Selling Critical Illness Insurance
August 19, 2013| Von Steve Rowley
Region: North America
The Critical Illness sales process differs from that of many other personal insurance lines. Producers that market Critical Illness insurance see that it affords them an opportunity to provide true value to the consumer. Insurers and advisors realize that the unique aspects and history of this product make it both simple and complex to market.
- Simple: Perhaps the most obvious aspect of this product is that it is relatively new in the United States and as such remains extremely underpenetrated. Most estimates indicate that the market is 3% - 5% penetrated at best. Seldom will a producer, in either the worksite or individual “kitchen table” sale, face competition from another product or agent.
Given this situation, the conversation with the consumer is most successful when focused on building awareness of the need, rather than selling the price, “bells and whistles,” or dealing with the complexities of replacement. For the most part, consumers are a blank slate when it comes to their knowledge of Critical Illness insurance and the risk associated with not being insured. This affords the insurance salesperson an opportunity to provide real value to the customer.
- Complex: Now the conundrum - the salesperson can focus on selling the need, but doing so can be complex. Demonstrating the value of Critical Illness insurance requires an educational process that is very different from other forms of insurance. It is so “new” that few consumers will understand the need for, or value of, the product on their own. Nor are they likely to know anyone who has purchased the product, much less someone who has benefited from the financial relief provided when experiencing a catastrophic medical situation. As such, this requires the insurance producer to assume the role of educator in addition to that of advisor.
The educational process of helping the consumer understand the need for this form of protection and the potential consequences of not safeguarding against the high out-of-pocket cost so often associated with surviving cancer, heart attack, stroke, kidney failure or major organ transplant, can be viewed as a series of logical steps.
1. Utilize the power of story: Like most insurance products, Critical Illness insurance is best sold through stories. Sharing stories about people who have suffered a critical illness and not had the resources available to ensure the best treatment options. A regular review of newspapers, magazines, and news media outlets will provide a plethora of stories over the course of a year. When possible, contrast this with a story or two about an insured whose Critical Illness policy made a difference in their treatment choices.
Supplementing this with the rather unique story behind the development of the first Critical Illness insurance product by Dr. Marius Barnard further helps consumers understand the critical importance of this product.
- 2. Share Statistics: Exercise caution when utilizing statistics throughout the sales process. Statistics rarely sell insurance, but may be used to emphasize the importance and provide scope in terms of the risk. Understanding that half of all males (a third of all females) will develop cancer but that most will survive, is an important statistic. Even with medical insurance, the out-of-pocket cost for cancer treatments averages around $1,200 per month. Statistics on medical bankruptcy may also be valuable to help frame the discussion, but should never be the focus of the sale.
- 3. Identify Gaps: Few customers fully understand the gaps and limitations inherent in their various other forms of coverage. Nor have they considered the huge financial strain that can arise from a critical illness, or the regret that may be experienced if they find their care options limited as a result of financial issues.
- 4. Personalize the Issue: Few successful sales, however, are based upon the abstract implications for the population as a whole. Instead, they are driven by personalization. Help the prospect understand that cancer survival rates at his or her regional hospital may be but a fraction of those at specialty treatment facilities a hundred or a thousand miles away. Ask them what they would do if their spouse needed expensive out of network care and they couldn’t afford it. Lastly, stress that expending cash equals choice…All consumers want choice when it comes to making important life and death decisions.
Treating a critical illness can be expensive. It is often emotionally and physically draining but it doesn’t need to be financially exhausting as well. For most Americans, even a small Critical Illness benefit of $10,000 - $20,000 can make all the difference in the world. The job of our industry is to help consumers understand that there is a tremendous cost associated with surviving a critical illness and that our products offer strong value and peace of mind.