The Declined Client

Introduction

When a client is declined for life insurance, there are a number of important steps that an agent needs to take. The primary goal for the agent should be to preserve the relationship with client. The secondary goal should be to explore other options for coverage. This guide offers a step by step protocol for accomplishing both goals.

Support the client's Normal Feelings

Clients are not happy about being declared uninsurable. In their eyes, it is a rather blunt statement about their mortality. They are understandably and naturally angry and defensive. The agent's first responsibility is to support and validate the client's feelings over the declination.

Suggestions:

Let the client know that you too would be upset if you were declined for life insurance.
Let the client know that it is your job to help the client and the client's physician find out the exact reasons for the declination.

Everyone wants to have their feelings validated; they want to be told they have a "right" to feel a certain way. Any attempt to dismiss, minimize, or rationalize the client's feelings will only be meet with more hostility. However, acknowledging a client's feelings does not mean:

You attempt to practice medicine on the client's behalf.
You blindly agree that the life insurance carrier is wrong in their decision.

You must remain neutral. The only value you have to the client, whether the client is ultimately insurable or uninsurable, is to hold fast to neutral, professional ground.

REMEMBER: You are the facilitator in getting answers. Trying to defend the carrier's decision or the denigrating the carrier's underwriting decision will only undermine your relationship with your client.

Map Out An Action Plan

The best response to a crisis is to develop a detailed action plan. The client needs to know that you will undertake a series of steps on his or her behalf. You need to be clear on what steps are going to be taken to resolve the situation.

Suggestions:

1) Draft a letter from the client to the carrier requesting that the reasons for the declination be forward to the client's attending physician (click the Letter button to obtain a sample letter that can be downloaded)

2) Have client the sign and date the letter.

3) Fax the letter to the declining carrier's underwriting department.

4) Obtain in writing from the carrier an acknowledgement of the client's request as well as an estimate of when the information will arrive at the client's doctor.

5) Instruct the client to make an appointment with his or her doctor to review the information.

6) After the client has reviewed the information with his or her doctor, find out if any additional tests or procedures are planned.

REMEMBER: At this point it is the client's call for pursuing either and appeal of the original decision or other carrier resources. After meeting with his or her doctor, the client may simply not want to pursue further negotiations. Be sure you clarify the client's real intentions.

Renegotiate The Original Offer Or Find A New Carrier?

Even without additional medical testing or clarification, you can appeal the original carrier's decision. However, you will also need to think about approaching other resources.

Suggestions:

1) Appealing the original declination without new medical information is a waste of time. Take the case to a brokerage outlet that specializes in substandard underwriting and get a second opinion.

2) If there is new medical information, then an appeal is in order. This is provided the client wishes to pursue the case.

3) Be careful not to create false hope for the client in either process. Simply state that your intention is to make sure the client has been afforded a fair opportunity to obtain life insurance.