While a modified offer may lookdifferent than what your client anticipated, it still providesvaluable coverage that can help protect them if they incur adisabling condition. (Photo: Shutterstock)

When talking to your clients about the importance of income protection, you probably paint a pictureof how coverage can contribute to their peace of mind. You might discuss how a policycan be tailored to a client's occupation and financial situation,and that it will help preserve their standard of living if theywere to experience a severe illness or injury.

However, while you most likely talked with your clients aboutthe application process, you may not have discussed howunderwriting can affect the policy offer. Namely, that a policycould result in a modified offer.

What is a modified offer?

An individual disability income (IDI) application can result ina modified offer due to medical, occupational or financialcircumstances uncovered during the underwriting process.

A modified offer doesn't mean that a client's application isrejected or that they are ineligible for coverage. Instead, itmeans that a client's policy is approved, but it may look slightlydifferent than the original policy they applied for. This could bedue to a client's known medical condition, or their financialsituation didn't match up with the benefit payout they may haveapplied for, or their occupation may require a higher premium.

Related: 5 tips to selling individual disability incomeinsurance

For example, a policy may exclude injuries or conditionsinvolving the client's back if they have known back problems from a car accident. Or, if theychanged jobs during the application process, the maximum benefitamount the client is eligible for may have changed.

Help clients see the positive

Some producers fear client reactions to modified offers. Inreality, an IDI application resulting in a modified offer is afairly common occurrence and can still make all the difference ifthey were to suffer a long-term health condition in the future.

While a modified offer may look different than what your clientanticipated, it still provides valuable coverage that can helpprotect them if they incur a disabling condition. It's crucial tohelp your clients understand what the valuable income protection intheir new policy can offer.

Explain the situation

First, it's helpful to normalize this situation. Modified offershappen — a lot. And it's not because a client is considered “bad”or that their situation isn't worth covering. It's important tohelp clients understand even if the carrier includes an exclusion,there are still many conditions covered.

Showcase the strength of the policy

Your client wants IDI coverage to ensure that their income isprotected. Showcase the strengths of the policy and how it cancover them if they were to become sick or injured, with a medicalcondition not stemming from the exclusion, and be unable towork.

Rely on your team for help

While you may think you're on your own to deliver the news andfigure out how to move forward with a client's policy, you aren't.Call on your General Agent for assistance. They have been throughthis situation numerous times, have good relationships withcarriers' staff and can provide counsel on how to talk with yourclient.

Sell the value of coverage

A modified offer for an IDI policy is good coverage for yourclient. While the coverage may have exclusions due to medical,occupational or financial circumstances, the income protection itprovides is important as your client grows in their career.

Sue Schweitzer, senior director ofindividual disability insurance underwriting at The Standard, leadsIDI underwriting operations, including distribution system supportand case management for fully underwritten businesses.