The Good, The Bad, and The Ugly

So much has happened in the last few weeks, it’s hard to keep up. In order to help you filter out the noise, we’ve compiled a roundup of the most important good, bad, and ugly industry news and anecdotes.

The Good

While the cause is not good, this crisis has created an undeniable opportunity to talk about income protection. People are one paycheck away from bankruptcy. The need for paycheck stability is becoming crystal clear.

Now is also a good chance to double down on retaining clients. People are at home thinking about their futures—an email, phone call, or video chat to check in and have quality engagement with clients can go a long way. Some folks may even be more receptive to one-on-one meetings now that there’s no pressure to meet in person.

On the product side, some carriers have extended their premium payment grace periods to as long as three months (from the original thirty days) so clients can keep their policies. It may be helpful to switch premium payment mode to quarterly or semi-annually, too, so that clients do not continue to receive premium due notices each month.

Some carriers have waived medical underwriting requirements for disability insurance products up to higher benefit amounts than normal so people can still apply for and get coverage. These particular non-med underwriting benefits have increased to:

· $10,000/month for individual disability insurance

· $25,000 for business overhead expense

· $1,000,000 for disability buy-out and key person

We applaud these carriers for pivoting strategies during unprecedented times. Remember: these temporary underwriting guidelines expire 5/31/20 (as of now).

The Bad

Face-to-face exams are being postponed or cancelled entirely, which causes issues with the underwriting process. Additionally, Mutual of Omaha is temporarily no longer accepting applicants age 65 and older in order to avoid face-to-face interviewing.

There is no doubt that coronavirus is putting stress on the long-term care industry and those with elderly loved ones. Deaths in nursing facilities have increased and seniors are feeling even more isolated than normal. Could this be a case for having a long-term care insurance policy that can help pay for LTC services and support in your home instead of a facility?

If you do have applicants age 65 or older, we still do have opportunities for coverage through TransAmerica, NGL, and Life plus LTC hybrid products.

The Ugly

Time for the anecdote. One of our agents recently had a client turn down an offer for coverage because his “financial advisor” told him he should instead apply for a policy that has a shorter benefit period of two years. Why? Because two years is the average length of a disability. 🤷

With that logic, most of the insurance policies we pay for are a waste of money. If the average house burns only halfway down, would one buy half of a homeowner’s policy? Disability happens at a far greater rate than major house fires, but like a home burning down, a disability is a low frequency, high impact event. These types of events are why insurance was invented: to transfer the risk.

Hopefully next week brings us more good than bad or ugly. Remember, we have systems in place to continue getting people covered despite physical distancing orders. Applications can be submitted electronically through our Dingo App and policies can be delivered electronically, too. Stay safe and let us know if you have any questions on these updates.

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