Often, and especially if they are young, your clients haven’t thought about the possibility of not being able to work. It’s natural. But no matter what stage of life they’re in, nearly every plan starts with the same thing: income.I hear the same phrase daily: “I’m mostly a life producer. I rarely sell Disability insurance (DI).“
DI products are complex, but the conversation can be easy. Start by asking questions that will get clients thinking about their plans.
The hardest part of the DI conversation isn’t the products. Or prices. It’s getting started. If you’ve put off having the talk with your clients, it’s likely because you’re not sure how to break the ice.
Most clients will say no. People are typically unable to fathom the idea that they will ever not be able to work. The truth is, about 1 in 4 of today’s 20-year-olds will suffer a disabling event1 sometime in their lives.Whether or not clients believe the stat is irrelevant. You’re their advocate to create financial protection, to protect their future. If you gave them a 25% chance of running out of money, you’d probably find yourself with one less client. How is the chance of having a reduced paycheck any different? Or worse, no paycheck at all.
Some clients will answer that they have savings. Some will reference their employer’s group plan. Most will mention Social Security. While these are all great resources to utilize, they aren’t always a great fall-back plan.
And while group disability is a great benefit to have, it isn’t guaranteed. Those benefits are also taxable and only replace a portion of your income.
Can your clients sustain their way of living on 60% of their income and lose part of that to taxes?
As for Social Security Disability Insurance — it’s difficult to qualify. And that’s a huge understatement. The wait time is long. After multiple applications and possibly hiring an attorney, the approval rate is only around 35%. If you do finally gain approval, the average benefit is $1,300 per month2.
Most individuals will find it very difficult to sustain their quality of life on this benefit alone. Your clients would benefit from having a plan. Even if they choose not to insure, at least they know what to expect.
A common thought, especially for younger individuals, is they will be able to rely on family members for support: emotionally, physically and most importantly, financially. This should prompt a follow-up question: Can you name three family members who are willing and able to pay your bills for more than a couple of months?
And even if they have people or could help, wouldn’t it be better if they didn’t need to?
You don’t have to talk about funding. Or insurance plans, for that matter. All you need to do is make them see the importance of planning so you can head down that path — together.
Does your client know anyone who has been disabled and unable to work due to a sickness or accident? Even for a short time? Talk about the impact it had on their family.
If they are married, can their family sustain their current quality of life with just one income? And if they do, are they willing to sacrifice any built-up savings or dip into their retirement account? It’s real money — hard-earned money — that’s on the table. Suddenly, a small investment in protection may seem well worth it.
Often, and especially if they are young, your clients haven’t thought about the possibility of not being able to work. It’s natural. But no matter what stage of life they’re in, nearly every plan starts with the same thing: income.
We never think it will be our income that will be interrupted — until it’s too late. Get your clients to picture that it could happen and the effects if it did. Seeing the impact is the first step to getting them to recognize their need for coverage.
You don’t have to have all the answers. You just need to ask the right questions. For even more help, ask about Palladium Group’s opportunity finder and conversation starter, 5 Simple Steps to Talk About DI.
Your clients have worked hard to build their financial future (and so did you). But once it’s gone, it’s too late. It’s our job to make sure that everything works when your clients can’t. To make sure their foundation is protected.
Don’t end the conversation before checking the last box. Learn more about how your Palladium Group team can partner with you to learn which disability income policy is the right solution for your clients — to create a solid financial foundation for paychecks, made possible.
*This material is for Financial Producer and educational use only. Not to be reproduced or shown to clients.