The Invisible Employee: Making the Case for CI Insurance to Small Business Owners
Wednesday, October 25, 2006
Small business owners have a great need for critical illness insurance; however, many agents find it difficult to sell CI to this group of people. One of the most frequent laments I encounter is that it is near impossible to help small business owners understand why they should own such a policy.
I have used the following approach with much success. Of course, the approach assumes that you are beyond the introductory formalities of who you are and that the client already knows you are an insurance agent.
Dialogue
<b>Agent (A):</b> "As a business owner, I would like to propose to you that you hire a new invisible employee."
<b>Business Owner (BO):</b> "What are you talking about?"
<b>A:</b> "I would like you to hire one or more employees, but only pay each employee $8 to $10 per day."
<b>BO:</b> "That sounds illegal and what would the employee do?"
<b>A:</b> "Trust me, it is not illegal, and his/her job is really simple ? anytime between now and age 65, if you had a heart attack, stroke, cancer or any of 23 illnesses, this employee would be bound by a signed contract to pay your lease on this building for the following three years as well as paying off all balances on your credit cards and the mortgage payments on your house for three years."
<b>BO:</b> "Why would he do all that?"
<b>A:</b> "Because you will possess a signed contract, backed by one of Canada's largest insurers, that states anytime between now and the age of 70, if you had any of those 23 illnesses that is the amount of money that you will receive, paid tax-free to you."
<b>BO:</b> "Yes, but what happens if I never get sick? I would have paid that employee all that money for all those years for nothing?"
<b>A:</b> "No, you see, this invisible employee has something else written in that contract."
<b>BO:</b> "What's that?
<b>A:</b> "The contract has a built in 'No Regrets' option."
<b>BO:</b> "What is that?"
<b>A:</b> "Well, the option says that if you never make a claim before age 70, that employee is bound by contract law to return to you anywhere from 75% to 100% of the total salary paid to him over all those years. How does that sound to you?"
<b>BO:</b> "I would like all my employees to be like this one."
<b>A:</b> "Now that employee wants to know something about your family history before he accepts this job."
<b>BO:</b> "Hang on a second; you're saying my invisible employee is an insurance company!"
<b>A:</b> "Yes."
<b>BO:</b> "Well, if he were a real employee, I could deduct his salary as a business expense. Can I do that with this product that you are talking about, Ms. Agent?"
<b>A:</b> "Well, yes you could, providing the purpose of the plan and how the benefit is to be used is well documented with your accountant and lawyer. I might even suggest that you include George, your foreman, for $50,000 of coverage as a key employee, that way he receives an added tax-deductible benefit by the company. That is, he will receive the benefit nontaxable to himself should he ever make a claim - and he will rightly perceive it as an appreciation from you of his loyalty and hard work. Remember, if you tax deduct that employee's salary, and he pays the 75% or 100% of it back to you that would be taxable to you." (Note: The employee's salary is = to the premium and benefit is the Return of Premium rider.)
<b>BO:</b> "Remind me, how much did you say this would cost me?"
<b>A:</b> "About $8 to $10 per day."
<b>BO:</b> "How do we start?"
Sean Long, Advisor.ca (06/30/05)
Sean Long is responsible for successfully introducing CI to over 20,000 agents and brokers in Canada, the U.S. and the Caribbean marketplace. He created www.criticalillnesslearning.com, the world's largest website devoted entirely to the training of head office personnel, agents and brokers on critical illness insurance and long-term care products.
"R.G. Packman & Associates always delivers high quality work. They have dedicated professionals who are very well respected by brokers throughout Canada."
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