I have been in the insurance business more than 30 years.
In the early days of my career, the company that I worked for as a representative (it was one of the major players in the DI business at that time) actually paid their claims out of their respective branch offices.
If there was a question about the validity of the claim—not often—then the home office would send its own claim investigator to validate the claim.
Do I believe in disability insurance? Yes, I believe it (along with life insurance) to be the most overlooked and most important insurance for a young working person.
In the first week of my career, I went out with a producer who had a 37-year-old client making $375,000—a very nice income for someone in the 1970s.
The client was an orthodontist in an affluent suburb of Minneapolis. Seven months later, he was removing snow from his roof, slipped and fell off, and suffered a career-ending wrist injury.
This story did have a happy ending. While the client received around $8,000 per month from his insurance policy (compounding at a much higher interest rate that is being offered today), he later became a founding partner of a medical services company where he made millions.
His disability income policy also paid him a couple of million dollars.
All disability claims do not have this type of nice ending, but this client’s policy allowed him to change gears after years of education and training for a specific profession and to transition into a successful business career.
The most memorable claim that I was a small part of was a divorced 45-year St. Paul school teacher.
She did not have group long-term disability (LTD) through her school district .
She purchased a $500-per-month benefit. Unfortunately shortly after getting her DI policy, she developed an inoperable brain tumor. Along with her advisor, we delivered her first claim check to her in person. With tears in her eyes she told us this amount of money would keep her in her home for as long as possible.
She died 13 months later, but her children could receive the equity of her home, not the bank or the state. It proved to me that it isn’t the size of the disability contract that mattered—just that something is better than nothing.
In another case, a 40-year-old female, who was her insurance company’s “rookie of the year” suffered a career-ending mental condition.
A 54-year-old opthalmic surgeon, closing up an eye surgery, turned to his nurse and said, “I can’t remember what to do next.” (Early onset Alzheimers.)
A 58-year-old family physician left his established practice, started his own practice, bought his first DI contract—and had a career-ending stroke two months later.
A Lutheran pastor purchased a DI policy the week before Christmas. (The producer was a really quality person; he actually picked up the check when the app was taken.) The pastor slipped on a sidewalk, hit his head and had a life-threatening brain injury on Christmas Eve. His recovery took many months.
These are all real claims that I had a small part in—either getting the claim paid or in the actual sales process. Bad things happen to good people.
As financial professionals, we have an obligation to make sure that while the physicians deal with the medical issues, we help clients with the equally important financial issues.
When you are conversing with your clients, just ask them, “For my records, who is your disability income with.”
Many times your client will say, “I don’t have any.”
It’s that easy. If they truly don’t have some coverage, you have a great opportunity to help them protect their income and their lifestyle.