Great Responses to Disability Insurance Objections
Tuesday, July 14, 2015
How many times have your clients told you that they don’t need disability insurance because they already get it through work? Plenty, no doubt. Instead of rolling your eyes in exasperation (we never recommend eye-rolling), try responding with one of these questions to help your clients better understand what DI is and what it can do for them.
Could you maintain your current lifestyle on 60% of your income?
Walk your clients through a budget that reflects a 40% salary reduction. It often isn’t pretty. Some of your clients may have sizeable savings and investments that they can draw from if they were to become disabled, but if they don’t, a cut that drastic could mean financial ruin in very short order. Another issue for your clients to consider is that many employer-offered DI plans are subject to taxes, unlike individual policies.
Does your disability insurance provide a benefit until you return to your current career or until you can work again in any capacity?
This is an important distinction that not many people are aware of. Even if they do have long-term disability insurance through their employer, your clients may lose their benefits when they are deemed able to work in any capacity. Most likely they anticipate that with disability insurance they’ll receive benefits until they can return to their current occupation. This would certainly be a rude realization in the event that they were to become disabled. Ask your clients who run small businesses, practice law, or work in the medical industry if they would be fulfilled in any other occupation. Most likely they will tell you that they would not.
Do your bonuses factor into your household budget?
Regardless of the size of an annual bonus, most people have specific plans for where it will go and what it will buy. It may be slated for a family vacation or it could be destined for retirement savings. Find out if your client’s employer-offered plan accounts for bonuses; most likely it does not. If the bonus is an important part of their annual income, your clients need a policy that includes bonuses in the definition of “salary.”
Getting these important misconceptions cleared up can open a pathway for discussion about better income protection.
Contact us anytime with questions about working with your clients to protect their paychecks. We’re always happy to brainstorm ideas for conveying accurate information about disability insurance.