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May is Disability Insurance Awareness Month (DIAM) in the U.S., which means it’s a good time of year to bring consumers’ attention to an often misunderstood and overlooked product. In the spirit of this campaign, I would like to share a few thoughts on the importance of Disability insurance and how insurance carriers and agents can change the conversation about income protection.
When we talk about the struggle to get people thinking about Disability insurance, it seems at least partly due to a knee-jerk reaction to disability itself. The idea of becoming disabled just isn’t taken seriously; instead we tend to revert to our youthful thinking, when we felt invincible. As adults, we understand the possibility of becoming disabled; however, we feel that it will never happen to us. Case in point: 61% of Americans say most people need Disability insurance, yet only 26% own it.1 It’s important that consumers see reality when it comes to thinking about a potential disability, and the role insurance plays, as they focus on their health and the implications of recovery.
Below are a few ideas to consider this May to get consumers thinking realistically about Disability insurance:
1. It starts with the name. Whoever thought of the term “Disability” insurance was obviously not in marketing or sales! We don’t call Life insurance “Death insurance,” so why would we use the term “Disability”? Luckily, the industry is starting to catch on. In fact, I’m seeing the term “income protection” or “paycheck protection” more often - certainly a better representation of how this insurance product serves the customer. Getting consumers to think beyond the name itself could help with some negative reactions or assumptions that come up before the conversation even begins.
2. Redefine what’s important. If I were to ask you what you think people typically consider their most important asset, what would you say? Their home? Their car? Or perhaps their bank account? If you hear any of these responses from a potential customer, I would challenge them. Why wouldn’t the individual consider the ability to earn a paycheck most important? Think about this for a moment: Without a weekly paycheck, the ability to pay a mortgage, make the car payment or contribute to the bank account goes away. Income is the basis for all other financial aspects of one's life, yet it’s often taken for granted.
3. Clarify where to find protection. I’ve often heard this when talking to consumers about what would happen in the event of a disability: “I am covered at work through Workers’ Compensation.” Unfortunately, 90% of all disabilities are not work-related and since they happen outside the workplace, people are not covered by their Workers' Comp plan.2
Some people also have a false sense of security and believe that the government will step in to help in the event of a disability. They look to Social Security as their safety net. Yes, Social Security does have a Disability benefit; however, the average benefit is minimal and the process is lengthy and complicated.
Clarifying for a customer what he or she can expect for protection is key to helping the customer realize the coverage gap and to get real about the need for Disability insurance.
Focusing on Disability insurance each May is extremely important. However, disability awareness is a year round endeavor that requires insurance carriers, reinsurers and producers to constantly educate the public about the need, and present them with adequate solutions.
Every May the Life Foundation joins forces with others in the insurance industry to raise awareness about the importance of income protection. Visit their website for tools and resources.
