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Life Health > Health Insurance

The Disability Insurance Opportunity

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What You Need to Know

  • Roughly one-quarter of today's 20-year-olds could need disability benefits at some point.
  • About 54% of Americans have life insurance.
  • Only 14% have private disability insurance.

According to the Social Security Administration, 1 in 4 of today’s 20-year-olds will become disabled during their career.

Statistically-speaking, people are more likely to become disabled than they are to die before retirement.

Nonetheless, just 14% of Americans own disability insurance compared to the 54% that own life insurance.

Disability insurance: Useful, yet undersold.

It’s an untapped opportunity for insurance agents and brokers.

Here are several more reasons why you should consider adding disability insurance to your product arsenal.

1. Technology

The underwriting and application process for disability insurance had always been a disaster.

It’s one of the main reasons income protection has remained untapped.

Not many products had a more dire need than disability insurance to be swept up by the insurtech wave.

With so many unique occupational factors to consider in the underwriting process, applying for disability insurance was terribly clunky and usually took months. This is especially true for 1099s and freelancers, who have a more difficult time predicting their regular income.

Disability insurance was simply not worth the time so both consumers and agents stayed away.

But insurtechs and their use of predictive analytics to expedite and digitize underwriting no longer makes a clunky process a valid excuse.

Technology has finally caught up to disability insurance. Insurtechs like Breeze have reduced quoting to seconds and applying to minutes.

It’s also available entirely online.

In addition to having a D2C side of the business, most of these turnkey insurtech platforms are primarily designed to be used by agents and brokers who want to efficiently scale a new product vertical and manage it all in one place.

Finally modernized for today’s consumer, there’s no better time for insurance professionals to start selling disability insurance.

2. The Chance to Cross-Sell

Disability insurance represents one of the more sensible cross-selling opportunities for agents and brokers.

There’s long-term disability insurance and short-term disability insurance, but the two can go hand-in-hand for the right consumer.

Long-term coverage often carries a waiting period of around 90 days, which can be too long for some folks who need a regular flow of paychecks to keep up with life’s expenses.

Short-term disability insurance can have a waiting period of just seven days. Sometimes, it’s even shorter than that.

If your client has both and suffers a qualifying disability, they can start receiving benefits fairly quickly with short-term disability insurance. This replacement income can keep them financially afloat until long-term benefits kick in.

It’s a strong cross-sell pitch for agents and brokers and just another reason to add disability insurance to their arsenal.

3. Paid Leave Options

Just 19% of US employees have access to paid leave through their employer. The US is the only developed country without a federal paid leave policy,

Five states and Puerto Rico require employers to offer short-term disability insurance.

The reality for most Americans is that Social Security Disability Insurance (SSDI) is the only safety net against disability. And with this federal program, 67% of claims are denied. Usually the threshold for qualifying for SSDI is that the disability must last 12 months or is expected to result in death.

Workers’ compensation isn’t a fully viable option either as that program requires the disability to happen on the job.

Americans have few to no options to protect themselves and their loved ones against disability and income loss. Disability insurance is likely the best bet for most consumers in this country, and this makes it an excellent opportunity for agents.

4. The Definition of Disability

Another reason disability insurance sales have lagged for years is because the coverage is not fully understood by consumers and sometimes even agents.

When people think disability, the initial thought is usually physical injuries. Things like broken hands or broken legs.

And while disability insurance does in fact cover physical injuries, it also covers medical illnesses and mental health struggles.

Things like cancer, digestive disorders, depression, anxiety, and pregnancies are amongst the most commonly-cited reasons for disability insurance claims.

In fact, the Council of Disability Awareness found 90% of long-term disabilities are the result of illnesses rather than accidents.

Helping your clients comprehend the full extent of disability insurance coverage could help make it an easier sell.

Justin Gibson (Photo: Breeze) Justin Gibson is a wholesaler at Breeze, an insurtech simplifying how disability insurance is bought and sold.





(Photo: Adobe)


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