By the time this no doubt Pulitzer-worthy column reaches your mailbox, desk, briefcase or commode, and thus your eyes, Disability Insurance Awareness Month (DIAM) will be well underway. And hopefully more than a handful of you will have made a determined effort to speak with your existing clients, and sought out new prospects, to impress upon them the critical need to protect what is almost universally their most valuable asset—their paychecks.
Many thanks to the Council for Disability Awareness (CDA) and President Carol Harnett as well as Clare Morin, CD&M Communications, for the wealth of information they shared to contribute to this column. The CDA has prepared a new consumer awareness campaign The Crisis of Disability Coverage in America (http://realitycheckup.org/) that you would be well advised to share with all your clients who have yet to purchase disability income protection. The CDA also has a wealth of advisor resources (http://disabilitycanhappen.org/advisor/) to help you establish the need with your clients, reluctant or not. I found their Reality Checkup Media Kit particularly helpful, packed with useful information and sobering statistics (http://disabilitycanhappen.org/wp-content/uploads/2018/04/The-CDA-RealityCheckup-Media-Kit.pdf).
Let’s take a look at some numbers (I hope you have your disability plan in place!):
- More than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.
- At least 51 million working adults in the United States are without disability insurance other than the basic coverage available through Social Security.
- Only 48 percent of American adults indicate they have enough savings to cover three months of living expenses in the event they’re not earning any income.
- A 2014 study of consumer bankruptcy filings identified the following as primary reasons: Medical bills (26%), lost job (20%), illness or injury on part of self or family member (15%).
Worker’s Comp? Workers’ Compensation only covers time away from work if the disabling illness or injury was directly work-related. In 2016, only one percent of American workers missed work because of an occupational illness or injury.
Social Security? Nice fantasy, but the reality is terrifying: From 2006 to 2015, only 34 percent of Social Security Disability Insurance (SSDI) claimants had their applications approved—23 percent at the initial application stage and the remainder after a reconsideration or appeals process. It generally takes three to five months from time of application for SSDI benefits to get an initial decision and the backlog of appeals cases was more than one million in 2017, with associated processing time averaging more than 18 months. And lest we forget, the average SSDI benefit as of January 2018 was $1,197 per month or $14,364 annually—barely above the poverty line for a one-person household, and well below the line for a couple.
But disability income pays as soon as the elimination period is satisfied, sometimes as soon as 30 days.
In addition to the great folks at the CDA, there are resources available through the International DI Society (IDIS), which I urge you to join, (http://www.internationaldisociety.com), and Life Happens, (http://www.lifehappens.org/insurance-overview/disability-insurance/).
Disability Insurance Awareness Month is a wonderful initiative, but none of the industry organizations that embrace DIAM have the budget to inundate the national media with the call to action or plaster venues with PSAs during the NBA or NHL playoffs. It’s up to insurance professionals like you to spread the message to clients and prospects, or even call your local news station to beg for a segment on paycheck protection. In the arena of societal benefit, it surely beats the lady who shows you how to make decorative wreaths from toilet paper tubes and candy wrappers.
Great friend Eugene Cohen, one of the industry’s greatest DI marketers and educators, believes that every month should be DI Awareness Month for the conscientious advisor. I’m inclined to agree. I urge you to use DIAM to begin a diligent review your book of business and reach out to your clients throughout the year to either do a disability insurance review with you or to urge them to meet with a trusted disability insurance specialist.
Your clients have paid for your home(s), your car(s), wardrobes, groceries, and all manner of “nice to haves” and “need to haves” for your family (including, one hopes, your own DI policy premiums). Sally’s ballet and tap lessons. Jimmy’s GI Joe with the Kung Fu Grip. Private school? College tuition? And what, exactly, happens to the financial plan you painstakingly helped your clients put in place when the income paying the premiums comes to a screeching halt due to an injury or illness? What happens to that family? Since you received your life and annuity commissions up front, what did they really pay you for in this scenario? I’m occasionally known to say, “Sometimes money just costs too much.” Cashing commission checks without urging your clients to protect their paychecks just could be one of those times. [SPH]
