Many workers have little understanding of the likelihood of experiencing a disability. A recent Council for Disability Awareness survey of workers found:
- 90 percent underestimate their own chances of becoming disabled.
- 85 percent express little or no concern that they might suffer a disability lasting three months or longer.
- 56 percent do not realize that the chances of becoming disabled have risen over the past five years.
Yet, the probability of a white-collar worker becoming disabled for 90 days or longer between the ages of 35 and 65 is 27% for men and 31% for women.
Here are 3 reasons you should continue to talk to your clients about income protection:
1) Most Americans cannot afford to be too sick or injured to work:
- Over 70% of working Americans do not have enough savings to meet short-term emergencies.
- Over 50% of the workforce has no private pension coverage and a third have no retirement savings.
- 71% of American employees live from paycheck to paycheck.
- Only 40% of adult Americans have separate emergency savings funds.
- More than 35% of workers with 401(k) or IRA plans have not thought about or don’t know what would happen to their contributions if they were unable to earn an income for a period of time.
2) Common back-up plans are often not an option
- Nearly three-fourths of disabling injuries are not work related, and therefore not covered by workers’ compensation.
- Less than half – 35% – of the 2.8 million workers who applied for Social Security Disability Insurance (SSDI) benefits in 2009 were approved.
- The average monthly SSDI benefit is $1,064.
- In 2007, the percentage of working-age people with disabilities receiving SSDI payments in the US was 17.1%.
- Over 6.8 million workers are receiving SSDI benefits, almost half are under age 50. This represents only 13% of the over 51 million Americans classified as disabled.
3).There is a market opportunity for income protection
- 43% of employees indicated protecting financial assets due to an unexpected event as a main concern.
- Fewer than one in three (29%) U.S. workers have private long-term disability coverage.
- 70% of the private sector workforce has no long-term disability insurance. – Social Security Administration, Fact Sheet 2007
- Only 30% of American workers in private industry currently have access to employer-sponsored long-term disability insurance coverage.
- The odds of selling a product to a new customer are 15 percent, while the odds of selling to an existing customer are 50 percent.
- Despite the fact that more than 70% of American households rely on two incomes to make ends meet, only 26% of Americans have any type of disability insurance.
- Only 13% of small business owners have disability income insurance.
There is plenty of opportunity to market disability income protection. Yet, only 18% of consumers recall being approached about buying disability insurance – less than half as many as those being approached for life insurance. In fact, the top reason producers give for not selling disability income is there clients don’t ask about the product.
Take the lead and open the disability income protection conversation with your clients.
An effective client conversation puts the client in control by framing the purpose of DI in the big picture of their financial planning, and helps them see the advantages of adding DI as part of their overall income protection.