Northwestern Mutual is known for taking the kind of comprehensive approach to planning that starts somewhere in the womb and extends several incarnations into the future.
Steve Sperka, a vice president at the company, is looking at ways to protect clients’ ability to earn an income during this incarnation. The actuary directed the company’s disability benefits division for several years, then ran the company’s long-term care department, and now has come back into the disability unit.
He’s one of the executives who’s been out promoting the Disability Insurance Awareness Month (DIAM) consumer outreach campaign that’s now under way.
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Sperka said his main priority is bridging the age-old gap between the kind of protection workers should have and what they actually have.
“Penetration still remains pretty low,” Sperka said.
But Sperka has also given some thought to how the market for income protection products is changing, and the factors driving that change. For a look at some of what Sperka said about the market, read on.
1. Today’s workers are different.
Northwestern Mutual planners would like to help clients get ready to retire when they want to retire, but, in the real world, even for the planners’ clients, life happens. Clients get started planning late, lose jobs, run into unexpected expenses, and, these days, face low yields on the kinds of investment and savings products that appeal to people with a low tolerance for risk.
“For many people,” Sperka said, “their answer is working longer.”
Northwestern Mutual has found that about three-quarters of younger workers hope to work past age 65. Many of the company’s standard disability products can protect the ability to earn an income up to age 70.
Is Northwestern Mutual thinking about products that can protect workers ages 75 to 80? “Yes,” Sperka said. “Definitely.”
Northwestern Mutual is still studying the risk profile of older workers, but the general feeling is that today’s 65-year-olds are different from the 65-year-olds of 1995, Sperka said.