May is Disability Awareness Month

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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. 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 CDC has stats to help brokers educate their clientele 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%)

Things to Consider

How will a loss of income impact the well-being of your 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. Lets start this conversation.

"We'll use our savings"

Relying on savings is a good approach for the short term. However,

in some cases, depending on how long a disability lasts, savings

could be wiped out in a few weeks or a few months. On top

of your regular monthly expenses, there could also be medical

bills. Disability insurance offers an affordable way to provide a

source of income you can count on until you can work again.

"I have disability through work"

Coverage through work is a great start. Typically group coverage pays 60%

of your income, but don’t forget that money may be taxable. Your group

policy and an individual disability policy together may provide a more

adequate monthly income amount to help you cover your bills. Let’s get

details on your work coverage – when it would start, how much it would

pay and for how long – and make sure you have the coverage you need.

"I'll apply for Social Security disability"

This may be an option, but getting approved is not a certainty. In 2017,

only about 1 in 3 people who applied received disability benefits from

the government.1And they get less than $1,200 a month.2If you were

able to qualify, would that be enough to take care of your family?

"I don't think I will use it"

We hope you don’t need it. But the facts are 1 in 4 of today’s 20-year-

olds will become disabled before they reach age 67.3. Another fact

- injuries account for only 9% of disabilities; most are illnesses. 4. If

you rely on your paycheck, let’s protect it with disability insurance

"Its too expensive"

Typically disability insurance costs between 1 and 3 percent of your salary,

like the policy we talked about today. Where will the money come from if

you’re sick or injured and unable to work? Not having disability coverage

could cost you even more. For dollars a day, you’ll have the protection you

need to keep your family and your lifestyle going if something happened.

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