It’s All in the Fundamentals

I try to frequently remind myself that importance in most matters of life is always in the fundamentals.  The basic nature of insurance these days is what’s truly important for Americans.

Personal disability insurance is one of those elementary financial needs of any professional, and in a perfect world should be as commonly prescribed as healthcare and life insurance.  That ideal is not the reality. 

Disability coverage is the most important piece of insurance that every working American should own.  So why then is there such an extreme emphasis in this country on other products while DI sales fail in comparison?  Don’t get me wrong, life and medical insurances are critical to everyone’s financial protection and should be held in esteem in a sound financial plan – but more so than income protection?  Not a chance.

If you have able-bodied clients between the ages of 18 and 75, they should have at least 65% of their income protected with comprehensive “own occupation” disability insurance.  No negotiation.  That is the bottom line.  As advisors, we need to think more about the financial wellbeing of our clients and their families during this post-pandemic era.

Most Americans suffer from the delusion that they will not become disabled during their lifetime.  As insurance industry professionals, we know that is not true.  Over a quarter of working Americans will be affected by a short or long-term disablement during their career.  Yet only 31% of those working in the private sector have any form of income protection insurance.  Why do we feel impervious to accidents and to the thousands of medical conditions and diseases that can harm the human body to the point of disablement?  Well, it seems that’s simply human nature to feel relatively invincible, and it is up to you the advisor to educate and guide your client through the proper planning not only for retirement, but throughout their income accumulation years.

That is when most of future financial problems take foundation, in the first two-thirds of our lives.  We don’t save enough of our earned income.  Expanding retirement vehicles have brought promise over the last quarter century, but Americans still don’t save enough for emergencies let alone retirement.  One-third of working Americans have no retirement savings.  How can we expect to financially survive in this world while supporting our families without any savings or income protection?  We can’t.  We need personal disability insurance.

Personal DI is available to persons who work for a living.  If not through traditional insurance channels, there are sources of income protection for those who may fall outside the realm of “usual” insurability, including impaired-risk clients, those with hazardous occupations or those with moderate to severe mental or physical health concerns.

Income protection programs and product lines are readily available to help safeguard your clients from the health disasters life throws at them.  Disablement is real and it happens to millions of Americans every year.  Take good care of your clients and don’t neglect the fundamentals.