Insurers need to get behind living benefits training for advisorsBy Donna Glasgow | August 20 2009 06:13PM
Although he is recognized as one of the top living benefits advisors in the country, Mark Halpern, Founder and President of Toronto-based illnessProtection.com Inc. says his business is not focused on selling critical illness insurance and long-term care. He takes a comprehensive approach to his client’s insurance needs and much of his business comes from selling life insurance to a high net worth clientele.Although he advertises through radio ads to a wide audience, Mr. Halpern looks for clients that fit a specific market niche.
“I always like to say that all of our marketing is designed to find me people who are 50 years of age plus, healthy, paying lots of taxes, and who hate life insurance.” Why is he looking for clients who hate life insurance? “Because if they hate life insurance, they don’t know what it can do,” he explains. “People look on it as a cost, but it is a very big asset category. Especially, look at what’s happened in the economy in the last while. It’s almost like a lifeboat.”
Mr. Halpern said he wasn’t always comfortable doing business with wealthy people. “I used to be very intimidated to speak with high net worth people. Because when I’d be at their door I would say, ‘Who am I? They probably have the best lawyers, the best accountants, the best insurance person. What am I going to bring to the table?’”
But then he discovered that these high net worth people needed his help the most. “They are taking care of their company and their clients and their employees and their families, but when it comes to themselves, they’re last on the list.”
Often, the insurance policies that these high net worth clients had in place was bought years before, perhaps before they had accumulated much wealth, he explains. “Most of the time you find that they have financial furniture for an architecture that was done years ago, where now their house is looking much different.”
Frequently these clients were sold insurance long ago and then the agent was never heard from again. Just a few weeks ago, for example, Mr. Halpern met with two brothers who have a $90 million company. One told him that he had $10 million of permanent life insurance made up of 2 policies. Upon reviewing the policies, Mr. Halpern learned that this was not the case. He only had $7.5 million of ten year term insurance and the premiums were going to skyrocket in 2016. “The term insurance is going to start costing him $82,000 a year from $12,000.”
Offering potential clients in the high net worth niche a second opinion on their insurance portfolio is a good door opener, he suggests. “I like this idea of giving people second opinions, at least telling them what they have. Most people look at insurance as an event, not a process. If they have it in place, it’s kind of like this check mark goes off in their brain, ‘Okay, I have insurance. Done.’”
Giving them a second opinion can allow an advisor to save the client significant amounts of cash and, as a result, earn their business.
Mr. Halpern recounts that he had a 61-year-old male client that bought a joint-last-to-die insurance with his wife. He was undergoing medical tests at the time of underwriting and as a result he was rated pending the test results. No one followed up with the client even though the tests results were fine. “So, when I finally met him, 10 years after the policy had been in place, those medical tests had been done ages ago. This guy had been spending $12,000 a year more than he had to because nobody had taken care of him. He didn’t even know he’d been rated.”
If an advisor has sales lead for a wealthy client, but is not comfortable working in this market, Mr. Halpern suggests teaming up with an advisor who he trusts and who is experienced in this market. Mr. Halpern recommends joining this individual on sales calls and sharing the case. “In the process, they’ll learn how the veteran does it, so they can start doing it themselves and eventually get 100% cases. One thing they should not do is ignore these opportunities.”
While many advisors are unhappy when their clients’ cases are rated, Mr. Halpern holds another view. “I personally love rated cases.” Why? A rated case means the insurance company is saying, “Great news, we can give you the insurance. The bad news is there is a greater chance that you’re going to collect on it.” When an advisor presents a rated policy to clients this way, “It’s going to make him wake up and think ‘Maybe this is the last time I can get this insurance. Maybe this is the last time I can get all my insurances. Let’s review everything.’ It just allows you to engage in a comprehensive conversation.”
In terms of selling critical illness insurance to the high net worth market, Mr. Halpern says he discovered that sometimes the CI products on the market were not suited to these clients’ real needs. He realized that these clients were thinking of buying $500,000 in CI coverage to obtain medical care in the U.S.. Yet, these clients were wealthy enough to write their own cheques for that amount. “What they were really looking for was some kind of stop loss protection.”
So, last March, Mr. Halpern’s firm, illnessPROTECTION.com Inc., launched a new product designed for this niche called ELITE U.S. HealthcareTM. Available to Canadians only, this insurance product provides timely access to medical centres of excellence in the U.S. like Cleveland Clinic, Sloan-Kettering, Mayo Clinic and Johns Hopkins. The policy covers up to US$5 million for treatment and travel costs.
The Elite product also offers access to information, access to healthcare and access to funding on a concierge basis. Aimed at business owners or professionals, Mr. Halpern’s firm teamed up with Cleveland Clinic in downtown Toronto and Expert Travel Financial Security (E.T.F.S.) to offer the product.
This insurance product is available across Canada and sold through advisors, wealth managers and financial institutions. The product is underwritten by Royal & Sun Alliance and administered by Global Excel Management Inc., the 24/7 medical assistance team of E.T.F.S.