Disability Insurance Protects Clients As Well As Advisors

If you have clients who are in their working years, you have a number of issues to discuss with them: investments, retirement planning, property/casualty coverage and other insurance products. However, if you are not already doing so, consider discussing disability insurance with clients — as they may not be aware how much a disabling event may affect them financially.

Although each client has different financial needs and obligations, one of the first questions to ask clients is “What is your most valuable asset?” Some may say it is a home or investment; however, their most valuable asset is the ability to work and earn a living. Without an income, it becomes hard to afford even regular living expenses.

In addition, think of the impact of the different product lines offered to clients if a disability causes them to stop working for an extended period of six months, two years or even the rest of their lives. It is important to note that the Council for Disability Awareness reports that the average individual disability claim lasts 34.6 months.

Consider the impact a disability could have on these types of clients:

• Investment clients.

Would they have to liquidate some or all of their investments if their emergency funds or savings ran out after a certain period of time? According to Life Happens, one in four employed Americans said they would feel the financial pinch immediately if they no longer had their paycheck.

• Retirement planning clients.

Would they have to dip into their retirement accounts to survive and provide for their families in the short term? How would that affect their plans? Can they continue growing their retirement account if they don’t have an income?

• Property/casualty clients.

If clients must sell their cars or lose their homes due to foreclosure, does that affect their need for home and auto insurance? More than half of all personal bankruptcies and mortgage foreclosures are a consequence of disability, according to LIMRA.

• Business owner clients.

What are the impacts to the business and group products if the business has to shut down due to an owner’s disability?

What Impact Would This Have On The Financial Professional?

These events have very real and negative consequences for clients and their families, but they also have negative consequences on financial professionals’ ability to further advise and service their existing business. Including disability insurance in their protection portfolio helps provide an income stream to clients if they suffer a disabling accident or illness. This may allow financial professionals to continue assisting clients with their investment portfolios, retirement planning, homeowners insurance, auto insurance, and other aspects of their financial and protection planning.

Actively selling disability insurance ensures protection for clients, as well as protection for the financial professional’s own portfolio! It can help clients continue paying their bills and providing for their families while allowing professionals to assist with other important products and planning — along with adding another revenue stream to their practice.

Disability insurance is a great place to start when looking to grow and protect a financial professional’s book of business in 2021!

Kenny Russell is director, disability sales, for the Disability Solution Center at Crump Life Insurance Services. He may be contacted at [email protected].

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