It’s Easy to Protect Your Most Valuable Asset
Wednesday, June 15, 2016
There are a lot of things in your clients’ lives worth planning for and protecting. They buy insurance to protect their important assets such as their homes and cars. No doubt they plan decades in advance to ensure that their children can go to the universities of their choice and to guarantee that they’ll be comfortable in retirement. But all of that depends on their most valuable asset: current and future income.
Planning ahead to protect income is so fundamental and so simple it’s shocking that only 28 percent of US earners do it, according to a 2014 survey by the Council for Disability Awareness.
Another surprising fact about disability insurance is that while only 28 percent of American workers have adequate coverage, more than 75 percent list their income as a key asset to protect. What could be standing in the way of logical thinking about DI?
There are two misconceptions that cause rational people to make irrational decisions:
1. I’m healthy, my job isn’t dangerous, and I take good care of myself. Nothing will happen to me.
Unfortunately, long-term disability is more common than most people realize:
· 90 percent of long-term disabilities are caused by illness, not accidents.
· Just over 25 percent of today’s 20-somethings will become disabled before they retire.
· More than 8 million workers received disability payments in 2012.
· More than 50 percent of disabled workers are between the ages of 18 and 64 — prime working years.
2. It’s too expensive.
The cost of disability insurance will vary depending on your income and your policy but a general rule of thumb is between 1 and 3 percent of your salary. So, if you are making $50,000 a year, your premium could be as low as $500 annually or just about $40 per month.
It’s important to help your clients see the flaws in these ideas. Just like protecting our homes, cars, and retirement years, we all need to plan for and protect our incomes.
Call our office anytime with questions about selling long-term disability insurance to your clients. We’re always happy to help.