The national dialogue about working women over the past two years has focused on how women can climb the corporate ladder while supporting their families.
The conversation has been productive, encouraging women to continue making inroads in their careers and advocating for support, but it has overlooked a crucial discussion topic: how they’re protecting their income.
Fostering a conversation about income protection
Today, in many households across the country, women have added another role to a list that also may include mother or wife — breadwinner. Four in 10 households with children under age 18 have a woman as the sole or primary wage earner, a recent study released by Pew Research Center found.
What this statistic doesn’t show is that many of these women who are keeping their families afloat financially might not have the proper financial safety net in place should something unexpected happen to them.
And that’s where you can help. May is Disability Insurance Awareness Month, which is a great time to check in with clients as you prepare for summer enrollment meetings. As you do this, consider how you can position ancillary products, such as disability insurance, as income protection and a crucial piece of financial planning.
A limited safety net
No matter the age of female employees in your client’s workforce, there’s a great likelihood that many are spread thin financially.
According to the U.S. Department of Labor, 74 percent of single mothers with children under age 18 were working in 2013, as were 67 percent of married mothers with children under 18. However, many women in today’s workforce, especially those in the sandwich generation of baby boomers and Generation X, are becoming increasingly responsible for their aging parents. Consider a recent study which found that one in seven middle-aged adults (15 percent) is providing financial support to both an aging parent and a child.
In addition to playing a larger role in supporting their families, many women in the millennial generation are putting money that could go to their savings toward student loans. The average debt for graduates of public or private colleges in 2013 was $28,400.
In your enrollment meetings, it’s important to help employees understand that having an income doesn’t necessarily mean a family is protected if a breadwinner were to face a disabling condition. Employees need to understand that, without disability insurance, their savings will need to cover financial gaps as well as everyday living expenses if they’re unable to work. However, as 68 percent of Americans say they have no savings earmarked for emergencies, this may not be a viable option.
Overcoming common disability misconceptions
In addition to relying on limited or modest savings, many women may believe a disability can’t happen to them. Part of your enrollment strategy should be to help educate them about the chances of disability. Here are some common misconceptions to raise in your enrollment meetings.
“It can’t happen to me.”
The Council for Disability Awareness (CDA) found that 64 percent of wage earners believe they have a 2 percent or less chance of being disabled for three months or more during their working career. However, for a worker entering the workforce today, the actual likelihood of becoming disabled is about 25 percent.
What’s more, a woman age 35 faces the following risks:
A 24 percent chance of becoming disabled for three months or longer during her working career
A 38 percent chance that the disability would last five years or longer
The likelihood that a disability could last up to 82 months (nearly seven years), which is the average disability for someone like her
“Disability insurance will help me only if I’m seriously hurt.”
What your client’s employees might not know is approximately 90 percent of disabilities are caused by illnesses rather than accidents. The following were the leading causes of new disability claims in 2013, according to the CDA’s 2014 Long Term Disability Claims Review:
Musculoskeletal/connective tissue disorders (28.6 percent)
Cancer (15.1 percent)
Injuries and poisoning (10.3 percent)
Mental disorders (8.3 percent)
Cardiovascular/circulatory disorders (8.7 percent)
“My health insurance will help cover me if I have a severe illness.”
Some employees may think their health insurance can provide a safety net should they incur a serious illness or injury. But many don’t think of how they’ll pay for essentials — food, rent or a mortgage, car payments — if they are off work and not earning an income. In enrollment meetings, showcase how disability benefits are the income stream an employee will rely on if she is out of work.
Making the case for electing disability insurance
As employers offer benefits on a voluntary basis, it’s important they provide opportunities to educate employees about the reasons to choose them. Voluntary benefit choices allow employees to pick benefits that fit their family and lifestyle. If those helping with enrollment, such as a carrier or enrollment firm, don’t communicate the need for these benefits and how they might help protect employees’ families, employees might not elect them.
Before going into an enrollment meeting with clients, some preparation can help. Get a breakdown of women and men in their workforce and, if you can, their ages. This can help you position the need for income protection and also tailor presentations with examples that speak directly to the audience.
Consider examples of how disability insurance can continue to cover costs associated with child care for young children, or, if the demographic is older, college tuition or assisted living care for aging parents.
For one-on-one meetings with family breadwinners, start the conversation by asking, “How would your family help make ends meet without your income?” This question can prompt discussions about disability insurance, as you can discuss how far their savings would go to cover necessities such as mortgage payments, tuition, loan payments and even groceries.
From there, ask additional probing questions, such as:
What gaps, if any, do you perceive in your family’s overall protection, well-being and peace of mind? This can help define “must have” versus “like to have” risk protection. From here, you can focus on the proper risk protection to cover the situation — for example, disability insurance rather than additional life insurance.
What is your medical plan deductible? By analyzing their current medical plan, you can offer strategic counsel regarding gaps in coverage and how to prepare to close those gaps.
Have you thought about the costs you would incur without a paycheck? This will help them understand how much coverage they will need to cover essential costs if they are out of work due to a disability.
These are some ways to help your clients better serve female employees. Not only will connecting with this historically underinsured demographic help you build your existing business, it will help position your clients as supportive employers. Many employees will be thankful their employer is helping to protect their future by pointing out this vulnerability.