Advisors told to rethink CI’s role

The world is changing. Where we once relied on coal, oil and gas for our energy needs, we are now switching to wind, sun and biofuel alternatives. Where we once relied on defined benefit pension plans to fund the time between retirement and death, we are now incorporating income annuities and innovative insurance products to maintain our dignity and our quality of life.

This was the message to over 700 insurance advisors at the opening of the 5th annual World Critical Illness conference, in downtown Toronto on Monday.

“Just as our energy sources are changing due to a changing environment, caused by global warming, so has global aging changed the way we deal with our retirement years and our quality of life,” explained Joseph Jordan, an industry veteran and Million-Dollar Round Table member.

Jordan led a panel whose sole underlying message was: the insurance environment is changing and critical illness (CI) is part of that solution.

According to Dr. Guy Proulx, a specialist in geriatric care, solutions are necessary given the current trends in aging. For the first time in human history, there will be more seniors on the planet than children, by the year 2047.

“Aging is not a disease, it’s a privilege,” said Proulx. “And health is not work, it’s an opportunity.”

Part of that opportunity, according to Proulx, is prevention, and “prevention is investment in future planning.”

While Proulx’s expertise is limited to the medical field, his research and experience provided context for the future direction of the insurance industry and for the work many agents and providers are doing to redefine the role of insurance in investment planning.

For Bhupinder Anand, a highly successful U.K.-based advisor and MDRT member who built his book of business on providing clients with CI and other insurance products, the key to providing the best service while building a business is to become committed to these products.

He believes advisors need to develop a business model based on three essential factors: knowledge, belief and passion.

Knowledge, he explains, comes from attending conferences, reading informational material and talking with clients and providers. Belief is developed when advisors put money where their mouth is and buy critical insurance for themselves. Finally, passion is acquired when advisors processes their first CI claim.

Anand explains how advisors truly begin to appreciate the product’s impact when they advocate on behalf of their client. For Anand, this process and its importance culminated in 2006 when one of his clients — a 39-year-old dentist in Windsor, England — was diagnosed with a brain tumour. By liaising with the insurance carrier and the medical community, Anand was able to reduce the stress on the client and his family and “deliver the money at a time when they needed it the most.” Through this experience, and others before it, he realized “how this experience [and the product] helps.”

Jordan explains that agents have to overcome the logical rationale for selling insurance and begin to see and show the holistic side of prevention. He quotes philosopher David Hume as he informs the packed conference room that “intellectual knowledge motivates us to do nothing.”

Instead, he suggests agents move past logical, left-brain thinking and into holistic, right-brain solutions. By providing clients with context, insurance agents can offer preventative solutions. As such, Jordan advises agents to become advocates of prevention in an effort to mitigate negative life consequences.

He explains that in an environment of aging baby boomers and longer life expectancy, clients need an advisor who knows how to address volatility, a right-brain, holistic concept, rather than risk, a left-brain, logical problem. By realizing that the client’s real need is dignity and a high quality of life, agents can begin to appreciate that they are not just selling a product, but solving a problem.

“We all desire to live a life of significance. Significance is measured by value, and value is measured by the size of problem you solve. CI protects assets, maintains dignity and leaves a legacy,” Jordan says. He adds that agents need to forget they are selling a product and remember that CI is part of a solution to a longer life expectancy, a desire for a better quality of life during our senior years, and a protection against unforeseen consequences. “It’s an investment vehicle that humanizes the marketplace and pays people money when they need it the most.”

Originally published in Advisor’s Edge Report in April 2008