Down Economy Can Push DI Sales Up
So far, the 21st Century has not been kind to us in any economic sense. The bull market of the late 1990s has certainly stalled, and the months before and after September 11 have brought news of below average earnings, corporate layoffs, and ongoing 401(k) and other retirement income losses.
Agents who took advantage of the substantive stock market returns and sold vast amounts of variable life insurance are now scrambling for their next act.
Why not scramble to sell disability income insurance? Traditionally, this product has never been easy to sell, but during an economic downturn the need is far easier for people to see. What is a DI policy, after all, but a replacement of lost wages should an accident or sickness occur?
People who watch the business news and perhaps are working in an environment of cutbacks and downsizing can all too clearly see a scary future without a regular paycheck in it. How will they replace it? How will they pay for rock-bottom necessities? Job loss because of layoffs creates just this kind of frightening scenario.
Fortunately, laid off workers are likely to be healthy and therefore can presumably look for other work. It may take time, but it wont be for lack of effort.
Contrast that with someone with a medical problem who loses those same wages. What can the disabled worker do immediately about the loss of income? Depending on the extent of disability, he or she may not be able to seek work actively. There wont be an immediate opportunity to try to find something else.
Thus, as stressful as a potential layoff is, a person who develops a disability is in an even more fearsome circumstance.
What about the Americans with Disabilities Act? Doesnt that protect the job for the individual to return to work?
Passed in 1990, this landmark legislation continues to be narrowed by the U.S. Supreme Court, whose latest ruling last month further whittles down the scope of the ADA.
The latest ruling involved an assembly line worker who claimed the ADA entitled her to special treatment because she suffers from carpal tunnel syndrome. Justice Sandra Day OConnor, writing for the courts unanimous decision, said Congress passed the law to help a specific group of mentally and physically disabled people–not everyone with a physical impairment that prevents the performance of some isolated, unimportant, or particularly difficult manual task.
This ruling should be an eye-opener for employees.
But it might also be a trigger for employersa spur to take a positive step in recognizing the potential loss for both business and worker when a disability strikes. A disability income program–short-term, long-term, voluntary, key employee, salary continuation–is a relatively inexpensive way to address the financial threat imposed by an injury or illness.
But it will be up to the agent to assist both employer and employee in confronting this possible situation in advance. In these difficult economic days, the agent can easily draw those parallels between unemployment and disability to make the point.
People are focused today on protecting their wealth. They see it slipping backward from its rapid growth phase. They are, in essence, trying to stop the bleeding.
Part of wealth protection is ensuring that the nest egg doesnt erode further during a disability. So, my suggestion for todays producers is: Use the economic downturn to make a point, and to place some much-needed disability insurance on those individuals currently lacking this vital form of income protection.
, president of the Center for Senior Studies, Inc., Coral Springs, Fla., is author of Disability Income, The Sale, The Product, The Market, published by The National Underwriter Company, Erlanger, Ky. E-mail him at: SADLERDS@aol.com.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 25, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.