Selling Disability Insurance?

In the Blink of an Eye, Disability Happens:
A Personal Story about the Importance of Disability Income Protection.

Much like you, W.T. Ty Kailey, CLU, CIC, LUTCF, is an insurance agent. Twenty years ago, he had a thriving career as the life/health professional for a property casualty company with five agencies. When he wasn't working, he was active in a men's competitive basketball league and he enjoyed a second career as a top caliber youth baseball umpire. In fact, he even umpired three American Legion World Series and 11 Regionals. In Ty's words, "Life was good. I felt pretty invincible."

Early in Ty's career a mentor told him, "If you want to sell life insurance, buy a life insurance policy for yourself. If you want to sell disability insurance, buy a disability income policy for yourself. You can't sell something you don't believe in." Ty dutifully followed those instructions knowing he believed in his products, but he seriously doubted he'd use them anytime soon. He had no idea that just seven years later his belief in disability insurance would climb to a whole new level.

One June afternoon the unthinkable occurred. Ty was taking a break from insurance sales to attend a baseball meeting at a local restaurant. As he approached the front door of the restaurant, he slipped on the cement steps. He fell hard, heard a sharp crack and was knocked unconscious. When Ty awoke, he looked down and noticed the sole of his foot looking back at him in a highly irregular fashion. He realized his ankle and tibia were so severely broken that his foot was hanging limp and dislocated, nearly ripped from his leg. He quickly leaned forward enough to open the restaurant door to yell for help before he again passed out from the sheer shock of the situation.

Ty was transported by ambulance to the local hospital where he underwent 3.5 hours of orthopedic surgery to mend the ankle. He was required to stay on bed rest for six months and had to wear a cast and walk with crutches for a full year. Ty reflects, "When you're stuck in bed, your mind does terrible things. I just kept thinking about everything that I was not going to be able to do – basketball, baseball, golf. There's a reason that suicide and divorce rates are so high among the disabled – it's a mentally challenging experience."
It's true. According to the Center for Disease Control and Prevention, depression and anxiety are seen more frequently among people with disabilities than those without disabilities. And the government's 1994 National Health Interview Survey of nearly 50,000 households indicates 20.7 percent of disabled adults were divorced or separated, compared with 13.1 percent of those without disabilities.
In addition, Ty discovered when you're disabled, your cost of living doubles while your income goes to zero. He says, "I worried about everything, but the one thing I didn't worry about was paying my bills – thanks to the disability policy I purchased a few years earlier. That policy saved us from economic ruin. Although the restaurant's liability insurance policy covered some of my expenses, it wouldn't have come close to covering everything."

Ty's policy had a 30-day elimination period, so he received his first disability check on day 61. It paid him full benefits for one year and partial benefits for six additional months while he returned to work and rebuilt his income. "When you're in sales, you don't just jump back in and earn what you made before. Your pipeline is empty, so you have to start from the beginning and build it back up again," he explains. "Fortunately, my disability policy was structured for my line of work. They knew it would take time to rebuild my income and the benefit was there to help me do so. My disability insurance policy meant the difference between financial survival and collapse. It is essential income protection and was critical to my recovery."

Today, Ty continues to be an advocate for disability insurance. He manages the New England territory for Disability Insurance Services, after working several years at Standard Insurance – rolling out cutting-edge disability products, opening new territories and training new brokers. "I feel this is what I was meant to do," Ty says. "I've been selling life and disability insurance for more than 30 years. In that time, I've seen only one death claim, but I've seen hundreds of disability claims. In fact, my client who ultimately had a death claim, first had a disability claim and his waiver of premium rider paid his life premium and ensured his death benefit was there when his family needed it."

Despite a rewarding career, Ty can never fully escape his injury. As a result, he lost a great love in his life – the ability to play basketball. Ty attended college on a basketball scholarship and never lost his appreciation for the game – playing on a competitive league right up until his injury. Because of limitations in movement and ongoing pain, he also gave up umpiring after his injury. "In my experience, I've noticed most people who experience disabilities have at least one thing they completely lose as a result. Losing that one thing can eat at you psychologically, but it's something you can accept and live with if you can at least maintain your financial stability and move forward," Ty explains. "In other words, being disabled wreaks havoc, but it's much less destructive if your financial affairs are in order."

Ty knows firsthand disability can happen to anyone. He's seen clients become disabled by chronic illness, by unexpected stroke and by actions as simple as a stepping off a curb. In fact, accident or illness will force one in five U.S. employees to miss work for at least a year before they turn 65 (Life and Health Insurance Foundation for Education, Nov. 2005). And, one in seven of us can expect to be disabled for more than five years ("Commissioners Disability Table, 1998, Health Insurance Association of America," NY Times, Feb. 2000).

When working with new insurance agents, Ty always asks three questions:

1. you understand the difference between being handicapped and being disabled? There's a huge difference – handicapped people can work and disabled people cannot. You don't usually see them because they're at home in bed or they're in the hospital.
2. Do you know anyone who has been disabled? Most agents don't know anyone, but I tell them, "Now you do. Learn from my story."
3. When your client slips on a step or has an unexpected stroke and is drowning in bills with no paycheck to cover the bills, what will you tell his or her spouse? How will you explain that you sold a life insurance policy, but not a disability income policy?

The likelihood of becoming disabled is much higher than most people think. In fact, at age 32, the chance of being disabled for three months or longer is 6.5 times greater than the chance of death, according to the National Association of Insurance Commissioners.

Now that you've heard Ty's real-life story and know the facts, protect yourself and your clients by making disability income protection part of your core offering. Disability happens in the blink of an eye. Make sure your clients are ready – not just for death but also for life.

The original version of this article was published in the April 2010 issue of Health Insurance Underwriter.