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The need for disability insurance throughout the U.S. is staggering.

According to a 2020 Insurance Barometer Study by Life Happens and LIMRA, nearly two-thirds of working Americans (63%) couldn’t go six months without a paycheck before financial difficulties would set in. Fourteen percent say problems would be immediate.

Registered Investment Advisors (RIAs) are uniquely positioned to shine a light on this disparity and help their clients take action to establish safeguards for their financial futures.

Though not nearly as heralded as life and long-term care, disability insurance has incredible potential for clients who have yet to reach their full earning potential.

It stands to reason that financially stable clients with long term goals might eye equally long-term coverage, particularly as they near retirement age. Younger individuals, however – especially those who own businesses or who are recent graduates of law and/or medical schools – may stand to benefit significantly from disability insurance, as their projected earnings may exceed millions over the course of their lives.

As an RIA, you can spotlight the importance and need for disability insurance, and how it can be positioned to benefit your clients long-term.

  • Reach them with a reality call: As far as investment options go, life insurance policies have far more “pizazz,” and are, for the most part, more easily underwritten. For younger clients, however, the chance of needing disability coverage is much higher.

Younger clients who are not high-earners and have plenty of loans to pay off, may not have disability coverage on their radar at all. Protecting their income is not high enough on the to-do list. For them, primary focuses may include paying off student loans and possibly stashing money away for retirement. RIAs can help to position disability insurance as a critical means of protecting one’s income in the event of the unplannable, such as a debilitating injury or illness. It may take a stark reality call framed with one simple question: “How long can you and your family survive without your regular income?”

  • Broach the topic of buy-sell and key person benefits: Talk to your business-owning clients about protecting future ventures—and their income—with key-person disability insurance and disability buy-sell agreements.

Disability insurance is a critical – albeit frequently overlooked – means of business coverage. Without adequate coverage, risk ensues. The proper disability coverage can protect against the financially devastating effects of a partner who becomes disabled and continues to draw a check without contributing to the workload.

Belman Klein Associates serves as your collaborative insurance partner, assisting you as you build stronger relationships with the professionals you advise. We specialize in walling off insurable hazards and providing optimal protection against those risks. Let us know how we can help you or become a partner to access additional services and features through our secure member portal.