There’s simplified issue insurance and then there’s the whole idea of an easier, quicker, non face-to-face, simple process that some say should help financial advisors receive the financial incentives they want to help the underinsured family market in this country.
Statistics from LIMRA indicate that Canadian families are underinsured but feel they have no opportunity to talk to knowledgeable advisors. That’s because many in the industry believe the traditional model is not profitable, especially for clients looking for under $500,000 in insurance, says Chris DiSalle, executive vice president, chief sales officer, with HUB Financial Inc. in Vancouver.
DiSalle says many advisors who want to increase their sales are selling their family market books and getting into new, more financially lucrative markets, leaving a big portion of the Canadian population either uninsured or underinsured.
“The biggest problem we have in the industry is a prospecting issue,” says DiSalle. “People say they want more insurance yet 50% of Canadians say no one is contacting them. So we have a disconnect. There’s a fairly big problem there.”
Many advisors no longer feel it’s worthwhile to put in six to 12 hours of work visiting a 40-year-old couple, talking to them, getting them to give blood and other tests at the doctor and then delivering the policy and providing the receipt – all for what may turn out to be about $670 a year in premiums for both parents. “It’s just not lucrative enough, therefore no one is prospecting there and families are left uninsured.”
But some companies now have on-line apps and tele-underwriting and accept electronic signatures in a process that can basically be done by the advisor over the phone. Advisors who spent hours before getting and sealing a deal, can probably do two of these applications in an hour, says DiSalle.
He says HUB’s percentage of term increasing with the simplified method has grown and the MGA is now notifying advisors who use the traditional model to rethink their process.
“We are obviously thrilled to accept and process all types of applications,” says DiSalle. “However, for those advisors writing smaller term amounts, we want to educate them on the non face-to-face-technology based options so they are aware of more effective ways to write this type of business. It is less intrusive and more convenient for clients and clearly a streamlined and easier process for the advisors.”
Clients need not worry that they will never see an advisor. Many often meet with families ahead of using the more simplified method and can use that face-to-face time to determine whether all their insurance needs are met.