When it comes to disability insurance, women pay approximately 40 percent more than their male counterparts. Why? One word: claims. Rates are derived from claims experience and women tend to be disabled 40 percent more often than men.
The opposite is true for life insurance. Women live longer and pay less for their life insurance premiums.
So if you are working with women in the market to purchase disability insurance, what can you do to try to reduce the premiums?
Prioritize. If your client is on a tight budget, find out what is most important to them.
- Could they get by with a lower benefit now and increase it later?
- Do they need a true “own occupation” definition of disability?
- Would a guarantee renewable policy be sufficient?
- Is it critical to have a COLA rider at this time?
- Could they get by with a shorter benefit period?
Look for discounts. The most significant type of discount is an employer-sponsored discount that provides unisex rates. Unisex rates alone will reduce female rates by approximately 35-40 percent. Add another 20 percent for employer-sponsored rates and your clients will save significantly. Each company has different requirements to set up the discounts. Companies typically require 3-5 people from the same employer to apply for the policy simultaneously in order to qualify for the discounts. You can also work with associations to incorporate discounts that can help save.
Examine other insurance costs. Since women pay less for life insurance and premiums vary from company to company, evaluate if your client is overpaying for life insurance. By reducing their life insurance premiums, you may be able to free up some money in the budget for disability insurance.
Emphasize the need. There is a reason women pay more for disability insurance. They are much more likely to file a claim before age 65. It is important to educate your female clients that they are at a greater risk for becoming disabled — which makes income protection even more critical.
Jamie K. Fleischner, CLU, ChFC, LUTCF is President of Set for Life Insurance, a nationally recognized disability insurance brokerage. For more information, visit www.setforlifeinsurance.com