Do Your Clients Need a (Financial) HUG?
The demand for the almighty dollar. It’s something we’re all too familiar with, and for most of your clients, determining who gets each dollar takes some thought and consideration. After all, there’s only so much to go around. And unfortunately, insurance products don’t always make the budget.
But we always find money for our basic needs such as housing, utilities and groceries—in other words, for our monthly HUG. Of course, to afford those items, your clients need to have income coming in. And that income needs to be protected. That’s where disability insurance (DI) comes in. And it’s more affordable than you or your clients might think.
Fitting DI into the Budget
A DI policy replaces a portion of your client’s income if they become too sick or disabled to work. Because without an income, all those other necessities become hard, if not impossible, to afford. But everyone’s needs are different, so it’s important to discuss individually with each client.
Start with a look at your client’s monthly bills—those HUG items that are non-negotiable. Most likely they include a mortgage or rent, car payment, cell phone, internet, utilities and groceries. You might also see childcare or student loans. Add those up to see how much basic monthly expenses are, then aim to protect 60-70% with disability insurance. In many cases, a good portion can be covered by an employer’s group long-term disability offering. And then it’s up to you and your client to work together to protect the rest.
Group and individual DI policies go hand-in-hand to protect your clients, and many employers offer at least some coverage. Which makes open enrollment the perfect time to talk with your clients about what group coverage they have, and what supplemental coverage could be added to provide complete protection. To get started, let’s dive into the basic features of most DI policies.
Understanding DI
Although the choices and language may vary, there are some common components of all policies. Without getting too far into the weeds, here are some basic features to look for:
- Waiting Periods: the waiting period is measured in days, and it defines how long the client has to wait before benefits kick in. 90 and 180 days are the most common. Shorter waiting periods are more expensive but might be better for clients without enough savings to fund a longer wait.
- Total Disability: the policy pays when the client is disabled and can no longer earn a paycheck, but some policies will also pay a total disability benefit even if the client can work in a different occupation. It’s worth checking out for highly specialized clients.
- Residual Disability: Clients who can’t perform all their duties due to injury or illness but can perform some can receive a residual benefit that pays a portion of the total disability amount. Each policy will define what qualifies as residual disability.
- Specialized Riders: These optional riders are available to cover special situations, such as a student loan rider that will reimburse student loan payments in the case of a disability.
What’s great about the number of options is the flexibility they offer, allowing you to more easily fit coverage into your client’s budget. What’s not great is that more options can be overwhelming. Fortunately, we have a team of experts ready to help.
Call in the DI Experts
Instead of avoiding DI because you don’t know how to design the policy or aren’t comfortable explaining it, reach out to our DI team for help. They can help talk to your client, put a policy together, walk you through the features, find the best carrier, pre-screen your client, and most importantly, help you integrate DI into your client’s protection plan.
But the first step is yours. Add DI to your insurance conversation easily and naturally. It’s just one more layer of protection. Your clients will feel good about their plan and so will you. You might even want to give yourself a hug for a job well done.
Schedule an appointment with a DI expert or call the team today at (800) 589-3000.
