Great Features Don’t Cover Income Gaps
It hit me recently how challenging it is for even seasoned pros, in the heat of competitive sales encounters, to maintain a balanced focus on crucial selling points.
In our zeal to excel on features and provisions, it’s easy to momentarily lose focus on the fundamental principal of income gap protection.
How Big a Gap?
It’s a given that the majority of the client discussion is spent comparing and discussing contract features and provisions. These critical conversations – which for a physician are most effectively positioned as an “IDI Supplement” – are where we dig into specific contract language that will determine whether a physician qualifies, and for how much..
But the “how much” question at its root starts with, “What is the maximum benefit?” – something that these days is much less of a given.
Shrinking Maximum Benefits
Some traditional LTD carriers today are reducing the maximum benefit they will offer to physicians, widening the gap in disability income exposure. So, matching features becomes a moot point if at the end of the day the doc ends up with $5k/month less than they really need.
The truth is, many of today’s physicians need and can comfortably afford up to $20,000/month of group LTD coverage.
Finding the Balance
Obviously, this isn’t a provision (lower max benefits) carriers are going to tout. It may take extra due diligence up front to get the latest coverage limits. But this starting point will help quickly narrow the field for a more focused evaluation of specific features – with the income gap issue always in sight. It is possible to simultaneously provide strong “IDI Supplement” type provisions with high coverage limits.
Carrier Commitment to Physicians?
Obviously, even the best features won’t cover an income gap. If you haven’t checked your carriers’ coverage limits recently, you may find a bigger gap than you or your clients are comfortable with.
This is also a quick and easy way in a soft market to determine a carrier’s core commitment to the physician market. Great features are one thing, but at the end of the day, committed carriers recognize the magnitude of the income gap with physicians, and make the long-term commitment to work with you in closing it.
As they say across the pond, “Mind the gap.”