It’s always a good time to talk about disability insurance. After all, the coverage provides important protection against the financial fallout of common illnesses and injuries. But if you’re clients have been putting off coverage, May is an especially good time to talk about disability insurance. That’s because May is Disability Insurance Awareness Month. Take advantage of this by educating your clients on the importance of disability insurance.
Provide some eye-opening statistics.
It’s natural for people to underestimate their own risks. Your clients might think that they are unlikely to face disability, especially if they’re currently enjoying good health. Unfortunately, the truth is that disability can strike anyone.
Most of today’s 20-year-olds probably don’t give much thought to disability, but one in four of them will experience disability before they reach retirement age.
And while many people assume Social Security Disability would cover them if anything happened, only about one-third of claims filed between 2007 and 2016 were awarded. Even when claims are approved, benefits might not be enough to cover everything. The average monthly benefit in 2017 was only $1,196.87.
Give them the truth about the causes.
One reason people underestimate their risk is that they misunderstand the main causes of disability. According to the Council for Disability Awareness:
- Pregnancies accounts for 25 percent of short-term disability claims and 9.4 percent of long-term disability claims.
- Mental health issues account for 7.7 percent of short-term disability claims and 9.1 percent of long-term disability claims.
- Musculoskeletal disorders account for 20 percent of short-term disability claims and 29 percent of long-term disability claims.
- Cancer accounts for 15 percent of long-term disability claims.
Most claims are not related to work – which means that workers’ compensation won’t help.
Help them see what’s at risk.
An illness or injury can result in expensive bills and lost wages – both of which can result in financial problems. The result could be bankruptcy and foreclosure.
The average long-term disability claim lasts 34.6 months, according to the Council for Disability Awareness. Many people lack enough emergency savings to cover a few months of lost wages. Covering a few years is out of the question.
Ask your clients how long their savings would last without an income stream, and what they’d have to sacrifice once the money ran out.
Share more information with them.
The Council for Disability Awareness provides great resources on disability:
Need more help? Get five ideas for your May Disability Insurance Awareness Month Campaign.