Help Clients Understand the Need for Disability Insurance

While many men and women understand how valuable life insurance, long-term care insurance and other products can be, fewer fully recognize the importance of disability coverage.

Clients may not understand how real the risk of disability truly is.“While 6 in 10 consumers say they would have trouble meeting their day-to-day expenses if they were to become disabled and unable to work, we also know that few people actually believe they could become disabled and often ignore the risk short-term or long-term disability can pose to their family’s financial security,” Kimberly Landry, analyst for the Life Insurance and Market Research Association’s Group Product Research, stated in a press release. “The reality is 3 in 10 people will suffer a disability that could keep them out of work for three months or more.”

No one likes to think of their own mortality, but individuals know their time in life is limited. However, fewer people may be able to come to terms with the idea that they could find themselves ill or injured in a way that would leave them unable to earn an income for an extended period of time.

So how are insurance producers supposed to clear this hurdle? A number of strategies exist to help clients undertake more comprehensive insurance planning.

Stick to the facts

Many people may find it hard to believe that a catastrophic occurrence could leave them disabled, but it’s hard to argue with clear numbers.

According to figures prepared by America’s Health Insurance Plans and the Society of Actuaries in a report titled “Disability Insurance: A Missing Piece of the Financial Security Puzzle,” the risk of becoming disabled is greater than the risk of premature death, something that many people routinely insure against. This risk is increased for women and the elderly.

Additionally, while people who work office jobs may believe they’re at less risk than those who work with heavy equipment or in dangerous conditions, data shows that most disability is caused by illness, not injury.

While 10.1 percent of long-term disability is caused by accidents, the rest is due to illnesses such as circulatory, respiratory and muskoskeletal​ system diseases.

“There are currently more than 1.5 million people who have left the U.S. workforce due to a disabling condition,” stated the report. “Once disabled, many people are never able to work again.”

Make it personal

Even in the face of such statistics, clients may be unpersuaded that disability insurance is something they require. One strategy financial professionals may want to use to combat this is asking clients if they have any friends or relatives who have ever found themselves unable to work for a prolonged period of time. If they do, chances are they know how difficult that was for the person and their family.

However, even if clients don’t have second-hand experience with this struggle, producers can bring the lesson home by breaking down exactly how being unable to work could affect clients and their loved ones.

For example, not only do clients have to think of meeting everyday living expenses, such as mortgage payments, groceries and utilities, disability could also mean contending with hospital bills, surgery costs, medications, special equipment, personal care, physical therapy and more. And they’d have to handle these costs with a reduced income.

Financial professionals know all too well how valuable disability insurance can be in situations like these, but it’s up to them to help clients get on the same page. By making the risk more real – citing relevant data and showing how the costs could impact a family – producers will have a better chance of accomplishing this.

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Highland Capital Brokerage

Highland Capital Brokerage is committed to developing client-focused relationships with financial advisors using our core competencies of life insurance, annuities, and long-term care. We distinguish ourselves by providing point-of-sale support, advanced marketing, and creative estate and business planning techniques.
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