DISABILITY INCOME
4 DI Misconceptions from page 46
Misconception 2 :
Student loan repayment plans are not at risk
Student loan payments are another frequently overlooked element of disability insurance protection , and in many instances student loan payments must be continued even during a disabling accident or illness , either by your client or any family member who may have co-signed a loan with a private lender . Many insurance companies have begun to introduce a loan repayment rider that will reimburse the insured for their monthly contributions up to a maximum monthly amount and a maximum pay-out . The greatest difference in these contracts will be how they define what is a disabling event . It ’ s very important to evaluate if the policy will provide a benefit only if the insured is out completely with no expected return , or if coverage is provided even for short term events , or if the insured is able to return to work in a limited capacity .
Misconception 3 :
Not everyone needs a disability policy
The most common — and challenging — misconception that advisors face when discussing disability insurance is that people don ’ t understand the risk of being disabled or that an accident or illness will impact more than their ability to pay their bills . According to a recent MDRT poll , 69 % of consumers are unaware of how high the likelihood of becoming disabled before retirement age is for young adults . Everyone , no matter their age or ability level , needs coverage for a potential disability , because it is impossible to predict when someone may become disabled and need insurance coverage .
Nearly every other insurance policy is at risk without obtaining adequate disability coverage , as most policies are contingent upon the client ’ s ability to make their premium payment .
Misconception 4 :
Business owners ’ companies will not be affected
Running a business can be a very lucrative , but expensive proposition , and business owners often overlook how their absence will impact the business ’ s health and viability . Too often advisors and agents fail to let business owners know about policies that will insure ongoing expenses , such as payroll , rent , equipment leasing , licenses , advertising and employee benefit packages .
Learning about and providing disability insurance can require an investment of time , but learning about the intricacies of these policies will improve how you advise clients and communicate the benefits that will protect them in the long run . Nearly every other insurance policy or investment strategy is at risk without obtaining adequate disability coverage , as most policies are contingent upon the client ’ s ability to make their premium payment or contributions .
If you aren ’ t comfortable discussing this important coverage with your clients , seek out a trusted peer or industry wholesaler who has experience providing these contracts . Bringing in a knowledgeable resource is a great way to quickly address the risks to your client ’ s financial well-being and gain an in-depth understanding of the complexities of this coverage . The benefits that you ’ ll receive in the end will make the time you invested worthwhile and leave you with the knowledge that your clients are well protected .
48 Perspectives Q4 2021