This year, Disability Insurance Awareness Month is more important than ever. As the United States emerges from the global pandemic, many Americans look to the future with less confidence about what to expect. We all saw the financial impacts of the pandemic and how unanticipated events can affect one's plans and financial security. While no one has a crystal ball to predict the future, you can give your clients the tools to protect themselves in the face of the unexpected.
Disability Insurance Awareness Month promotes the importance of income protection and the ways that disability insurance can help. There are a few types of disability insurance. Short term disability insurance is usually offered through the workplace and pays benefits when someone is unable to work for several weeks or months due to a disability. Long term disability insurance (LTD) pays benefits if that person can't work for a longer period of time. But what if the LTD insurance doesn't cover enough of your client's income, which can be common for high earners? Individual disability insurance (IDI) provides an extra layer of insurance to cover longer absences from work due to a disability. And if an employer doesn't provide LTD insurance at all, IDI can take its place for the employee. In either scenario, IDI can help bridge the income protection gap.
How IDI works
IDI is a safety net that can provide peace of mind during uncertain times. Individual disability insurance — sometimes called income protection insurance — pays monthly benefits to replace lost income if the policyowner is unable to work for an extended period of time due to a sickness or injury. It can provide a comprehensive and flexible range of benefits.
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Most IDI policies start with a total disability benefit that pays monthly benefits when insured individuals can't work at all due to disability. Then employees can choose additional provisions to protect their income in a variety of situations. For example, most insurance carriers offer benefits when policy owners are disabled but can still work, but not full time or at full capacity. Some carriers offer student loan coverage that will reimburse employees for their student loan payments when disabled. Others offer benefits if policy owners lose income due to taking time from work to care for a family member with a serious health condition.
Then they can choose from several options to tailor the policy to meet their budget needs. For example, they can choose a monthly benefit amount, a waiting period for receiving benefits and the maximum amount of time they'd receive benefits.
Starting the conversation
You don't need to be an expert to help your clients plan for the future with IDI. Show your clients why IDI is so important and then you can partner with an IDI specialist to craft a policy that meets the individual's needs. Disability — and the resulting income loss — is much more common than many people believe. One in four American workers are expected to suffer a disability before retirement age.1
Tips to pivoting to IDI
Not sure where to start? You can begin with the topic you know best and then pivot the conversation. Here are some IDI conversation starters to transition to income protection.
If they have showed interest in life insurance, you could say, "Congratulations on getting this life insurance. If something happens and you're not able to provide for your family, they'll still have a source of income. But what if you get seriously sick or injured and survive? You may not be able to work for years. It's not enough to just insure your life, we need to insure your income, too." Here's another option: "The best financial plan is only as good as your income. Before we take another step, let's make sure your income will continue, even if you get sick or hurt and can't work."
Leveraging available tools and resources
Once you have begun the IDI conversation, help your clients determine how much coverage they need. There are plenty of accessible and practical IDI tools to support this step that offer an income protection insurance calculator for clients to evaluate their current LTD insurance or determine how much individual disability insurance they might need.
Social media is also a useful channel to connect with and educate clients on the value of IDI. Helpful posts introducing IDI and explaining its benefits may result in more in-depth conversations offline. If you are looking for ways to connect about IDI over social media, there are a number of free online resources to help get you started.
Now is the perfect time
This Disability Insurance Awareness Month, let employees know that even though they can't predict the future, they can prepare for it. IDI makes sure that they'll receive steady income in the form of monthly benefits even if they can't work due to an unexpected injury or sickness. Ensuring that their income is protected can provide peace of mind in the face of uncertainty.
As second vice president IDI sales, Jill Frohardt leads the sales of individual disability insurance, both sold to individual consumers and through the workplace on a guaranteed standard issue basis.
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