disablity insuranceThis year is shaping up to be the best housing market in 10 years. Unemployment is low, mortgage rates are relatively low and consumer confidence is the highest it has been in 17 years. And millennials, the largest generation in history, are finally starting to buy. In fact, millennials make up the largest segment of home buyers.

The forces of supply and demand are driving home prices higher. Comparing June 2017 to June 2016, home prices are up 6.7 percent. Generally, home prices are fifty percent higher today than in March 2011, the lowest point in the housing crisis. Furthermore, the inventory is at a 30-year low, which is in turn driving up prices.

Amidst these encouraging economic numbers, there are also a few financial warning signs. Consumer spending is up 3 percent, while the saving rate declined by 35 percent compared to 2015. Consumption increases are outpacing income growth. And, wage growth is relatively flat.

The bottom line: People are buying more, houses cost more and the financial risk of disability is greater than ever before.

Why homeowners need disability insurance

If you ask clients about their asset protection strategies, they will probably think you are referring to their physical assets or bank accounts. They may need a nudge to see their ability to earn an income is the underlying asset that allows for the acquisition and continued ownership of other assets.

An illness or injury, especially one lasting three months or more, attacks their most valuable asset – the ability to earn a living. Many mortgage defaults and bankruptcies are caused by medical expenses and the inability to work. From this perspective, disability insurance can be viewed as essential coverage. It may be even more important than life insurance, particularly since one-third of 30-year-olds will experience a disabling illness or injury lasting three months or more at some point in their careers.

While group disability insurance provides limited protection, individual paycheck protection is the only disability coverage that is owned by the insured. The client is not subject to employer decisions about whether to offer disability benefits, the amount of coverage, and the extent of coverage. Clients in the early stages of their careers are more likely to change jobs. Benefits vary from employer to employer; many do not offer disability insurance at all. Only individual disability insurance can guarantee coverage now and in the future.

Like PB&J, some things just go better together. Home ownership and disability insurance are a great example. Talk to your clients who are homeowners, especially those that have recently purchased a home. Help them to see the importance of protecting their greatest asset, not their home, but their ability to earn an income. Then talk to your DIS representative about the many ways to structure coverage options that are affordable, portable and robust. Our products range from those that are fully underwritten to simplified and guaranteed issue. We will help you select the combination of coverage, product, and premium that works for your client. Call us today.

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