Michael Cohen

An individual disability insurance (IDI) policy has various elements and provisions as part of the base policy. There’s the monthly benefit that would be paid out for a qualifying disability. There’s a waiting period (called an elimination period) that the qualifying disability has to last in order for the insured to qualify for benefits. The longer the elimination period, the lower the cost of the policy. A base IDI policy will usually consist of a triggering disability for benefits to be paid, such as total disability, some type of partial and/or residual disability, and presumptive disability are among the most common. Some policies also have provisions built into the base policy that will allow for a slight increase in the monthly benefit. This is usually called an automatic increase benefit provision but is typically limited in duration and the condition that the insured is not on claim. There are many different provisions that can enhance a policy, but these are usually the common elements we see in most IDI policies. Of course, you should always read the illustration and/or specimen policy to confirm what provisions are built into the policy.
Similar to other insurance products, the policy can be further enhanced by buying additional options that would be added to the base policy. One of these popular options (commonly called riders) would be a Cost of Living Option or COLA. The COLA option is different from other riders or automatic increase benefits, as it has unique properties that can increase the monthly payout from the disability company.
The COLA rider will add cost to the premium, as it allows for the monthly benefit to increase during the course of a qualifying disability claim. The first increase would typically take place after the first year of the claim. Typically, on each anniversary of the claim, the amount of benefit will continue to be increased. The amount of increase will vary based on how the rider is built by the insurance company and selected by the consumer.
The amount of increase can be a fixed percentage or an amount that is based on a consumer inflation index. Regardless of the index that is used to determine the amount of increase, there is usually a cap to the monthly benefit increase. For example, there’s a company that offers an indexed cost of living rider in which the consumer can choose the cap of either three percent or six percent. If the consumer chooses the three percent cap, and then a qualifying claim, the policy’s monthly benefit will be increased on each claim anniversary by the defined consumer price index up to a cap of three percent. The lower cap has become more popular because it is less expensive than the six percent option, and in the past 20 years it’s rare for the index to have been greater than three percent. As with any industry, you may find variations to the index used, the caps used, and whether or not the company will use compounding or simple interest. The general theme though is that there is a method to allow the monthly benefit to increase while on claim via the COLA riders.
Why should an adviser recommend the COLA rider? There is no right answer, as each client is different and may have different budgets, goals, net worth, and other factors that may affect the recommendation. In general, if a client is young and becomes disabled, the claim may last 20 years, 30 years, or even longer. During that time period inflation will have a natural attrition on the real intrinsic value of the monthly benefit. For example, let’s take a dentist who develops the same Parkinson’s condition that Michael J. Fox was diagnosed with at the age of 29 and eventually became more and more disabled. If our example dentist became totally disabled at the age of 34 and has a benefit period to age 65, that can become a 31 year claim. If the dentist bought a $5,000 monthly benefit policy without a COLA rider, then, over time, the intrinsic value of the $5,000 would buy less and less goods and services. If the policy had a COLA rider, then, in theory, the $5,000 would be able to keep up with the defined CPI in the policy, assuming the inflation rate was still minimal during the duration of the claim.
In designing an individual disability policy, it’s important to keep in mind the cost of the policy as well. As advisers, we’d prefer to see the maximum benefit period, shortest elimination period, and all the available riders be put on the policy. Yet, there needs to be a balance between benefits selected, rider design, and the cost of the policy. Given that an inflation rider can dramatically increase the liability for the insurance company, there is a proportional cost for the rider. Therefore, in designing a disability policy, one of the many questions the adviser needs to ask is to COLA or Un-COLA the policy. 

Individual disability insurance is one of the coolest products in the insurance world. There are features that you really don’t see in other life and health insurance products. We want to focus on some of the increase options that you will most likely see in many of the products. Of course, each insurance company is different and designs their products differently, so please read the specimen contract to ensure that any of the features mentioned are available for your client.

Automatic Benefit Increase Riders
There may be variations to the actual name of this rider, but in general, if issued with the policy, it will allow your client’s benefit to slowly increase each year for a certain duration. Depending on the company, this rider may not be available at the time of issue due to occupational class and/or age limits. The rider allows the monthly benefit to increase by a certain percentage on the policy anniversary.

For example: A client bought a $5,000 per month benefit with a policy date of June 1, 2020. The next year, the rider would increase the monthly benefit by a certain percentage. If the rider allows for a four percent increase each year, then the $5,000 per month would be increased to $5,200 at the anniversary. The percentage of increase will vary based on the company, but typically we’ve seen this be in the four to five percent range. Typically, this automatic increase will continue for about five years. Again, it can vary based on the company. At the end of the initial automatic period, assuming the client is not on claim and is under a certain age, the client usually is given the option to allow the increases to continue for another set period based on the company’s underwriting requirements. Usually just financial justification is required to renew the rider for another five years. What an awesome feature to a policy! This allows for a client’s monthly benefit amount to increase to thwart possible erosion of the benefit by inflation and helps to keep the benefit up with slight increases of income. Note, the rider usually will not increase benefits when a claim is in progress.

Future Purchase Options
These are options to increase the monthly benefit by larger amounts, but again without having to prove medical insurability. These types of riders are typically available at the time of issue as long as the client fits certain parameters, such as issue age, occupational rate class and applying for a certain percentage of eligible benefit. These riders allow for a much larger amount of monthly benefit to be purchased on certain policy anniversaries. In addition, some companies may allow the client to increase the policy off-anniversary if certain events occur, such as, but not necessarily limited to, a loss of group benefits.

This rider has really evolved into two subsets: The purchased rider and the no cost rider. The purchased rider usually will give the client a set amount that can be applied for at a later policy anniversary. In general there is no medical underwriting, but usually financial underwriting and not being on claim at the time the increase is being requested are required.

For example: An attorney client, age 35, buys a $5,000 per month disability policy with a $5,000 future purchase option. At age 40 the attorney has seen a doubling of income and needs more coverage, but at age 38 he was diagnosed with MS that is hardly noticeable and hasn’t slowed down the attorney’s solo practice. Even though the attorney is most likely uninsurable for disability insurance with traditional insurance companies, the client can still increase his disability benefit via the future purchase option assuming the current income would justify the increase. Depending on the company, the increase can raise the monthly benefit on the current policy, or the company may issue a new policy for the increased amount using the most current disability policy series. The rates would usually be based on the current age at the time the option is being activated. The unused amount of future purchase options will expire at a certain age and be taken off the policy. Companies may or may not issue this rider on their current policy offerings, but as a planner it’s very important to know about this rider when reviewing previous disability policies purchased by your client.

The other increase rider that we see being developed by companies is a rider that typically doesn’t add extra cost to the premium at the time the policy is initially issued. This no cost rider may go by various names, such as benefit update or increase option rider, but they have some similarities. In general, this rider allows the actively at work client to increase the monthly benefit every few years with only financial underwriting. The key is that this is systematic, in that typically the client needs to submit a financial questionnaire and/or more detailed financials whenever the option becomes available. The company will then let the client know how much the policy can be increased if at all. A usual requirement of this type of rider is that certain conditions need to be followed in order to keep the rider active with the policy. If the client doesn’t submit the requested financial information or if the client doesn’t accept a certain percentage of what the company offered, then conditions of the rider may not have been satisfied and the rider would be removed.

For example: The same attorney client. At the third policy anniversary, the company notified the client to submit financials to be evaluated for a possible benefit increase. The client submits their financial information and, due to a large increase in income, is offered to increase the policy by $8,000 per month for a total of $13,000 per month of benefit. If the client accepts a certain amount of the offered increase, the option to increase rider will stay on the policy—assuming the client is still age eligible. If the client decides to not submit the financials or doesn’t accept a certain percentage of the offer, then typically the rider will be removed from the policy as the client didn’t fulfill the contractual requirements to keep it. Similarly, some companies may allow the client to increase the policy off-anniversary if certain events occur such as, but not necessarily limited to, a loss of group benefits.

These riders are essential to the planning and design of individual disability policies. These also give an opportunity for the adviser to have a valid business reason to systematically review and update disability insurance needs with their clients. These riders and benefit options are not only essential for the client but are also some of the additional benefits for the adviser in building a block of disability policies. 

Hopefully, we will never experience again what we all have had to endure the last few months. Our government was forced to shut down segments of our economy for the safety of all of us. The power of a paycheck has never been more important than what we have seen in these unprecedented times. An unpredictable market, segments of businesses diminished to a fraction of what they were in the past, and a light at the end of a tunnel that hopefully will be here sooner than later.

So where does individual disability insurance play a role in today’s atmosphere and tomorrow’s planning? We are still seeing a lot of activity in the disability marketplace. While there are businesses that are struggling to survive, there are many businesses that are still thriving. Many of the owners of these businesses and many professionals who are working every day, have seen that their ability to work as essential. The unpredictability of the equity markets has also made many realize that the ability to work is one of the most important assets someone possesses.

As we all know, the planning process is a never-ending process that requires flexibility and open dialogue. If a client became disabled due to an accident or sickness, what is their ability to maintain their standard of living? Ensuring your clients are up to date on their insurance products is always important, especially during times like these, of course, for clients in which it would be appropriate to have such dialogue.

In the individual disability insurance processing world, we have seen many companies with electronic applications and electronic delivery processes. It’s never been easier to write and submit applications and deliver disability insurance policies in an all-electronic fashion.
In addition, the non-fluid, non-exam issue limits have been increased with many companies, so you don’t have to worry about a paramedical exam being needed for most cases. Of course, please check with an individual company for the requirements needed for the amount being applied.

If you have any clients with disability coverage in force, don’t forget about the future purchase option or automatic increase option with upcoming renewals that may be on their policies. These types of policy riders may give your clients the ability to increase their monthly benefit without medical underwriting. Depending on the company, there may only be financial underwriting required. Many companies have changed the way they notify brokers about important deadlines connected to these riders—turning to electronic communication or to just posting on the company’s website. As an advisor, we would recommend that you also have a system to remind yourself of the future purchase option and any automatic increase option renewal date(s) so you can proactively reach out to your client.

Our clients need us more than ever to support their financial goals and protect themselves and their families from the financial effects that life can deal to any of us. May you, your families, and colleagues stay safe and healthy during these unprecedented times.

We recently had a call from a producer who wanted to discuss a marketing program for the rest of the year. This is a fairly experienced producer who has a nice book of business. His primary goal was to develop a system in which he sends out emails and then waits for email responses or for random people to call him once the email is received. We discussed many different marketing methods and asked him to keep in mind: The easiest, most convenient marketing methods can be some of the least effective marketing campaigns. Typically, the most effective marketing plans require a four-pronged approach using: Research, a simple message, persistency, and, most importantly, the human touch.

Any producer or advisor who has been in the financial service business for more than five years usually has a large enough block of business to use this four-pronged approach to marketing (in addition to obtaining new clients via a variety of methods). We are in a very dynamic industry that has continuous changes in products, underwriting, technology, and processing. These changes bring constant opportunities to meet with existing clients to review their current portfolio and to educate clients, making sure they have the most current products.

There is always a reason to meet with your clients every few years—to make sure their goals and plans are proceeding as projected. While we are in a constantly changing business, what hasn’t changed is that most clients who are working still need a monthly income if they can’t work due to a sickness or recovery from an injury.

Many times the best marketing plans are in your filing cabinet or computer. Do you have a systematic plan that calls for you to personally meet with every one of your clients at least once every few years? If not, you are missing the march to marketing. In today’s world, with consumers being bombarded with impersonal TV and radio ads for insurance, keeping in touch with and in front of your clients is more important than ever.

Understandably, many advisors like to have a “valid business reason” to reach out to a client. Fortunately, you already have “valid business reasons” to reach out to your clients for a quick meeting or lunch. Every financial advisor or insurance producer, regardless of specialty, has dozens of reasons to reach out to an existing client: Discussing financial market changes, new changes on the renewal of a car or homeowners policy, changes in interest rates, worker comp audits, health insurance renewals, and the list goes on. As advisors we can sometimes assume clients understand the products and constant changes that take place in our industry.

When you are with your client, it’s a perfect time to either review their disability insurance or to ensure they even have coverage. What you will most likely find is that a majority of your clients don’t have any disability insurance. When you make time to support your client by sitting down with them to discuss the ever-changing financial and insurance products available, you will build a better, more personal relationship with your client. And you will discover more of their needs, such as disability insurance.

What is your systematic client review process? There are various systems available and any will do as long as you are able to make eye to eye contact with your clients every couple of years. You should have a client management system to keep track of your customers—if not, you can look up dozens of them to implement. Contact spreadsheets are a start, automated emails, even the tried and true one card system can work well versus waiting for the phone to ring. For some of you this is obvious. For many of you this is something that ought to be done, you know it should be done, but it hasn’t. Don’t negotiate with yourself. Instead, start your process today! It’s amazing how many advisors either don’t have a formal process set up or feel that, since they haven’t in the past, then it’s too difficult in the future.

Clients are more likely to do business with firms and advisors who they have worked with in the past. We belong to AAA and enjoy their discounts and service. It’s remarkable how many offers, deals, and opportunities they give us—to engage with them even more. The AARP also does a great job soliciting for opportunities of engagement.

How many times have you offered engagement to your past clients? Have you offered your services to your clients’ children as well? The key to helping more clients protect their income is to ask questions and to make sure your clients have coverage. How many times in the last month have you asked your clients about disability insurance? If the answer is less than a few times, then we are guessing that you, as an advisor, are not comfortable with either the product and/or the process. If you are not comfortable, reach out to an MGA or company that specializes in individual disability insurance and start to get comfortable. Your clients may be depending on it!

The best time of the year is upon us as we approach the end of the year. While we finish up 2019 and head into 2020, many of us can look back at the year and think about how many clients have followed our recommendation to protect themselves and their families with disability insurance.

We have received great responses to our Broker World disability insurance articles and it’s fantastic that so many of you have the support your clients needed to plan for the possibility of a catastrophic injury or sickness that can cause a prolonged disability.

While the holiday season is a time of joy and happiness for most of us, it can be a time of hardship, both physically and financially, for those individuals and their families who are affected by a disability or unfortunately become disabled.

The holiday season is synonymous with traveling for those who are visiting family and friends, either short distances or long distances, either by car, plane or train. According to the National Safety Council, in December 2018 there were an estimated 48,100 car crashes that were serious enough to be considered a medically consulted injury.* We don’t know how many of those estimated 48,000+ had injuries severe enough to become partially or totally disabled, but we do know the statistic and it’s not an anomaly, and indeed many look to get a car accident lawyer during these times. Anyone involved in an accident like this will know how scary an ordeal it can be as it can often leave people with life-changing injuries – those who find themselves the victims of a car crash may want to consider getting in touch with a car accident attorney Houston for legal assistance.

Year after year a time that is supposed to be so full of happiness can turn tragic in a flash. Usually when there is a car accident, the owner of the car will call their car insurance company or agent and report the damage to the car. Who is your client or the client’s family going to call if your client passes away or becomes disabled due to that accident? Will your client be among the estimated 48,000 that has a serious accident and possibly becomes disabled this holiday season? What will your response be to the question, “So how much disability insurance do we have and how do we file a claim?” Will it be that you will contact a Springfield car accident lawyer to file? Or a similar lawyer?

For some of us the holiday season is a time to catch up with our clients at the end of a busy year and to get ready for the next year. Take some time during your holiday season to examine your book of business and confirm how many of your clients may need disability insurance. How many professionals and business owners do you have as clients-in any capacity?

Regardless of whether you specialize in property and casualty insurance, annuities, life insurance, or overall financial planning, many of your clients depend on you as the person they trust and turn to for all of their insurance advice and needs. Therefore it’s good to have an updated client insurance inventory in your file of the insurance products your clients own.

If you don’t have the inventory, you should talk to your clients about keeping a comprehensive record of their insurance inventory. If you are considered the insurance resource, the go-to person, and your client’s family calls you to find out the coverages, you can either be the resource or have to refer them elsewhere in their time of need.

Not only does the inventory make you more valuable when a client passes away or is unable to give direction due to a severe disability, but it gives you the opportunity to review the current products and identify any gaps in coverage. Regardless, if you have an inventory or not, most clients do not own disability insurance and are exposed to the possible hardship that often occurs without coverage, or enough coverage, to meet fixed expenses.

For those who are already disabled, this holiday season can financially look much different from those who aren’t. Of course much of this will depend on the severity of the disability and the standard of living to which the client is accustomed.

Let’s take a 45 year old radiologist that loses the ability to see clearly due to an eye injury, such as a tennis ball or car accident, or perhaps a disease that affects the eye(s), such as optic neuritis, intracranial eye strokes, retinopathy due to diabetes, or some other condition. Usually, this is a story with two scenarios…one with individual disability insurance and one without.

Every year, doctors and nurses from all over the world attend to thousands of eye injuries. A significant number of these are caused by dangerous work environments and accidents occurring due to negligence in the workplace. Causes of eye injuries can range from excessive straining of the eyes while performing assigned tasks, to flying debris, and even exposure to harmful chemicals or fumes.

With this in mind, if you work in an environment where dangerous goods are stored, it is vital that you have access to an emergency eyewash station and a chemical shower to deal with any incidents that may occur. Put simply, emergency showers and eyewash stations allow you to quickly wash away dangerous chemicals that can come into contact with your face or body while handling hazardous chemicals. You can learn more about the importance of installing these types of safety measures in the workplace by taking a look at this Storemasta Eyewash station guide.

So, will the holiday season be spent in a smaller home or apartment, or in the current home paid for with the monthly individual disability insurance check? Will the holiday feel like holidays of the past, before the disability, or will it feel like a holiday for a family that is struggling to keep their financial independence?

The holiday season can be an expensive time of year; from the presents, to the hosted meals, to traveling, to all of the extra unexpected expenses that always seem to come up. Will the holiday season be one of joy or one of worry and concern for their collective financial future? We hope none of your clients experience the latter scenario and have nothing but joy and happiness this and every holiday season. ?

Reference:
*Medically consulted injury is an injury serious enough that a medical professional was consulted. Based on the current medically consulted injury to death ratio of 114:1 and rounded to the nearest hundred, the estimate of nonfatal medically consulted injuries that will result from crashes during the holiday period is 48,100, with a 90% confidence interval of 42,400 to 54,500.

2018 National Safety Council. All rights reserved https://injuryfacts.nsc.org/motor-vehicle/holidays/christmas-day/

In today’s world of online quotes and direct to consumer marketing, it’s important to be at the top of your game at all times. When it comes to individual disability insurance, it’s no different.

We support many national organizations and their financial advisors at our agency. In doing so, we need to be sure we focus on the three essential parts of underwriting: Medical, occupational, and financial underwriting. Not only do we review these areas, but we search for clues that may help us identify when a case has possible upgrades and possible pitfalls.

While we can obtain the basics needed for a quote, the “make it or break it” part really comes down to the ability to identify the cases that need extra clarification and those that need to be moved to a non-traditional product.

Cases that cause challenges for those that are not experts in disability insurance are the cases that do not hold up to the expectations of the consumer. The expectations of the consumer need to be shaped by the financial advisor who, in turn,should be given some basic knowledge of the three major underwriting areas.

For example, the occupational rate class is essential to the pricing of an individual disability insurance policy. Depending on the company, the occupational class is usually assigned a number and/or letter, such as 5A, 4A, 3A, 2A, A, B, with 5A being the top class and B being the lowest rate class. Each company has their own version of the rate class system but, in general, we tend to see anywhere from five to 10 different occupational classes or variations of classes. Each class may have different pricing and different policy features or definitions that may be associated with the corresponding class. If the wrong occupational class is used in an illustration, most likely the rates will be incorrect and/or certain policy features may not be available. Some advisors have a difficult time at policy delivery when a policy is issued other than applied, so getting the occupational class correct is essential for any disability marketing team. In addition, there can be other aspects of a case that can allow an upgraded occupational rate class when normally a lower rate class would need to be used. For example, some companies may have business owner upgrades where, if the size of the company, length of ownership, income, and other factors are within certain guidelines, a better rate class and/or more coverage may be offered to the client. If the internal wholesaler doesn’t recognize that the better rate class can be used, then the illustration may be priced too high or not have as much benefit as could have been quoted. If there is competition on the case, then it’s possible the client can be shown the exact same company but with lower premiums and/or more benefits. Our DI marketers train on occupational class underwriting and are constantly looking for programs that can allow better occupational classes and/or more benefits.

Financial underwriting can also be crucial in illustrating and quoting disability insurance. Our DI team looks for how much current coverage an advisor’s client may have in force, but it’s important to take it even further at times. For example, if someone is an owner of an S-corporation, and has employer-paid group DI, the financial underwriting may be different depending on the percentage of ownership. If the client owns less than two percent then the financial underwriting will be similar to that of an employee, but if the client owns more than two percent the financial underwriting will be based on the non-passive owner income underwriting rules. The issue and participation rules for individual disability companies will vary based on existing group coverage and if the group coverage may be taxable or not taxable. If the wrong assumptions are used, then the illustration may be incorrect. In addition, knowing and understanding the unearned income rules are important as well, as unearned income may be treated differently depending on the company. Our disability marketing team is constantly monitoring these dynamic and ever changing financial underwriting issues. Of course, a client needs to consult with their tax advisor on any issues involving taxes.

On the surface, health underwriting appears to be intuitive, as how different can it really be from life underwriting? We constantly have advisors telling our team that the client was preferred best for life underwriting, so there should be no need to be concerned about the DI health underwriting. In the individual disability insurance world, insurance companies can line item certain conditions and exclude them from coverage. Exclusions are not typical for traditional life insurance or long term care insurance, but for disability insurance it’s a very common occurrence. It’s important to recognize the conditions that can cause these exclusions to occur, such as mental/nervous conditions, prior health issues that were already resolved, chronic health issues, and muscular skeletal issues.

In summary, when quoting disability insurance, we’d recommend that you use a resource that understands the nuances of disability underwriting. In a game of inches, you need to get the first down in order to score.

Part One: Need Motivates Action

You have the perfect client for disability insurance, but for some reason the client chose not to protect his income. On your way back to the office from the appointment, you review what happened over and over in your head. Here you had a healthy, 40-year-old attorney making about $200,000, with two young children, a spouse who doesn’t work, and no group LTD coverage. You just placed a 20-year term for $2,000,000 and reviewed the disability insurance quote you brought with you to the appointment. You delivered the term insurance and then brought out the DI quote and placed it on the table as you talked about the product. The preferred- plus life insurance premium was about $600 per year and the disability quote was about $3,000 for $7,000 per month of coverage. You explained the coverage like a pro and started to fill out the application when the client suddenly told you he was going to take a pass on the disability insurance. On the way back to the office you think…that didn’t make any sense. What could I have done differently?

There are four basic objections in a buying decision, for really any product—insurance, cars, washing machines, and even your next meal: Need, Price, Confidence, Hurry. Walk through your decision process on buying a pair of pants. Price: Does the price justify the cost of the pants? If you really like them and they are the perfect fit and not too expensive, then sure. Need: You lost weight and none of your pants fit you…you need some new pants. Confidence: You pick up a pair of Levi’s pre-shrunk, probably confident they will hold up better than the no name brand that is on the discount rack. Hurry: You need new pants and you found the ones you like. If you put them back, someone else may buy them. Now, create a scenario where one of these items outweighs the others. For example, you fly off to a business meeting and the airline loses your luggage and you have important meetings the next two days. Now need and hurry may outweigh price and confidence. Another example is if you rented a car and on the way back to the airport you need to fill it up with gas, but there’s so much traffic you don’t want to stop because you may miss your flight. You know the car rental company is going to charge you extra to replace the gas, but you need to make your flight and are willing to pay the higher gas price so that you have peace of mind that you’ll make your flight.

Let’s get back to insurance. Need motivates action. Never start with the illustration of a disability product and never throw a spreadsheet in front of a client. Of course, you’ll get to the case design and premium, but first you need to learn about the client’s needs. Start with asking questions and listening. Ask your client, “What is the longest vacation you’ve taken in the last five years?” Most likely your client will say two weeks or less. Your reaction, “That sounds like a nice vacation, why didn’t you extend it or take another week or two?” More likely your client will say, “Well I had to get back to work.” Which leads you to say, “Walk me through what would happen if you couldn’t get back to work due to an extended sickness or couldn’t work again due to an accident.” Concentrate on the need and plan. Have your client visualize a bridge and on that bridge is all their monthly obligations: Mortgage, food, education, cars, utility bills—essentially the monthly budget. Now visualize what is holding up that bridge…the client’s paycheck.

What is the value of the paycheck? Well that’s obvious, right? $200,000 per year. Nope. For your client age 40 making $200,000 per year…and say he continues to make at least that much the next 25 years…that’s a value of $5,000,000 of earnings over the next 25 years. Would you insure a machine that would produce $5,000,000?

Let’s say that your client indicates that he has a couple million in savings and investments and therefore doesn’t need disability insurance. We are seeing more applications on older clients than we’ve seen in the past. Think about it: Interest rates are so low these days that it’s difficult for a fixed income client to survive on the proceeds of their investments. You may say, “But my client has averaged six percent with my investment strategies.” Then you have to ask yourself, what is the risk profile of a client who may never work again? Usually a working, young “risk-taker” client, that goes on to become disabled, changes to a fixed income “risk-averse” client. Therefore, even clients with a higher net worth need some disability insurance.

We’ll finish by asking you a question. If a client can no longer work, becoming completely disabled, then that client becomes similar to a client who is retiring. How many of your clients have gone from “needing to work” to “working for pleasure?” We are guessing not too many. Most of these “needing to work” clients need disability insurance in some form.