For those of you who are already active in this market, much of what I will present here this month will be a “refresher.” To those of you who haven’t yet made the commitment to climb the learning curve, and position yourself to be a valued-added adviser to your clients on this important insurance solution, my comments may help you finally make the decision to do so. I hope so, anyway!
If I were sitting with a client an appointment, asking them the necessary questions to determine how best to assist them in protecting their most valuable asset, how would they respond? Is it their home? Family? Education and experience?
I would submit to them that it’s their ability to get up every morning and go out and earn an income. That ability is more valuable to the client and those who depend on them than any other asset. Why do I say this? Simply because if the time comes when they cannot get up and venture out to earn the income that supports their lifestyle, all of their other assets with eventually disappear. Their savings will be diminished, if not decimated. And their investment portfolios, which were intended to provide for a secure retirement, will be used to supply the basic needs of food and shelter.
Just as I never want to take the call from a surviving spouse asking me why I didn’t sell life insurance to their partner, I also do not ever plan to take the call from a client and have them ask me, “Why didn’t you tell me about disability income insurance?”
The likelihood of someone becoming disabled during their working lifetime is two to five times more likely than their likelihood of dying during the same period, depending on age. Whereas most people have at least considered purchasing life insurance, many people have never been approached with an offer to obtain disability income insurance (DI). Why is this? In my opinion, it’s because of a few myths.
Myth 1. DI is only for executives or those earning higher salaries.
Truth 1. DI is for any person, male or female, who earns a paycheck. Period. Some carriers focus their markets on the more preferred classifications, 5A-3A, but there are carriers who specialize in the “blue collar” and the “pink collar” markets and in the trades.
Myth 2. DI is expensive and most people can’t afford it.
Truth 2. For some, DI might be unaffordable, but for most working couples, it’s a coverage that needs to be made part of their family budget. If your clients think it’s hard to live on 100% of their take-home pay, have them imagine how it would be living on 50% to 60% of that same amount … or if they are single or the sole breadwinner for their family, 0%?
Myth 3. The client doesn’t need to buy their disability insurance—Social Security has disability included in it, and it’s paid for through their payroll taxes.
Truth 3. While it is true that Social Security does have a disability income component, SSDI, the qualifications for receiving SSDI are very stringent, and will benefit only those who are totally and permanently disabled. The vast majority of those who become disabled eventually recover, and return to meaningful employment. Even considering the income your client may or may not qualify for through social security, it is not going to replace the income you they be losing, so they’ll again be faced with the same questions as in Myth 2.
Myth 4. I have DI through work—I don’t need any personally owned DI.
Truth 4. If your client’s employer makes DI available through a group policy, that is great for them. However, ask them if they still work at the same place today as they did five years ago. And ask where they will be five years from today. Not only is group coverage not usually portable, if by chance they lose their job, they will lose their group benefits, including their Disability Income Insurance.
By purchasing a quality DI product that is coordinated with their group coverage and social security, they can minimize their expense and maximize their protection.
For those you who feel you would like to get additional information on this important insurance product, visit
In closing, as you learned in your first year in this business, carrying your own life and DI policy in your briefcase or portfolio will add strength to your convictions, and instill in your client a higher trust and confidence in you, as their advisor.
Kevin Lynch, CLU®, ChFC®, RHU®, REBC®, CASL®, CAP®, LUTCF, CFP®, is an assistant professor of insurance at The American College in Bryn Mawr, Pa. He also is the host of "Wealth Today," a featured presentation on
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