The unique the role of the impaired risk specialist

The limitation of a general advisory practice.

People with my expertise in helping higher-risk consumers find policies (and there are not a lot of us) play a unique role in the life insurance sale. This is because of the interpersonal dynamics that have emerged in today’s financial services marketplace. Many advisers sell multiple products, including life insurance. While their knowledge of all these products may be strong, their knowledge of the client’s experience buying these products is generally not as strong. This is especially true for life insurance – for which underwriting is extraordinarily intrusive and comprehensive – and doubly true for special risks. These advisors therefore do not develop the skills that are essential for providing personalized, high-end client service on these cases. These skills include:

The unique skill set of the impaired risk specialist.

  1. Education of the client on the value of their insurability, and the importance of protecting it;
  2. Orientation to the world of life insurance underwriting, and the realities that must be recognized;
  3. Guidance in moving comfortably through full disclosure and discussing sensitive personal health information; 
  4. Management of the prequalification process to make sure strategic milestones are reached: confirmation that the prospect is a Ready Buyer; the acquisition of thorough and accurate quote information; the identification of a price ball park; and completion of prequalification to obtain a quote about which the client can be confident they will be approved;
  5. Coaching on how to persevere through the frequently arduous underwriting process; 
  6. Direction on how to resolve issues that pose obstacles to approval, such as discrepancies in medical records;
  7. Advocacy on behalf of the client to make sure their interests are represented throughout every phase of underwriting;
  8. Counseling on how to formulate a strategy for meeting current and future needs for life insurance, given their insurability issues.

Consumers prefer dealing with a specialist.

You can see that these skills are highly interpersonal in nature, and very specific towards providing the higher-risk client with a successful experience purchasing life insurance. The vast majority of financial advisors I know have not cultivated these skills to the required degree, even though they may be successful in selling life insurance to preferred risks. For that reason, among others, many clients prefer to have their purchase of life insurance managed by a specialist, to make sure their specific needs are properly addressed. They may be quite comfortable discussing their business losses with their advisor, for example, but not comfortable discussing their Crohn’s disease, depression, or alcohol problem. It should be noted that many, many high net worth clients have such issues. And if they have had trouble on prior applications, an extra level of sensitivity and proficiency is needed.

Filling the role of client representative.

One related point: many general agents these days make themselves available for direct contact with the potential applicant. This certainly can assist with the gathering of data needed for risk assessment. However, your typical general agent has neither the time, inclination, nor capability of professionally managing the client’s purchasing experience throughout both the prequalification and underwriting processes. Since neither the advisor nor the general agent can do this, it is the impaired risk specialist who fills that client service gap.