Disability benefits do not make for an easy sell. While it’s not uncommon to need disability benefits at some point during one’s career, it’s not a topic people are eager to face, much less discuss and plan for. So what makes for successful disability insurance sales? LifeHealthPro.com spoke to three top producers in the industry to see what trends and methods are helping people realize the importance of these benefits.
- Insurance carriers are participating in higher indemnity amounts, or the amount of a person’s actual economic loss, and have liberalized the definition of disability. This means that more conditions that prevent people from working are covered, and more money can be received should one become disabled.
- “Transitional own occupation” definitions are becoming available for a lesser cost. This type of plan would pay a person who becomes disabled in one job but can work another job that pays less the difference, so their income does not change. This lower priced option would make disability insurance available to more people.
- Disability plans that mirror 401(K) plans are important, considering that when a paycheck stops so does savings for retirement. With these plans money can be put away in a trust fund so that when disability benefits stop, there will still be money to live on.
- Many people do not realize the prevalence of disabilities, or the financial hardships it can cause. Nearly one in three women and one in four men will be kept from work for 90 days or longer because of a disability. One in seven people will be disabled for five or more years. In addition, 46 percent of bankruptcies are caused by major medical illness or injury and 53 to 79 percent of Americans live paycheck to paycheck. Educating clients about these risks and encouraging them to take action can be one step over the hurdle. Protectyourpay.org and the LIFE Foundation are working to help people understand the importance of insuring their paycheck.
- The financial realities of paying for life insurance rather than trying to live without a paycheck are often not considered. One method to help clients understand is to ask if having $200 less a month would make a significant difference in their life. If the answer is no, ask if having $4,000 less would. That answer will likely be yes. Suggest that if they are willing to pay $200 a month for disability insurance, the $4,000 a month will be protected.
Though it may be a difficult conversation, producers have many methods to show the importance of disability benefits. Between trends in the industry and the reality behind what becoming disabled can do, there is much to prove that the cost to have disability benefits far outweighs the consequences of not having them.
