If you have put off having the income protection conservation with your clients there is not a better time than right now. So how do you start? After talking with successful brokers over the years I have found that most do not talk about funding, carriers, definitions or riders when they sell disability insurance. They simply ask a few questions that lead to a great discussion.
Question 1- Do you think you might become too sick or hurt to work?
Clients always answer this question, No. Most of us take our health for granted and no one really wants to think about becoming too sick or hurt to work. The truth is, about 1 in 4 of today’s 20-year-olds will suffer a disabling event sometime in their lives1 and most of us know someone currently dealing with cancer or another illness right now.
Question 2- Do you have a plan if you become too sick or hurt to work?
Some will answer that they have savings, some might talk about group coverage and some will mention Social Security. These are all good resources. However, they are not always the best plan.
The average American does not have 2 to 3 years of income in their savings account.
Group disability is a great benefit to have. Compliment your client for working with an employer that cares about them. However, these benefits are taxable and only replace a portion of income. Can your client live on 60 percent of their income, and lose part of that to taxes?
Social Security- Simple stated- It is difficult to qualify. The wait time is long, and the approval rate is only around 34-35 percent. After multiple applications and possibly hiring an attorney if you would get approval, the average benefit is $1,300 per month.2
Question 3- If you did become too sick or hurt to work and you needed help, who would be there?
Most clients will answer that they would be able to rely on family members for support: emotional, physical, and financial. This should prompt a follow-up question: Can you name 3 family members who are willing and able to pay your bills for more than a couple of months? The average individual disability claim lasts 31.6 months.3
Using these 3 questions will help your clients understand the need to protect their income and allow you to find them the solution with individual disability insurance.
1. https://www.ssa.gov/disabilityfacts/materials/pdf/factsheet.pdf
2. http://blog.disabilitycanhappen.org/the-basics-of-the-social-security-disability-income-program/
3. “U.S. Individual DI Risk Management Survey 2011,” based on claims closed in 2010
