For many years the number of agents who regularly discuss disability income protection with their clients has diminished. Around medical universities there are usually a cluster of financial representatives who work with graduating professionals, but the numbers generally thin dramatically the further away you travel.
One of the reasons many shy away from disability is that there appear to be a lot of moving parts and on the surface it appears confusing. The actual duties a person performs determines the rate used to determine the premium. A company president who operates heavy equipment obviously has a more hazardous job and is more likely to be injured than one who sits behind a desk.
Also, whereas life insurance rates are based on mortality, disability rates are based on morbidity. With life insurance, if you’re still breathing no benefit is paid. Disability insurance on the other hand pays a benefit when you are sick or injured and can’t work. There are many things that may keep you from working that wouldn’t threaten your life or impact your longevity.
Other factors swirling around in the income protection decision cycle are the waiting period before benefits begin to be paid, the length of the benefit stream, the definition of total disability, and whether the premiums are permanently locked in or may potentially vary based on claim losses. There are other features and riders that may be added to the policies, usually adding to the cost.
That certainly is quite a lot to consider when determining what is both appropriate and cost effective for the client. However, over time the various components begin to make sense and fall into place. In addition, learning the basics is easily accomplished if someone new to the scene brings in an experienced agent to help.
I routinely get calls to assist other agents who are older and have been in the industry longer than me who need help providing income protection for their clients. In other cases I get referrals to high income prospects because so few others are able to assist.