Beyond LTD: Using Disability Insurance as Your “Trojan Horse” to Open Doors and Win Doctor Clients
This regularly updated blog post features scripts and processes you can use to leverage MGIS disability insurance products to win new business. Our most successful brokers use MGIS as a type of “trojan horse.” By approaching groups that employ doctors with a specialized disability product tailored for them, brokers gain trust and are able to offer other benefits to these groups as well.
Script 3: “Do I have enough income protection?”
Prepared by Keith Mangrum
A good entry into a medical practice is to ask if the doctors have “enough” income protection. If you are asking this question of an Administrator, I would encourage them to let the doctors decide for themselves. If speaking to a Doctor, I would suggest that each Doctor should be offered this choice.
And if a doctor says he or she has “plenty” – ask them if their spouse would agree!
Oncologists, Orthopedic Surgeons, Neurosurgeons, Dermatologists, and Plastic Surgeons often find that maximum amounts of IDI and LTD still leaves them with less than 60% of their income protected. Solution?
Very few brokers talk about (or even know about) a third layer of income protection now available from MGIS and Lloyds of London for highly-compensated physicians – tax-free coverage designed to protect up to 70% of income when combined with IDI and LTD. You can differentiate yourself from the rest of the employee benefit brokers by introducing this valuable coverage.
Obstacles and Objections
- “The practice won’t pay for it.” (Fine; it is paid by the doctors).
- “Only a few doctors might be interested.” (OK; we only need ONE participant).
- “We don’t like blood or urine tests.” (Good, we don’t either; we can provide up to $20,000 in monthly benefit with a few simple health questions).
- “We don’t have the bandwidth to add another “benefit”.” (We create a dedicated “portal” for doctors to learn more about the product, obtain a real-time quote, apply for coverage and pay for coverage. No payroll deductions, no bills, no eligibility issues, no extra work).
- And, “But I like my current benefits broker.” (Good; I can just be your Hi Limit DI consultant, as it is not an “employee benefit”).
Lastly, contact the MGIS Regional Vice President of Sales (RVP) in your area for next steps and any help in the above process.
Script 2: Explaining the Importance of Group LTD Coverage to Doctors
Prepared by Keith Mangrum
One of the most common trends in the benefits broker industry is the lack of awareness about Group LTD (Group Long-Term Disability) coverage among doctors. Many doctors, in particular, overlook the importance of this coverage and believe it is unnecessary for them.
What they fail to understand is that disability insurance and LTD can work together to protect more income in case of any unfortunate events. LTD is not just an employee benefit but a crucial component that can protect an individual’s income in the event of a disability.
If you are a financial advisor or a group benefits provider, it is vital to raise awareness about the significance of LTD and why it is essential for doctors.
When calling on a group, ask if they have Group LTD:
If NO – ASK: Why Not?
Typical response: “The doctors have their own disability policies and don’t want to spend any more money on employee benefits.”
Doctors usually purchase Individual Disability Insurance (IDI) early in their careers and have a negative opinion of Group Disability Products. However, IDI alone will likely not be sufficient in the event of a disability, especially if a doctor’s income has increased dramatically.
Group LTD is seen as a commodity, but a good plan is often necessary for doctors to protect their income.
The doctors don’t understand how DI and LTD can work together to protect more income.
They think LTD is “just an employee benefit “and not for them.
And it’s unlikely they’ve been offered the specialized coverage we offer. MGIS uses a CPT code Definition of Disability, meaning that if doctors cannot perform one or more of their usual procedures, they are considered disabled.
SIDE NOTE: The office manager’s income is at risk if a doctor is disabled. You will need to get them on your side.
One way to do this is to mention how MGIS products can be used as a recruiting and retention tool.
After explaining this, ask for a census and offer a no-obligation quote.
If YES – ASK: Could a disabled partner’s K-1 income reduce their LTD benefit?
Typical response: They have NO idea. K1 income is a distribution of income from a partnership or S corporation, and it can impact a doctor’s LTD benefit in case of a disability. This is a significant concern as doctors might assume their LTD policy fully covers them, but they might not be getting the full benefit.
ASK: Do the doctors care about their LTD coverage?
If NO – You will need to provide reasons for them to care. This can include presenting case studies and bringing your expertise to the table.
If YES – Then offer a detailed analysis of their current policy.
“If possible, I would like to perform a policy audit on your existing disability insurance policy to see if MGIS can provide complete coverage.” This is an excellent opportunity to open the door to further opportunities with different types of insurance.
Lastly, contact the MGIS Regional Vice President of Sales (RVP) in your area for a detailed policy analysis and any help in the above process.
Script 1: Do your prospects have a clear understanding of how their Group LTD contracts define ownership income?
Prepared by Keith Mangrum
Ownership income can account for 50%+ of a practice partner’s income. Several well-known Group LTD carriers account for ownership income received while disabled in a way that the owner claimant’s LTD benefit could be reduced to as little as $100 per month (as opposed to the expected $10,000 or $15,000 benefit)
This can lead to obvious problems down the line, and many healthcare groups are unaware of this shortcoming.
Use this process to educate groups and introduce MGIS disability insurance as a solution:
Ask your prospect this question:
“How does your current LTD policy account for K-1 income that you (or a partner) would still receive if disabled?”
Out of 100 groups, I bet only one could respond with any kind of meaningful answer. Most benefit brokers sell LTD primarily as an employee benefit and are not aware of the potholes in an LTD policy encountered by owners and partners at claim time. And don’t let them confuse including K-1 in PDE (Pre-Disability Earnings) with K-1 being an offset – it is not the same thing.
Explain the possibilities of how LTD policies handle ownership income.
Worst Case Scenario: The LTD benefit is reduced by a dollar-for-dollar offset for ownership income received while disabled (like Social Security Disability).
Somewhat Better: The LTD benefit is reduced by a dollar-for-dollar offset for ownership income received while disabled, but only if it is included as part of Pre-Disability Earnings (PDE). Note that removing ownership income from PDE can also reduce the total or partial LTD benefit.
A Little Better: Ownership income is included as part of Disability Earnings, making it an indirect offset to the LTD benefit (like part-time work earnings). However, this approach may also negatively impact the policyholder’s eligibility for benefits and result in no benefit being payable.
Most Desirable: No offset and not included in Disability Earnings, or an offset only if LTD + K-1 income is greater than 100% of Pre-Disability Earnings. This scenario is virtually impossible.
Ask your prospects for the current LTD policy and offer to provide them with a “policy audit.”
“If possible, I would like to perform a policy audit on your existing disability insurance policy to see if there are any gaps that need filling.” Most prospects will be willing to engage in this activity. It is an excellent opportunity to open the door to further conversations.
After this step, contact the MGIS Regional Vice President of Sales (RVP) in your area, who will provide a detailed policy analysis and recommend an MGIS solution.