Why You Need an Impaired Risk Life Insurance Broker on Your Financial Services Team

This paper explains why the life insurance sales process needs an impaired risk specialist.

3 types of life insurance sales.

I have been selling life insurance for over 25 years. In that time, I have seen life insurance sales fall into one of three basic categories:


  1. Jumbo estate and business sales;
  2. Low-cost term sales (includes permanent products with small face amounts, for people who qualify for preferred or standard underwriting;)
  3. Impaired Risk (candidates who present a higher risk due to current health; medical history; lifestyle; avocation; travel; citizenship; or financial/legal/motor vehicle record.)


Why consumers want to work with an impaired risk specialist.

When I first launched my brokerage, we published a website advertising our services as a specialist in high-risk cases. Almost immediately we were flooded with email requests for help from people all over the country! It was remarkable. Clearly, there is a demand among consumers for such a specialist. I soon deduced several reasons why:

First of all, many, many people are having a bad experience applying for life insurance. They are getting declined or rated unexpectedly, and realize that their regular insurance guy or gal doesn’t have the skills for handling higher-risk cases.

Secondly, they are not comfortable disclosing personal information to someone who is not an expert in their problem. They may trust their financial planner, investment advisor, or general insurance broker implicitly in that person’s area of specialization. That does not mean they want to discuss their prior drug use, Crohn’s disease, or bankruptcy history with them.

Third of all, the use of a specialist has become standard operating procedure for dealing with many professionals. When people have a special medical problem, they go to a doctor who specializes in that area. They may go to a general practitioner for an annual check up, but will go to a nephrologist for a kidney problem. Likewise with legal issues:  attorneys with specific expertise are sought for estate planning, litigation, or real estate matters.

Prequalification is the key to client satisfaction.

Potential applicants who pose a higher underwriting risk realize they need special underwriting attention; at the same time, however, they expect the same level of service as people who present a standard or preferred risk. They assume their application will be approved at the rate quoted.

My firm accomplishes this with a state-of-the-art prequalification process. We invest significant resources in each client to obtain thorough and accurate quote information. All underwriting issues are identified before an app is taken. Very importantly, we confirm that the potential applicant is a “ready buyer,” and will indeed accept the policy if the application is approved at the rate quoted it. Our placement ratio of applications to quotes is very high with our wholesalers, and this encourages them to work with us on both underwriting and service.

The quotes we provide are therefore both competitive and reliable, and our clients can submit a formal application confident of the outcome. We remain their advocate throughout the underwriting process to insure an approval at the rate quoted.

Why conventional life insurance sales operations do not prequalify candidates.

The vast majority of life insurance sales people do not prequalify their clients for coverage. Those that do prequalify, typically do not do so effectively. This includes both full-time brokers and agents, as well as other financial consultants who sell life insurance as a side product. There are several reasons for this.

First of all, field underwriting is not typically part of their sales training. They are not knowledgeable in all the various risk areas that affect mortality. They don’t develop the people-skills needed to guide potential applicants in the full disclosure of private health and lifestyle information. Nor have they developed an efficient system for conducting client interviews, obtaining medical records, and acquiring all the other necessary quote data.

Secondly, they have not created the complex network of connections that are needed to consistently obtain good rates for large numbers of people posing diverse underwriting risks. Affiliations with different general agencies are required to have access to a wide variety of underwriters. Research into new vendors offering new companies and products needs to be conducted on an ongoing basis.

Most importantly, the standard of “an approval at the rate quoted” is not integral to the business model of many sales people. All too often, they submit an application speculating that their client will be approved at all, let alone at the rate quoted. When inevitable problems arise, they have not positioned themselves as client advocates to hold both the general agent and the underwriter’s feet to the fire.

How to significantly increase sales revenue in your firm.

The impaired risk life insurance specialist has a unique set of strengths. They can be utilized to complement the proficiencies of different types of financial services teams.

His expertise in substandard risks equips him to handle standard and preferred risks quite easily. A firm with core proficiencies outside of life insurance, such as in financial planning, investment management, or employee benefits, can utilize his talents to handle all life cases professionally. Life insurance can become a major source of revenue.

A firm that is well-established in closing jumbo and/or low-cost term cases may not have the prequalification system in place to effectively handle substandard cases. The specialist can then be brought in to close those sales. The firm now has the capability of handling all levels of risk.

This week’s seminar will take place on Thursday, May 10th, 4:00 p.m. to 4:30 p.m. EST.

A sales seminar with Darren Hardersen, FLMI, Principal of The Hardersen Group.

Darren will be discussing Foreign Nationals, Foreign Residents and Foreign Travel.

Dial-in Number: (515) 739-1245

Access Code: 240970

Online meeting link:  https://join.freeconferencecall.com/skobrin

Instructions: At the scheduled date and time of the meeting, dial in to the conference line. When prompted, enter the access code followed by hash (#).  To join the online meeting, click on the meeting link listed above and follow the prompts to join the meeting.

Come join our LinkedIn group!

“How to make your strategic insurance partnership hum with activity!”

This group is for brokers and advisers who have formed a strategic partnership with the Office of Steven H Kobrin, LUTCF/The Hardersen Group/Crump. It is also for financial professionals who want to learn more and potentially join us.

Strategic partnerships among sales people, general agents, and wholesalers are the wave of the future in our industry. Together we can bring the best products and services to more insurance consumers than ever before. This group will provide you with ideas and insights on how to do that. 

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