Not that long ago, I had two prospects in their 60s — I’ll call them Mr. and Mrs. B — come to me for life insurance. Mrs. B’s overall situation was fine and she was insurable, but Mr. B had had bladder cancer and subsequently had his bladder removed nearly three years prior to our meeting. Of course, Mr. B wasn’t eligible for coverage, but we had received a couple of initial positive indications from underwriters, and so we submitted applications. However, due to certain medical factors, we could not obtain coverage for Mr. B, even through an outside broker. So, we accepted a two-year postponement from one of the carriers to whom we originally applied and ended up writing a graduated policy for Mr. B in the meantime.
While I suppose I’ll receive several suggestions regarding the placement of nonstandard risks and carriers that accept them, for the purposes of this discussion, I’d like to focus on the issue of declined life insurance prospects themselves, and the proper strategies for handling them. (And in so doing, it should go without saying that we are speaking of prospects with health issues and obstacles somewhere short of a current terminal illness or condition).
When dealing with a declined life insurance prospect, the first thing to remember is that above all, your prospect is a human being who has come to the realization — albeit too late, perhaps — that he or she is in a negative situation and needs your help. Your prospect is also a human being who cares enough for another human being to seek protection and provisions for that person (or persons) in the event of his or her death. Accordingly, treating the situation sensitively is critical, as the prospect’s feelings are deeply involved. After all, your prospect’s own health and mortality are at issue and they have just been judged to be inferior to the rest of the general populace. On top of that, your prospect fears that they won’t be able to provide for the people they love. Facing both eventualities more vividly than ever before (if ever before) can be devastating, and it may stir many emotions on several different levels, including but not limited to grief, distress, impotence, guilt, recrimination and a whole host of other negative feelings.
The second thing to remember is you must do everything you can to preserve the relationship you have begun establishing with your prospect. They have become desperate enough, and you have built enough trust with them that they have taken the leap to disclose to you intimate details of what is a very difficult and personal situation. No one should take such a disclosure lightly. Carefully preserving, if not building upon that trust and that relationship, is a matter not only of respect and decency, but also of practicality. The respect and decency concerns are obvious. But on the practical side, the prospect does not want to go about town retelling his or her very personal story to advisor after advisor. Your prospect would much prefer, if at all possible, to do business with you. At the same time, if there is a sale to be gained after having invested this much of your own time and effort (as well as emotion) in the situation, you should seek to make it — and the prospect would never begrudge you for it.
Of course, there also may be other potential sales involved, whether you are able to find coverage for your prospect or not — sales to the spouse, other family members or other ancillary sales. Preserving your personal and professional relationship with your prospect keeps you in a position to make one or more of those potential sales.
The third thing to bear in mind is to explore every possibility in seeking coverage for your prospect before you finally determine coverage is not available. You owe it to your prospect and yourself to do your utmost — whether it involves requesting that medical information and results be rechecked for any errors (by both the carrier’s underwriters or medical staff as well as the prospect’s); requesting that the medical information be reviewed anew to see if there is any different type of interpretation; appealing for every additional consideration you can get from an underwriter or underwriting supervisor; seeking reduced coverage or limits with or without additional ratings or exclusions; adding a carrier that may be able to write at least some basic amount of coverage for the prospect; or sending an application to an outside broker specializing in placing nonstandard risks.
The fourth thing to remember in dealing with a declined life insurance prospect is that it’s always important to maintain a professional distance at the same time you possess and express empathy for your prospect. They are depending on you. You will only see things clearly when you are not swayed by unreasonable emotion, and you must be at your best in dealing with underwriters and others to achieve whatever you can for your prospect. Meanwhile, you also dare not forget to explain forthrightly and fairly to your prospect the positions of your various carriers. If you do, you will spare your prospect additional turmoil due to unfounded feelings of rejection, distrust or anger they might otherwise experience toward your carriers. What’s more, you have a duty to defend your carriers’ positions and to uphold their rightful exercise of the underwriting pen to accept or reject risks based upon legitimate criteria. If necessary, you can reinforce these points further by explaining that most, if not all of those criteria, have been thoroughly reviewed and approved by the insurance department of the state in which you wrote the prospect’s original application.
Finally, always remember throughout the process never to give your prospect false hope, but rather explain the circumstances exactly as they are and tell them exactly what you are going to do in your attempt to find coverage for them. Anything less would be unkind, unfair and unprofessional. If you deal honestly and compassionately with a declined life insurance prospect, reassure them of your commitment to their case and do your utmost to find coverage for them, they will respect you, be grateful, and often give you whatever business they can. And if not, at least you will have handled their case properly, served them well and done your best to help them as a fellow human being and a professional insurance advisor. What more could anyone ask?
Related posts:
