What if you knew you were going to become totally disabled today? Are you ready? Are your clients ready? What about their finances – are they prepared, too? Most people and their financial plans aren’t protected from the unexpected. It’s unfortunate – you never know when a disability or illness will strike.
Sometimes, it’s hard to imagine what could possible happen to make someone unable to get up and go to work anymore. It’s too difficult to think about being too sick or injured (physically or emotionally) to continue with live as we know it.
But it happens. Trust me. I’ve heard many life stories that were both unexpected and unfortunate.
One woman, a dentist, was cleaning her fish tank as usual when the unimaginable happened: The glass shattered and severely lacerated her wrist. Not only can she no longer practice dentistry and care for her patients, but she also can no longer provide for her family. She waited too long to decide to purchase a disability income policy.
For one family man, the story ends on a brighter note. He was healthy. He went to the gym on a daily basis. He ate right. He saw his doctor regularly. Then, without warning, he suffered a stroke. He became wheelchair bound and unable to do the things he loved, including his work. Because he was prepared with a strong disability policy, however, his family was impacted emotionally, but not financially.
Put it in Practice: Disability does not play favorites. It can happen to anyone. It comes in many forms. Ask your clients where they would be if they no longer had a paycheck. Then do something to help.
Firefighters put their lives on the line every day; when they go to work, it’s no surprise they risk more than an average employee. Disability income insurance for firefighters is hard to come by, but Ash Brokerage works with carriers that will insurance this occupation. Due to the nature of the job and hazardous activities associated with fighting fires, however, the products available offer limited benefit amounts and restricted periods.
Typically, the policy will cover only total disability, and the benefit period will be a maximum of two years. Some carriers may offer a limited partial disability benefit, which means the policy holder would be limited from doing some of his/her daily activities, but not totally disabled. In this case, the insured would receive a reduced benefit.
It’s also important to note most firefighters are considered government employees. All disability carriers, no matter your occupation, consider government employees different from private business employees because government employees typically have part of their pension “pushed out” to them if they become disabled. Usually, there’s no way to stop this from happening, so carriers view this payment as a form of disability benefit. This limits the amount of coverage government employees can purchase, as compared to a privately employed person who doesn’t have any disability coverage.
If you have any clients who are firefighters, the least you can do is look into the possibility of obtaining disability income insurance to protect their paycheck. After all, they protect your home, business and family every day.
Most people know they need to save for retirement … that’s why most of us are saving. According to an article published in the Principal Financial Well-Being Index, 61 percent of workers are very concerned about their long-term financial future.
In the disability income world, we all know how important it is to cover our most valuable asset: our ability to earn a paycheck. But what about covering our retirement contributions? According to the Employee Benefit Research Institute, health problems are No. 1 reason workers take an unexpected early retirement. If your clients were to become disabled, would they be able to continue to contribute to their 401(k) or other retirement plans? The answer, most likely, is no.
A disability plan that covers retirement contributions can help protect your clients’ retirement in the event that they become too sick or hurt to work. I know adding another expense could make for a difficult sale. But, can your clients afford to NOT purchase this type of coverage?
Ask your clients how they plan to live in retirement. Maybe they want to spend their days volunteering. Or maybe they want to travel in their non-working years.
If they experience a health problem during their earning years, not only could their dreams of how they want to spend their retirement be crushed, but they could also have the burden of figuring out how they will save for an early retirement, or a retirement that includes unexpected medical expenses.
Put it in Practice: Talk to your clients who are contributing to their 401(k)s. Those who are at their maximum issue limits for DI insurance are great prospects as well. A policy that covers retirement savings allows them to purchase additional coverage on top of their personal coverage.
What do you think of when I say "long-term care?" When I first started at Ash Brokerage, I thought of an 80-year-old Alzheimer's patient wandering around a nursing home with no hope of leaving. The most positive image I had was of Allie and Noah in “The Notebook,” sharing a room together in a facility where they would eventually pass away. It’s a great sappy love story, but it’s still not very positive, right?
Well after two years of designing care plans for families, my view has taken a 180-degree turn for the better. The days of gray nursing homes filled with our grandparents are becoming an image of the past, I’ve learned – more than 70 percent of LTC claims are being used for home health care.* People are staying in their homes as long as they possibly can. Knowing that statistic, can you tell me why we are still selling LTC policies to cover nursing homes?
You might argue that you want to sell your clients an LTC policy that puts them in the Ritz-Carlton of nursing homes, but unless your client is a millionaire, that's going to be hard. The days of 5 percent compound cost-of-living adjustments and lifetime-care benefits are gone; a close comparison to those policies can cost a client more than $10,000 a year in premium. If they can afford that God bless them, but I know my family can't.
There is a market for traditional LTC insurance. The difference in the market of late ’90s and early 2000s is that we're not covering nursing homes – now we're covering home care.
Let's look at an LTC benefit of $4,500 a month for three years. That's a total bucket of $162,000, which is enough to cover home health care costs in most of the country today.* Add a cost-of-living adjustment to keep up with the rising costs of care, and by age 80, that client is looking at a healthy policy – one that can give them peace of mind as they age. It can keep them in their home when they are sick. It can keep their family from fighting over care. It can even allow them pass their hard-earned assets to their loved ones.
Oh, and did I mention if we talk to them early enough, and they are healthy enough, that same peace of mind could cost your client less than $3,500 a year? That's literally less than the cost my Verizon wireless family plan each year ...
Put It In Practice: Do yourself a favor and stop making the association of "LTC = nursing home." There's a whole new, positive, innovative LTC market out there waiting for you and your clients. They'll thank you for thinking differently.
Every year, we review more than 1,000 existing life insurance policies with our Life Insurance Portfolio Analysis. Most of our time is spent understanding the “what” of life insurance, and rightfully so. Families, businesses and charities depend on the “what” of these policies. People need to understand how their policy works, how long it lasts, how much to pay and when, etc.
So the “what” is critical, but it’s not the whole story. In fact, our entire analysis means very little without the “why.” Life insurance is an incredible tool that can solve a multitude of issues, but if you don’t know why you have such an asset, it has little perceived value.
When we review policies, we need to better understand why the original policy was purchased, what purpose it served at that time and what purpose it can serve today. Reviewing a policy means very little without considering what is important to the family it is intended to serve. A needs analysis can be done, but you have to ask how it fits with your clients’ hopes, plans for the future and desires for the most important people in their lives.
Really, the “why” can be summed up with one question: “Who’s counting on you?"
Put it in practice: Think of a few clients who have existing life insurance coverage and ask if they would be willing to review the coverage. Then ask the question, “Who’s counting on you?”
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