DI: An Easy Addition to Your Practice
I hear the same phrase on a daily basis: “I’m mostly a life producer. I rarely sell DI.”
I get it. Disability insurance isn’t something you focus on every day. It can be an uncomfortable subject to discuss, and if you’re not confident you can answer all of your clients’ questions, it can seem even harder.
DI products are complex, but the conversation can be easy. Start by asking questions that will get clients thinking about their plans.
Get them thinking
The hardest part of the disability insurance conversation isn’t the products. Or prices. It’s getting started. If you’ve put off having the talk with your clients, it’s likely because you’re not sure how to break the ice.
Here are three simple questions to start things off and get your client thinking in real-life terms.
Q1: Do you feel you’re going to become disabled and be unable to work?
Most clients will say no. People are typically unable to fathom the idea that they will ever not be able to work. Truth is, about 1 in 4 of today’s 20-year-olds will suffer a disabling event sometime in their lives.
Whether or not clients believe the stat is irrelevant. You're their advocate to create financial protection, to protect their future. If you gave them a 25% chance of running out of money, you'd probably find yourself with one less client. How is the chance of having a reduced paycheck any different? Or worse, no paycheck at all.
Q2: Do you have a plan in the event you become disabled?
Some clients will answer that they have savings. Some will reference their employer’s group plan. Most will mention Social Security. While these are all great resources to utilize, they aren’t always a great fall-back plan.
While group disability is a great benefit to have, it isn’t guaranteed. Also, those benefits are taxable and only replace a portion of your income.
Are your clients able to sustain their way of living on 60% of their income, and lose part of that to taxes?
As for Social Security Disability Insurance … it’s difficult to qualify. And that’s a huge understatement. The wait time is long. The approval rate is only around 35%, after multiple applications and possibly hiring an attorney. If you do finally gain approval, the average benefit is $1,300 per month.
Most individuals will find it very difficult to sustain their quality of life on this benefit alone. Your clients would benefit from having a plan. Even if they choose not to insure, at least they know what to expect.
Q3: If a disability did occur, and you needed help, who would be there?
A common thought, especially for younger individuals, is they will be able to rely on family members for support: emotionally, physically and most importantly, financially. This should prompt a follow-up question: Can you name three family members who are willing and able to pay your bills for more than a couple of months?
- An average individual disability insurance claim lasts 31.6 months
- An average group long-term disability claim lasts 34.6 months
And even if they have people or could help, wouldn't it be better if they didn't need to?
Keep it relevant
You don’t have to talk about funding. Or insurance plans, for that matter. All you need to do is make them see the importance of planning so you can head down that path – together.
Does your client know anyone who has been disabled, and unable to work, due to a sickness or accident? Even for a short time? Talk about the impact it had on their family.
If they are married, can their family sustain their current quality of life with just one income? And if they do, are they willing to sacrifice any built-up savings, or dip into their retirement account? It's real money — hard-earned money — that's on the table. Suddenly a small investment in protection may seem well worth it.
Often, and especially if they are young, your clients haven’t thought about the possibility of not being able to work. It’s natural. But no matter what stage of life they’re in, nearly every plan starts with the same thing: income.
But we never think it will be our income that will be interrupted. Until it's too late. Get your clients to picture that it could happen, and the effects if it did. Seeing the impact is the first step to getting them to recognize their need for coverage.
Keep it simple
You don’t have to have all the answers. You just need to ask the right questions. For even more help, check out our opportunity finder, 5 Simple Steps to Talk About DI.
See it through
Your clients worked hard to build their financial future (and so did you). But once it’s gone, it’s too late. It’s our job to make sure that everything works when your clients can’t. To make sure their foundation is protected.
Don’t end the conversation before checking the last box. Check out these resources to SEE IT THROUGH – to create a solid financial foundation for paychecks, made possible.