As we approach the new year, it’s the perfect time to explore strategies for growing your practice while delivering exceptional value to your clients. One such strategy is leveraging high-limit Key Person Disability Insurance - a powerful tool that not only protects businesses but also establishes a dependable recurring revenue stream for advisors.
The Opportunity in Key Person Disability Insurance
A company’s most valuable asset isn’t its products or its profits - it’s the people driving the business forward. A disability to a key executive can derail operations, disrupt finances, and jeopardize the company’s future. For businesses, especially those in competitive industries, protecting these critical team members is no longer optional - it’s essential.
While traditional Key Person Disability Insurance is available domestically, its benefits often cap out at $750,000 and are restricted to a few states. However, for clients seeking higher limits, solutions from the Excess Lines Market, such as those available through Lloyd’s of London, can fill the gap.
As a Lloyd’s of London Coverholder, we have the authority to issue Key Person Disability policies with limits of up to $50 million - far exceeding domestic options. Typical policies fall in the $3 to $10 million range, making them an attractive option for business owners, investors, and executives.
Why Advisors Are Embracing This Strategy
Many advisors have discovered that high-limit Key Person Disability Insurance doesn’t just solve a critical client need - it also generates consistent, lucrative revenue. In fact, some advisors earn more from disability insurance policies than from term life insurance contracts. Writing just 2 to 3 policies annually can add significant recurring income to your practice.
Consider this real-world example:
The advisor on the case was working with a private equity firm accustomed to purchasing key person life insurance when acquiring new companies for their portfolio. When the firm lost one of their CEOs to a disabling stroke, their perspective on key person disability coverage took a dramatic turn. With the financial impact of losing a portfolio company CEO fresh in their mind, the private equity firm decided to expand their key person requirements to include key person disability.
Why Now is the Time to Act
As you prepare for the new year, take the opportunity to revisit your book of business. Identify clients who may benefit from high-limit Key Person Disability coverage, such as:
- Business owners
- C-suite executives
- Hedge fund managers
- Chief technology officers
Focus on those with existing key person life policies - they're often ideal candidates for disability solutions.
By offering these policies, you not only deepen client relationships but also create a steady revenue stream for your practice. It’s a win-win that positions you as an invaluable resource for protecting what matters most to your clients.
Ready to start 2025 strong? Reach out to us today to explore how high-limit Key Person Disability Insurance can elevate your practice and safeguard your clients’ futures.
