Disability insurance is perhaps one of the most overlooked, yet valuable, products available to consumers. According to the Council for Disability Awareness, roughly 51 million working adults will have nothing but Social Security to rely upon should an injury or medical condition leave them unable to work for an extended period of time. Those who filed claims were only paid an average of around $1,200 a month. Recently released statistics show that 1 in 4 of today’s 20-year-olds will become disabled during their working years. To call this lack of additional coverage risky is an understatement. Without proper coverage, many people would drain their savings in less than three months. Compare this to the average duration for a long-term disability claim of nearly 35 months. It’s no surprise that medically-related work loss accounts for around 45% of all bankruptcy filings.
So, why are so many people willing to roll the dice on their financial stability? As a producer, a better question to ask would be “What can I do to convince them otherwise?” With May designated as Disability Insurance Awareness Month, we’re here to help answer that question.
Facts Matter
A client might have a variety of reasons to decline DI coverage, but they can’t argue with facts. A straightforward, research-backed approach can be an effective way to overcome objections. The CDA has provided several stats to help agents educate clients on the risks involved with leaving income unprotected.
- Nearly 50% of adults say, if disabled, they could not pay an unexpected $400 bill without taking out a loan or selling personal property.
- 6% of working Americans will experience a short-term disability of six months or less per year.
- Only 40% of US households have at least $6,275 in liquid savings.
- Most short-term disability claims are non-work related:
- Pregnancies (22%)
- Musculoskeletal disorders (20%)
- Digestive disorders (7.8%)
- Mental health issues (7%)
- The same can be said about long-term disability claims:
- Musculoskeletal disorders (30%)
- Cancer (15%)
- Mental health (8.6%)
- Circulatory (8.1%)
Make an Emotional Appeal
If the cold, hard truth isn’t enough to budge the client, try the emotional approach. Ask questions that make them think about how a loss of income might impact the well-being of their family.
- How long can you be out of work and still keep your home?
- You say you can’t afford coverage, but can you afford to cover living and medical expenses while you aren’t working?
- How will your family react to a sudden and drastic lifestyle change?
- What’s your backup plan if/when your savings account runs dry?
- Does that backup plan involve dipping into your children’s college fund?
While some people might take offense at this line of questioning, that’s no reason to avoid asking them. For many, the decision to go without adequate DI coverage stems from a lack of awareness. The DIAM campaign is your opportunity to start a conversation that, hopefully, opens their eyes.
Disability Insurance Resources
May is Disability Insurance Awareness Month. This provides agents and advisors a good opportunity to discuss the benefits of incorporating a disability insurance policy into their protection mix.
IAMS, Inc. is pleased to offer our Disability Insurance Prospecting Kit. This package contains a wealth of material for discussing disability insurance with prospects and clients, including:
- Sales concepts for agents
- A DI for Business Owners guide
- Consumer-facing flyers with essential details, stats and figures
- Turnkey social posts and fillable forms
- A pre-approach letter and prospecting emails from a trusted carrier
