The brokerage industry counts among its legions (albeit aging and declining in number) the buying public’s best financial security sources available. Independence allows advisors the best possible solutions to the myriad challenges presented to individuals, families and businesses seeking financial security against both recognized and perhaps unforeseen threats. Life insurance, annuities, trusts, retirement vehicles, major medical, medical savings plans, LTCI, vision, dental, legal—even pet insurance. All can be woven together to provide mitigation of risk and, often, investment gain tailored to each individual’s priorities, goals and financial situation. But each and every plan requires at least one common ingredient to allow them any realistic chance at success: funding.
For the vast majority of clients and potential clients, that means earned income. Without income to fund it, the most sophisticated and intricately tailored plan can collapse, leaving clients not only unprotected but, realistically, in a situation where years of premium payments and contributions run the risk of being viewed as effectively wasted. Granted, many life and annuity contracts have riders, provisions and other mechanisms that can offer a measure of protection if that coverage happens to have been selected, but few non-linked products provide for the expenses of daily living that one’s income routinely covers, nor the additional, unplanned expenses that inevitably arise from a significant disability—either accident or illness.
It is my belief that the vast majority of insurance agents/advisors feel an ethical responsibility at the least, and often an emotional tie to the individuals, families and businesses they’ve diligently worked to protect—those entities that have consequently allowed them and their families the measure of comfort they currently enjoy. Don’t agents/advisors owe it to themselves and their clients to pursue with equal diligence the protection of their income and protection against the many unplanned expenses that can accompany a severe illness?
The Council for Disability Awareness (www.disabilitycanhappen.org) has a wealth of information available on the likelihood, causes and financial hardship associated with a disability. One small example:
Chances of becoming disabled:
The following statistics come from CDA’s PDQ disability risk calculator:
A typical female, age 35, 5’4”, 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
• A 24 percent chance of becoming disabled for 3 months or longer during her working career;
• with a 38 percent change that the disability will last 5 years or longer,
• and with the average disability for someone like her lasting 82 months.
A typical male, age 35, 5’10”, 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
• A 21 percent chance of becoming disabled for 3 months or longer during his working career;
• with a 38 percent chance that the disability will last 5 years or longer,
• and with the average disability for someone like him lasting 82 months.
Unplanned out-of-pocket expenses for a critical illness can cause stress, not only on the clients themselves, but on the funds available to maintain the financial plan as well. A portion of lost wages not mitigated by DI coverage, lost wages for a family caregiver, medical expenses including deductibles, co-pays, prescription and non-prescription medicines, out-of-network visits and medical equipment, and non-medical expenses such as travel to appointments, home accommodations/modifications, caregiving, housekeeping and special diet.
I urge you to revisit the planning you’ve diligently set in place for your valued clients and see if their income is adequately protected and if they might need additional funds to face the uncovered costs of a critical illness. If your practice does not allow for DI or CI sales, seek out a working relationship with a product specialist in these areas. Three independent associations dealing exclusively with DI or CI: The International DI Society, www.internationaldisociety.com; the American Association for Critical Illness Insurance, www.criticalillnessinsuranceinfo.org; and the National Association for Critical Illness Insurance, www.nacii.org. [SPH]
Houston area superstar and great friend of Broker World Tom Archer, president and owner of Elite Marketing Group, was honored recently by the Society of Financial Service Professionals Houston Chapter, receiving the 2013 Benjamin “Woody” Woodson award, presented to an individual from the Houston insurance community in recognition of meritorious service to the insurance industry and community.
“Tom is a perfect choice for this honor,” said Jo A. Casady, SFSP Houston president. “He embodies the true spirit of this award by giving his best to clients, colleagues and community. We are pleased that the Society of Financial Service Professionals Houston has recognized his contributions to the industry.”
Elite Marketing Group is a brokerage general agency in operation since 1987. Archer has been an active member of the SFSP since the mid-80s, serving as the Houston chapter president in 2001-2002, during which time the chapter received the Medal of Honor. He and his wife Donna live in Houston and are very active members of the community.
Congratulations, Tom, and well deserved! [SPH]
