The story is told of an insurance agent who one morning received a telephone call from the wife of his “best” client. The agent was a bit surprised — and concerned — because the caller ID information on his phone showed the call came from the local hospital.
If you have ever been in that situation, you know between the time the phone rings and the time you answer, you complete a mental inventory of the protections you’ve put in place with your client. Comprehensive major medical insurance: check. Life insurance: check. Estate plan: check.
You answer the phone, and she tells you there is good news, and there is bad news. You now allow yourself to exhale. The bad news is your client had a medical event that could have killed him. The good news is they got him to the hospital and treated him in time, and he is going to live. Everyone, yourself included, is relieved. Besides being a good client (and a great guy), he has three little kids and owns a business where 35 employees depend on him.
Just as you are beginning to relax a bit, Mrs. Client tells you the doctors have said while he will survive, he will never be able to work again. She says she isn’t worried, though, because with all of the fine work you’ve done for him, she knows that they have that insurance … what is it called? … that replaces his income in situations just like this. You tell her it is called disability insurance, and she asks how much monthly benefit they have.
If you are like many advisors, you know the end of this conversation, and it is not at all comfortable. When she asks why they aren’t covered for disability, you weakly reply, “He never asked.”
This is a very old story told to many newly minted insurance agents. I remembered that story this week because it has just happened to a great advisor who is a dear friend of mine. I’ve tried and tried, but he just wouldn’t add DI to his portfolio. Don’t be that guy.