Despite signs of an economic recovery, many Americans are still not feeling financially secure. In fact, according to the eighth annual MetLife Study of Employee Benefit Trends, approximately 62 percent of full-time employees are very concerned about whether they would have enough money to pay bills during a period of sudden income loss.
However, many individuals do not have the appropriate amount of coverage to ensure that their family would be financially protected if the breadwinner were disabled. Here, producers have an ideal opportunity to educate clients about the important role that disability income insurance plays in a comprehensive financial plan for their family.
Educating the client
An individual’s ability to earn an income has been, and will likely continue to be, their most important asset. Despite this, Americans remain unfamiliar with the benefits of individual disability income protection. According to the new MetLife Study of the Emotional and Financial Impact of Disability, three in five individuals who have been out of work for at least six months because of a disability did not have any disability income insurance protection. According to the study, of those who did have coverage, only about one-third of their income, on average, was protected. This is probably insufficient for their needs since financial recovery among survey participants was slow — only 17 percent of those whose disability occurred at least a year ago felt that they had completely recovered financially.
Have you discussed your clients’ financial needs with them? In the event of a loss of income, will your clients be able to meet such financial obligations as mortgage payments, monthly bills, saving for retirement, and paying for their childrens’ education?
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Assessing potential coverage gaps
After you have examined your clients’ financial needs, review any coverage they may have in place through their employer.
Traditionally, employees look first to employers for disability protection. However, the amount of coverage they receive through these plans may not be enough to meet their needs.