As insurance producers, we have a skewed view of the importance of insurance. We see firsthand what happens to families and businesses when they are – and aren’t – properly insured. To us, the importance of proper disability insurance coverage seems obvious. People have so much to lose if they become sick or injured and cannot work. Why, then, is it so difficult to convey this point to others? And why do so many people fail to protect their income?
The statistics are staggering: People are much more likely to file a disability claim than a claim for just about any other type of risk. And the potential loss is greater than any other assets that people hold. Yet people still object to or overlook the importance of properly protecting their income.
As an insurance producer, it is important to convey this message to other professionals who work with our clients. Sometimes, if our clients are advised to protect themselves from a non-insurance professional, they are more likely to pursue it.
Here are some of the professionals who may have an influence on our clients’ decision to obtain disability insurance.
- Certified public accountants. People often look to their CPA as a critical advisor. As insurance professionals, it is important that we work with CPAs and remind them of the importance of protecting their client’s income. If a client becomes disabled, taxes would still be due.
- Estate planning attorneys. These attorneys typically advise clients to purchase a life insurance policy to protect their assets, fund trusts and minimize taxes at death. However, it is also important that their clients’ income is protected in order to maintain the integrity and value of the trusts and assets that constitute the estate, and which a disability may otherwise deplete.
- Property and casualty agents. P&C agents do a great job helping clients protect their tangible assets. Some agents also help them with their life insurance. But most P&C agents I have come across do not focus on disability insurance for their clients. By educating these people, they are more likely to refer this business to you.
- Family law attorneys. Many prudent family law attorneys require as part of divorce settlements or agreements that the income-producing spouse take out life insurance to be able to maintain the divorce agreement. This also ensures that alimony payments and child support payments will stay intact if that person dies. However, most family law attorneys overlook the potential devastation of a disabling illness or injury and a consequent loss of income, as these obligations would still need to be fulfilled. Educating these attorneys and reminding them about the importance of disability insurance can help their clients further protect themselves at an important time in their life.
- Bankers and mortgage brokers. Statistically speaking, 48 percent of mortgage foreclosures are due to disabilities. This is because most people don’t have enough savings to sustain themselves for a long period of time without a paycheck. It is interesting that mortgage brokers require homeowner’s insurance to protect the home, but not disability insurance to protect the income that services the loan. Some banks require their clients to purchase a disability policy when they apply for a business loan and assign the proceeds to the bank. If someone applies for a loan and their banker or mortgage broker suggests that he or she protect it with a disability policy, the person may be more likely to take action.
- Fee-only financial planners. A competent financial planner will look at their client’s overall plan and recommend that the client purchase a disability policy when necessary. It’s important to stay on the radar of these financial planners to remind them of the importance of doing this.
The LIFE Foundation has provided some fantastic tools for selling disability insurance. Take a look at these tools, and meet with other professionals in your community to educate them about the importance of disability insurance. The statistics are profound, and it’s hard to argue that it wouldn’t be prudent for our clients to be properly protected. Partnering with others can also lead to a fruitful source of referrals for new disability insurance sales — so get out there.
Jamie K. Fleischner is president of Set for Life Insurance, a nationally recognized insurance brokerage specializing in helping professionals with their disability insurance needs. For more information, visit www.setforlifeinsurance.com.