An Advisors' Guide to Excess & Surplus Disability Insurance

4 Tips on Positioning Disability Insurance for Ultra-High Income Clients

Posted Wed, May, 11th, 2022
By Exceptional Risk Advisors

Many of our conversations with new advisors center around sharing insights on ways to break into and thrive in the Lloyd's Disability Insurance Market.   Since May is Disability Insurance Awareness Month, we thought it fitting to share four tips for advisors on how to position disability income for highly compensated clients.

Tip #1:  Shift your approach from covering a client's expenses to protecting projected future income figures.  Rebranding disability insurance to mean income protection will help keep the conversation moving forward.  Income protection implies that your clients are in control of their future and have laid out a plan to protect their estate and family.

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Tip #2:  High income clients often have a large enough net worth where they would be “ok” in the event of a disability.  You see this exemplified by traditional disability carriers that carry restriction to limit an individual’s ability to purchase disability insurance to a maximum net worth between $6-$15M depending on the carrier. 

Advisors need to change their mindsets when working with high-income-soon-to-be-high-net-worth-clients and shift their attention to their goals.  Here are some questions to ask these clients: How big do you want to build your estate?  How much generational wealth would you like to create?  How much do you want in the bank following the sale of your business – let’s be sure to insure that value god forbid you get hit with an unforeseen disability!

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Tip #3:  Have the conversation about what each client’s future income projections are valued. Consider a 45-year-old business owner that earns $1M annually.  If that individual wants to work to age 65, they have a future projected income of $20,000,000.  Next ask your client, do you have anything in your life worth $20,000,000 that you haven’t fully insured?  It’s irresponsible not to consider, and even if the client isn’t interested in fully insuring their income, protecting an extra $5M for a lower cost may still be very attractive.

Tip #4:  Now take a moment and consider your highest earning clients.  Start at the top with your highest earner, and write down the next 10 that come to mind.  These folks need your attention, and we would love to help prepare you for discussion if you’re open it!

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