Selling critical illness insurance requires innovation and determination

By Al Emid | October 18 2006 08:00PM

Selling critical illness insurance means blending innovative sales technique, personalized presentations and the advisor’s own determination, according to Rick Forchuk, director, sales and marketing West/Ontario/Atlantic at Empire Life.

Early adopters – those who buy a new product before it becomes part of the mainstream culture – present a likely sales target, he said, recalling his purchase of an early VCR machine. “These things were sold to a number of buyers, such as myself because we’re early adopters. We like to be on the leading edge,” he told practitioners at a recent industry conference in Toronto.

While critical illness insurance (CI) has a ten-year history in Canada, it still has early adopter appeal, he told The Insurance Journal during a follow-up interview from his Vancouver office. While early adopters typically pay more than latecomers for new products such as electronics, CI clients will save money since premiums are expected to increase due to rising reinsurance costs and the likelihood that fixed premiums will disappear completely.

Overcoming objections to a product is standard procedure for advisors, but they have to deal with their own objections first, including: their beliefs that the product is too expensive; that it takes too long to get through underwriting; that many applications are turned down; that claims take too long to process; and that it is too difficult for the client to understand, he told the audience. “Most of the objections are in the advisor’s own mind,” he told The Insurance Journal.

Outside of early adopters, advisors selling CI have to convince clients of the very real need he said, again drawing on consumer electronics to make his case. Cable television bills have become more expensive in recent years and consumers have accepted services with more channels than ever conceived of before, he said.

The same holds true for telephone bills, he said. “Twenty years ago the average phone bill in Ontario was less than $20 per month. Today the average phone bill is $150 a month when you include cell phones, high speed internet, call waiting, call forwarding, and call blocking,” he said, suggesting that those needs and products had not been originally conceived, but eventually became indispensable. “As consumers we didn’t say ‘hey I’m dying to have beeps in my ear.’”

Advisors can expect the same sequence of events with CI insurance, he said. “You have to convince people that they need something from you, that you’ve got, that they don’t already have,” he said.

The factual and impersonal touch will not sell CI insurance, he insists, pointing to an ironic combination: the number of outlets providing health information – and the amount of information available continuing to increase, he said, while the number of obese people is thought to be the highest ever.

To underscore his example, Mr. Forchuk cited the film Super Size Me, a documentary built around filmmaker Morgan Spurlock’s 30-day binge in which he ate only McDonald’s food. The documentary includes interviews with experts about fast food and the changes to his physical and mental health brought on by his self-imposed ordeal. Notwithstanding the film’s value, it did not visibly reduce the popularity of McDonald’s, he explained. “We don’t do what is good for us necessarily.”

Nor will factual statistics such as the number of deaths per year from cancer and heart attack make for effective CI sales tools, he said. “Is all of that stuff true? Absolutely. Does anybody care? No!” he contends.

Instead, anecdotal stories about real people with whom the client can identify are far more effective, he advises. “We sell it by talking about people…interesting stories, interesting situations.” For the advisor this means sending a cover letter suggesting an appointment and a clipping of a news story that reflects what happens to a typical individual – with whom the client can identify – faced with unexpectedly high medical bills and not having the kind of coverage provided by CI insurance. “We are compelled by stories that tell us ‘hey, something like that could happen to me,’” he said.

Claiming that a specific company’s CI product is the best is another unprofitable sales strategy. “To say that I represent this company’s CI product because it’s the best is equally silly,” he told the practitioners in the audience. “The best CI product is the one that’s in force when the need arises.”