Advocis conference update: Expert offers tips to send CI sales through roof

(June 1, 2004) Donna Thorne is a big believer in the difference a solid critical illness insurance (CI) policy can make in a person’s life. “When your clients or your friends or family members become diagnosed with a very serious, life-threatening illness such as a heart attack, stroke or cancer, you’re the only one who is going to arrive on their doorstep with a get-well card and a cheque in your hand,” says Thorne, a specialist on the emerging CI market with Manulife Financial, who was on hand in Calgary to present on how advisors can double their CI sales.

Noting that CI policy sales actually eclipsed disability sales in Canada in 2003, Thorne highlighted the potential for “vertical growth” in the practices of advisors offering CI to their clients.

“For the last two years that I’ve specialized with my company, we’ve found that [among] the advisors we’ve been working with, there’s a good group of them that are earning anywhere from $40,000 to $100,000 in first-year commissions alone by integrating critical illness into their practices,” said Thorne, who also holds a registered health underwriter (RHU) designation. “These are not specialists — they’re folks that have just said, ‘I’m going back to my existing clientele today because it gives me something new to talk to them about and because they certainly need this protection.'”

For advisors interested in selling CI to their clients, Thorne also stressed a sense of urgency as a result of an announcement earlier this year by Munich Re, the major re-insurer for CI in Canada. Munich Re said premiums will go up this year anywhere from 13% to 17%. The company will also look back at the end of the year and decide whether it will have to introduce adjustable plans, as opposed to the guaranteed ones — whose terms and prices cannot be altered — currently in force.

Thorne said the biggest obstacle many advisors face in selling CI to their clients is simply getting the conversation started. A few of her tips to overcome this challenge included:

1. Position CI properly. “The number one thing we’ve found from working with [advisors] across Canada is that they position it as a new health insurance benefit that’s available in Canada — it’s called critical illness insurance, it pays you a lump sum amount of money if you suffer from a heart attack, a stroke or cancer and you have the ability to do whatever you want to do with this money when it becomes available. It’s different from your group insurance plans, it’s different from your government plans, have you heard of it?'”

2. Ask one key question. By asking clients if they know of somebody who has suffered a serious illness such as a heart attack, stroke or cancer, Thorne says it helps the client make the connection that, “Yes, they know somebody who’s had a serious illness and they often know what the impact has been.” There are also variations on a “Do you know someone?” form available where clients can write in the names of the people they know who have suffered a serious illness and at what age it happened to them to further illustrate the point that it can happen to anyone at any time.

3. Make it real simple. Thorne says that some advisors cut right to the chase and simply call CI “cancer insurance” or “heart attack insurance.”

Thorne also offered some advice on overcoming objections of clients who feel they don’t need CI coverage. One strategy focused on a basic understanding of what the risks factors are in becoming seriously ill and communicating those to the client.

“Recognize that one in three Canadians will be diagnosed with some form of life-threatening cancer, recognize that heart disease is on the increase and coronary artery disease is on the increase,” said Thorne. “Recognize that the other side of it is that we are surviving these illnesses better than we’ve ever survived them before — that’s the important factor here.”

Thorne reported that another favourite objection of clients to purchasing CI is to tell their advisor if they do become ill, they will cut luxury items out of their life, forego vacations, re-mortgage their homes or — perhaps most distressing to Thorne — stop making deposits to the investments for their retirement plan. “My thought is, ‘Why would you want to do that?'” said Thorne. “I want you to be in a position that when you suffer that serious illness, I want you to still make those deposits to your investment [portfolio] because you’re going to have capital that is going to allow you to do that and because you’re also going to have capital that will allow you to focus on your recovery.”

Thorne’s final piece of advice for advisors looking to boost CI sales is to buy a policy for themselves. “I want you to be able to look at your client in the eye and say, ‘Yes, I do and that’s why I’m talking to you, it’s because I feel it’s so important for you to have this protection,” she said. “If you cannot qualify for this coverage, then I want you be able to look at your client and say, ‘I could not qualify, I’m uninsurable and this is the reason why I’m talking to you today, because you’re healthy, you need to have this protection in place to manage this risk exposure so that you never end up in a position like we’ve talked about in the past.”

Filed by John Craig, john.craig@advisor.rogers.com.