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March 29, 2007 at 04:00 PM
Up until a few decades ago, any producer would have been hard pressed to convince baby boomers that they weren’t invincible. However, now that many boomers have come to the realization that they do indeed have a limited time on this earth, it’s still an uphill battle for insurance professionals to communicate the real need for disability insurance.
The fact is, according to a 2007 study by the Council for Disability Awareness, Portland, Maine, more than 80% of workers believe their chances of becoming disabled are far lower than actual statistics report. At the same time, the number of disabled workers in America has risen 35% since 2000.
So how do you bridge the gap between boomers’ perceptions and the reality? Suggest a disability income rider on a life insurance policy.
DI riders are for consumers who want to protect themselves against the loss of income as well as against the loss of life. The value of the DI rider is that, in most cases, coverage can be added with no additional medical underwriting, making it easy for the customer to obtain coverage, which can be a powerful business retention tool for advisors.
Disability coverage is an essential part of any financial plan. However, as shown in LIMRA’s 2004 U.S. Buyers and Non-Buyers of Individual Disability Insurance report, there are 2 major factors keeping individuals away from purchasing–or at least purchasing outright–traditional disability coverage: the product’s complexity and its expense.
Even when the DI rider was introduced several years back, a downside existed: Benefits were more limited than that of a traditional disability insurance policy. Additionally, the candidate had to answer more questions in order to qualify.
Today’s DI riders are greatly simplified, more affordable and more robust.
1. Competition has driven many carriers to bring innovative new features and benefits to their disability insurance portfolio. As a result, agents who do their homework can choose a rider with the clearest language, the least limitations, the greatest benefit and also the most flexible products, enabling them to provide clients with truly customizable solutions.
2. New products, like return-of-premium term life insurance, become even more attractive, as does the DI rider option, when consumers learn that both the premiums for the ROP term policy and the disability rider itself are refundable if neither is used during the life of the policy.
3. Another factor that has helped the increase in popularity of DI riders is their expanded availability. More and more traditional life insurance policies include a DI rider option.
