretaker if they became critically ill and needed assistance?
Not attaching the money, by saying, “If you are diagnosed with cancer, we give you $100,000 and you can do anything you want with it…is a big mistake,” he adds. Clients are not looking to win money by getting ill, he explained.
The goal of attachment scenarios is to give the client a realistic idea of how the money could be useful to them after surviving a critical illness. Mr. Leech warns, however, that the old sales strategy of suggesting that they can use it to pay for health care in the U.S. or elsewhere isn’t a winner.
And what can advisors do about denial? Thinking they are invincible is a major reason why clients reject the product, particularly those with healthful lifestyles. Just show them a picture of Lance Armstrong or Mario Lemieux, he says. In this regard, he suggests asking four questions during the CI meeting:
1. Do you know someone who has had…? List the various illnesses covered.
2. Did they plan it? This brings home that a healthy person can get sick.
3. Did the illness result in emotional or financial strain on the household or business?
4. Would extra cash have helped?
Mr. Leech added that advisors should be sure to tell clients that CI was not originally thought up by the insurance industry. Tell them instead, he says, that it is a solution by doctors (the creator was famed heart surgeon Dr. Marius Barnard) for a problem they created – keeping people alive!