Accord­ing to recent stud­ies dis­abil­i­ty income is a ris­ing star in the employ­ee ben­e­fits mar­ket. This is due to a vari­ety of fac­tors. Most poignant­ly insur­ance com­pa­ny attempts to court and edu­cate employ­ee ben­e­fit advis­ers about the prod­uct, his­tor­i­cal­ly low nation­al unem­ploy­ment and finan­cial impact of the recent tax reforms.

In dis­cus­sions with suc­cess­ful finan­cial and employ­ee ben­e­fits pro­fes­sion­als across the coun­try, one of the com­mon traits observed is their abil­i­ty to adapt their busi­ness in the midst of mar­ket change.  To accom­plish this, pro­fes­sion­als must not only pay atten­tion to indus­try trends, but also antic­i­pate how to shift an orga­ni­za­tion­al process to max­i­mize pos­i­tive out­comes.  Of equal impor­tance is opti­miz­ing the client expe­ri­ence.  Exe­cut­ed suc­cess­ful­ly, this type of inno­va­tion will result in phe­nom­e­nal busi­ness rewards.

Is this dis­abil­i­ty income pro­tec­tion trend an oppor­tu­ni­ty wave you should ride?

When reviewed more close­ly, Dis­abil­i­ty Income Pro­tec­tion place­ments with­in the con­text of employ­ee ben­e­fits pro­grams is a triple-win sce­nario for today’s eco­nom­ic environment.

The employ­er wins because it enhances the abil­i­ty to attract, retain and recruit employees.

The employ­ee wins as they are pro­vid­ed easy and effi­cient access to more ade­quate­ly pro­tect their most valu­able asset, the abil­i­ty to earn income.

The advi­sor wins because these new prod­uct place­ments dri­ve new rev­enue and deep­en the engage­ment with the customer.

If your clients believe in pro­vid­ing tra­di­tion­al group long term dis­abil­i­ty cov­er­age to their employ­ees, they will like­ly engage in a dis­cus­sion per­tain­ing to enhanced dis­abil­i­ty income pro­tec­tion for exec­u­tives and key contributors.

In an April 2018 arti­cle fea­tured in Think Advi­sor titled, “Maybe Employ­ers Are Ready to Be Aware of Dis­abil­i­ty Insur­ance”, Alli­son Bell cites com­ments on two major dis­abil­i­ty insur­ance com­pa­nies’ recent earn­ings calls that secu­ri­ties ana­lysts see increased employ­er inter­est in adding to dis­abil­i­ty ben­e­fits. This is thought to be attrib­uted to the cur­rent state of the U.S. econ­o­my where near full employ­ment lev­els have con­vinced employ­ers that they have to do more to attract and retain good workers.

How can you posi­tion this opportunity?

  1. Focus On Incen­tive-Based Com­pen­sa­tion — Most group long term dis­abil­i­ty insur­ance pro­grams insure only base salary. How­ev­er, most exec­u­tives, sales pro­fes­sion­als and oth­er key con­trib­u­tors with­in an orga­ni­za­tion are com­pen­sat­ed beyond base salary alone. Bonus, own­er­ship dis­tri­b­u­tions, stock bonus plans, and oth­er fringe ben­e­fits add up to a sig­nif­i­cant por­tion of income unin­sured by the group dis­abil­i­ty insur­ance pro­gram. When dis­abil­i­ty occurs with­out any oth­er form of plan­ning beyond a group pro­gram, these valu­able employ­ees are left in a dev­as­tat­ing finan­cial state, dras­ti­cal­ly dis­rupt­ing their lifestyles.
  2. C‑Suite Engage­ment. Although dis­abil­i­ty income pro­grams are often imple­ment­ed by an HR Team, they may not always have influ­ence to make com­pa­ny deci­sions or rec­om­men­da­tions for ben­e­fit pro­grams. These pro­grams are most suc­cess­ful when the exec­u­tive team is engaged in the ini­tial dis­cus­sions for devel­op­ment. Focus on your clients where you have a strong rela­tion­ship with the C‑Suite to gauge their inter­est. After all, they are the most like­ly to ben­e­fit from this type of dis­abil­i­ty income pro­tec­tion program.

A Life Hap­pens recent study called “What Do You Know About Dis­abil­i­ty Insur­ance?” con­clud­ed 7 in 10 employed Amer­i­cans would have trou­ble in a month or less if they couldn’t earn a pay­check. This sta­tis­tic empha­sizes the impor­tance of dis­abil­i­ty income pro­tec­tion insur­ance and why advis­ers need to be talk­ing to clients about their options.

If you would like to dis­cuss dis­abil­i­ty income pro­tec­tion more in-depth, please con­tact your local  UBA Part­ner Firm.

Orig­i­nal­ly pub­lished by

By Nicole Blodgett