Insurance advisors have a responsibility to talk to clients about the need for living benefits, in order to protect them against the potentially significant costs they could face down the road, according to Larry Lawson, marketing representative with Ontario Blue Cross.

Speaking at the Independent Financial Brokers (IFB) fall summit in Toronto on Tuesday, Lawson said advisors should be actively educating clients on the importance of having living benefits coverage, such as disability insurance, critical illness (CI) insurance, and long-term care (LTC) insurance.

Despite the high likelihood that Canadians will experience some sort of disability or critical illness over the course of their lifetimes, few Canadians take the initiative to protect themselves financially against that risk.

“Our job is to say ‘you need this, and this is why’,” Lawson said.

He suggests that advisors make a habit of addressing living benefits as part of an annual review of each client’s overall insurance needs. Outline each type of insurance and provide written recommendations with respect to the various types of coverage, then have clients sign the form to indicate whether or not they opt to take the coverage.

“To just have a 45-minute discussion on living benefits, every time you do a review with your client…and then having them sign off,” he said, “is an essential part of doing your job properly, but more importantly, protecting your practice.”

Lawson said advisors should not be deterred by the common misconceptions associated with selling living benefits products, such as the cost of premiums being unreasonably high, and claims being commonly denied.

He argued that the price of health insurance products is generally very reasonable, when considering the value of the benefits that clients are receiving. Furthermore, he said the denial of claims occurs less often than perceived, and is more common with group benefits products such as long-term disability than with individual products.

He admitted that living benefits products can be a tough sell, as it’s often hard to convince clients of the importance of buying this type of coverage when they’re juggling many other demands on their income. In addition, he said applications for these products tend to be declined more often than traditional life insurance products – an experience that can be discouraging for advisors.

“It’s more difficult than selling life insurance, I will admit,” he said. “It can be very disheartening to fill out three or four disability applications and have them declined, or fill out three or four CI applications and have them declined.”

To avoid having applications that are denied, Lawson says advisors should do their due diligence up front on living benefits applications, by inquiring about any health or lifestyle issues that may present an issue during the underwriting process. This includes their family history of health problems, any occupational safety risks they face, and their hobbies, among other lifestyle considerations.

“Save yourself hours of work, and tons of frustration,” he said. “If you don’t ask those things, you’re not going to get anywhere.”