As America prepares for a new president, the economy is in a state of flux. Just days after Trump won the election, stocks soared while bonds suffered and interest rates climbed. While people await further details on new economic and health care policies, they may feel a sense of uncertainty regarding their economic futures. In response, it’s only natural for people to seek control over their finances. This makes it a great time to start a conversation about paycheck protection.
The need for self-sufficiency
To attain financial certainty, Americans must also obtain financial self-sufficiency. Many people have already began working toward this in some regards. In the past, most Americans depended on employer-sponsored pensions for their retirement. These days, company pensions have declined. The new focus is on 401(k) accounts, meaning that employees have had to accept responsibility for their retirement savings.
Now, the burden of disability insurance is undergoing a similar transition. Employer-sponsored disability insurance benefits are becoming something of a rarity. At the same time, the uncertain future of Social Security Disability Insurance makes disability insurance and the self-sufficiency it provides more important than ever.
The truth about affordability
There’s a popular myth that says individual disability products are expensive luxuries only surgeons and attorneys can afford. As with many myths, there may be a nugget of truth behind this. Some disability insurance policies—the ones loaded with bells and whistles—are unaffordable for most people.
They’re also unnecessary for most people. The average person doesn’t need an expensive policy. They need basic protection. They need a policy that will let them pay bills if an injury or illness prevents them from working. This level of paycheck protection is affordable and often costs as little as one percent of a person’s annual salary. A person making $55,000 a year can pay only $550 a year for disability insurance. At only $46.83 a month, that’s an affordable policy and an achievable sale.
New audiences for disability insurance
There are many great audiences for disability insurance, some of which you may be missing.
- Part-time workers: According to the U.S. Bureau of Labor and Statistics, 27 million people work part-time. Many of these workers don’t receive employer-sponsored benefits. Because part-time jobs are becoming increasingly common, at least one major carrier has responded by offering a competitive disability insurance product for part-time employees.
- Women: In approximately 50 percent of American families, women are breadwinners. If 50 percent of your disability insurance clients aren’t women, there’s a clear disconnect. If fact, women may need disability insurance even more than men. According to the Centers for Disease Control and Prevention, women have a higher chance of becoming disabled than men—so why are they also less likely to have paycheck protection?
- Millennials: This generation is growing up. The older Millennials were born in 1980 and are now in their mid-thirties. Although the generation is often associated with a poor job market and low income, the vast majority of 2008 college graduates—upwards of 85 percent—are employed and earning more than $52,000 a year. This demographic, currently building their careers and attaining income growth, is an ideal target market for disability insurance.
Ready to bring about change?
Insurance agents and financial professionals have the power to influence the public’s attitudes toward paycheck protection. They also have a responsibility to educate clients about financial risks and opportunities. As you talk to your clients and prospects about paycheck protection, try to free yourself of the idea that paycheck protection is unnecessary or unaffordable for the average person. This is an outdated view with no place in the modern world, where most Americans can benefit from disability insurance.