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February 26, 2004 at 07:00 PM
Agents Need To Penetrate The Fog Of DI Design
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In Errol Morris acclaimed film documentary “The Fog of War,” former defense secretary Robert McNamara talks about the inherent difficulty of making decisions about a war that is thousands of miles away. War is so “utterly complex,” he says, that seeing all of the fundamental pieces is like navigating through a fog.
As a result, key elements of information necessary to make the right decision will be hidden from view, leading to erroneous choices being made. Wartime mistakes cost lives. What do financial mistakes cost?
Lets say an advisor is working with a client through the fog of financial planning. Its a large playing field, with many variables to consider. Needs are addressed. The advisor uses the 401(k), life insurance, health insurance and mutual funds as planning solutions. But one element remains hidden from view. This is the individuals ability to generate the income that pays for all this planning.
Lets say a disability occurs later that prevents this individual from working. Income grinds to a haltand so does the plan. Money is a luxury now; the client uses it for key expenses like mortgage payments, but the amount available may or may not be enough. Soon, livesand standards of livingare altered. All of this is preventable, but the client and the advisor have to see it from the beginning, not lose it in the mist.
Why does disabilityand its solution of disability income insuranceoften get lost in the murky haze of planning? Disability insurance is, in its own way, “utterly complex,” too. While the need is easily recognizable if explained, the product itself contains a multitude of moving parts that easily can confuse an agent or prospect, or both.Occupational classifications are based on job duties, type of field, white- or blue-collar responsibilities, business ownership, years on the job, number of employees and, sometimes, income.
