Nearly one in four of today’s 20-year-olds will be disabled by the time they reach retirement. Photo: Getty Images.

There’s a perception that disability income (DI) insurance can be a difficult sell. But with the right strategy and tools, selling DI can be very profitable and can also ensure the ongoing financial security of your clients – in this case, attorneys. Here’s why.

As more and more Americans are living paycheck to paycheck, attorneys continue to be hugely dependent on steady income, especially those who are self-employed and only get paid when they work. In fact, over a lifetime, attorneys on average earn almost $3.6 million plus bonuses, according to statistics from the Council for Disability Awareness, which means their ability to stay healthy and earn an income throughout their lives is their greatest asset. 

In the case of attorneys, it often makes sense for them to have group disability insurance supplemented with individual policies.Below are some key insights and strategies related to the legal industry:

Who are they? Attorneys are responsible for applying the law to their client-specific situations and counseling the best course of action. Working in business or providing legal counsel to individuals, they often specialize in a specific industry, such as family, tax, bankruptcy or business law. 

As with many industries, attorneys are steadily under more and more pressure as they work longer hours due to the time sensitivity of their work. There is also an oversupply of qualified attorneys in the U.S., leading to significant competition for jobs and a decrease in new associates’ pay. 

On average, experienced attorneys earn over $110,000 annual income, according to Payscale, and the Wall Street Journal recently reported they often have over $121,000 in student loan debt repayments, indicating significant financial obligation and consequences if they are unable to make their loan repayments.

The legal industry itself is expected to have steady job growth, with an average of 10 percent over the next 10 years according to the Bureau of Labor Statistics, especially in the practice areas of litigation, commercial law healthcare, intellectual property and real estate.  Additionally, as they gain experience, their disposable income increases dramatically, making the cost of DI more accessible.

The legal industry is fiercely competitive, and should your client need to leave work due to illness, he or she may find re-entry into the work force challenging, especially those who are self-employed. Additionally, the U.S. Individual DI Risk Management Survey conducted by Gen Re found the average individual disability claim lasts 31.6 months, and there’s a 38 percent chance that a disability claim can last five years or longer, according to the Council for Disability Awareness. So you can ask your client: Do you have enough income to cover your expenses for a minimum of three months? For attorneys earning $100,000, that’s $25,000 in savings they need to have set aside for a rainy day. Imagine the financial consequences for those on the higher end of the scale earning $124,000 plus. 

What do they need to know? Many people don’t think about disability insurance when they think about insurance policies, and when they do, they associate it with accident claims. In reality, only 10 percent of disabilities are caused by accidents. Most are not work-related, and therefore not covered by workers’ compensation. 

They need to know DI is not as optional as they may think. While it doesn’t seem that attorneys should be at high risk for disability, a whopping 90 percent of disability claims, for those in their prime working years, are for illness or disease. The top claims for DI include illnesses such as cancer, heart attack, diabetes and depression. Back pain and arthritis are also significant disability causes. 

None of us plan to become disabled, but the sobering reality is that nearly one in four of today’s 20-year-olds will be disabled by the time they reach retirement, according to the U.S. Social Security Administration. This means that if your client has a partner, there is a 50 percent chance that one of them will be disabled by the time they reach retirement. 

Why supplement with individual DI? Group coverage often isn’t enough. Group plans often have a benefits cap, lowering the total money your clients would receive. Plus, if an employer pays the premiums, benefits are usually taxed. Salary is typically the only income covered by group long-term disability, as other remuneration (such as bonuses, commissions, and incentives) is usually not covered. The financial loss that can result from a disability requiring your client to leave work can be devastating. According to a 2010 study by the Council for Disability Awareness, 65 percent of working Americans said they could not cover normal living expenses for even a year if their employment income was lost, and 38 percent said they could not pay their bills for more than three months. 

Here are the key facts your clients need to know: 

  • An individual disability insurance policy can help replace income that is lost due to illness or injury.

  • There are additional options to protect key bills, including student loan debts and retirement contributions.

  • The earlier they purchase their policy, the lower their policy cost.

  • Buying now, rather than later, allows them to lock in their insurable health. Pre-existing conditions could result in a modified offer or disqualify a client from individual disability coverage.

  • Some policies are non-cancellable and guaranteed renewable, meaning that the policy cannot be changed or cancelled as long as premiums are paid.

  • Most importantly, your client owns the policy. So no matter where they work or who they work for, their disability policy can stay with them. 

Where are they? To locate new attorney clients, use centers of influence to find them – local clubs, civic groups, alumni publications and associations. 

Use advanced searches on LinkedIn by occupation and location. Use a business database such as Hoovers, Better Business Bureau, ZoomInfo or ReferenceUSA and filter by geography and business type. 

And don’t forget your existing book of business. 

How do you prepare? 

Make sure you know your facts, have visual aids like marketing pieces to help emphasize your point.  An illustration is helpful too.  They like to see the numbers and know the facts in detail. Use real life examples.  Most people can think of someone they know who had cancer or a heart attack. Tell their story. 

How do you engage them? Disability income insurance is not a luxury. It is a critical part of any insurance/financial plan. Encourage your clients to use online tools to learn more about cost expectations and protection benefits.

And start with this key question: “What if you lost your biggest financial asset, your ability to work?” Talk the scenario through with them. If the average person is off work for a minimum of three months for disability, what’s his or her emergency strategy? It will set the tone of your discussion and allow your client to start planning strategically for the future.