Expand Your Practice With Group Disability Insurance
While most financial professionals understand the role of disability insurance in helping protect their clients financial security, many still believe life insurance is more important than disability insurance. The fact is, during the average workers career, he or she is much more likely to be injured and need disability insurance than to die and need life insurance.
Why is this? Disabilities can strike at any time, at any age and can last for years. In fact, recent statistics by the Health Insurance Association of America reveal that about a third of working Americans will become disabled for 90 days or more before reaching age 65, and approximately 1 in 7 can expect to become disabled for 5 years or more.
The need for disability insurance is clear. Sales professionals can reap big rewards in the group disability market, but they need to understand who buys, why they buy and what they buy. Here are some key points to consider:
Its an underserved market. For too long, many sales professionals have operated under the assumption that disability coverage is too expensive and less important than life insurance. Others believe Social Security disability benefits and workers compensation make disability insurance unnecessary. The truth is that state programs often dont provide enough income replacement, and Social Security disability benefits are often difficult to obtain.
This emphasis on life insurance over disability insurance may have contributed to lower overall sales of group disability products. Employers of all sizes are significantly more likely to offer group life insurance to their employees than disability insurance. However, ironically, when asked which products they are most likely to add or augment, group disability insurance came out ahead of life insurance.
Sales professionals can take advantage of their existing clients interest in group disability insurance by suggesting add-ons at renewal. Voluntary coverage, which can be partially or wholly employee-paid, allows employers to offer disability insurance at little or no cost to them. You also can review current disability plans with clients to determine if any enhancements, such as adding or removing new provisions, are necessary.
Why they buy. Studies have shown that employers who offer group disability plans do so to keep pace with the competition in attracting and retaining employees. Larger clients (with more than 1,000 employees) also cite managing the cost of absences as a motivating factor. With the surge in health care expenses and rising claim incidence as our population ages, employers increasingly are looking for ways to save money and increase efficiency.
Sales professionals can make group disability coverage more attractive by positioning it as a product that provides benefits to both clients and their employees. For employers, a proactively managed disability plan can do more than provide disabled employees with benefits. It can be a source of valuable disability and absence management information, which clients can use to control the overall cost of lost time and productivity.