Why Disability Insurance is a Top Financial Product for Your Clients

When a client contacts you to set up a meeting, what’s on their mind? For some, it might be a life change that’s prompted them to think about life insurance or estate planning. For others, it’s the conversation to prepare for retirement, or to protect the assets of a new business venture. But how many clients reach out to discuss disability income insurance?

The answer? Not nearly enough.

According to a 2024 Social Security Fact Sheet¹, about one in four of today’s 20 year-olds will become disabled before reaching age 67, and entitled to Social Security disabled worker benefits. More concerning, 65% of the private sector workforce has no long-term disability benefits.

While the need is clear, clients have often proven reluctant to talk about individual disability income insurance, for several reasons:

• Avoidance: Some clients are simply uncomfortable thinking about the possibility of getting ill or injured, or don’t think it will happen to them.
• Confusion: Other clients are confused by the many choices of disability income insurance products and the cost of such insurance. Some mistakenly believe they’re adequately covered by employer-sponsored products or other government programs.
• Prioritization: For many clients, disability income insurance simply isn’t their top concern, opting to focus instead on life insurance, wealth building or asset protection.

The market is beginning to shift, however—and financial professionals looking to fully protect their clients and leverage this dynamic, high-value product are shifting with it.

Why talk about individual disability income insurance?

To see the value of exploring individual disability income insurance, you only need to look to recent headlines. According to a 2024 report by industry researcher IBISWorld², an aging population and awareness of the seriousness of disabilities has fueled industry growth over the last several years, despite the disruption of Covid-19 in 2020. Another study published in September 2023 by reinsurer GenRe³ indicated that total new sales premium in disability income insurance increased by 11% in 2022 over 2021, and total Guaranteed Standard Issue (GSI) new sales premium increased by 24%.

When you switch your perspective from the industry to the level of individual need, the picture draws more sharply into focus. A 2023 survey by PayrollOrg⁴ showed that 78% of Americans would struggle to meet their financial obligations if their paychecks were delayed for a week. Further, according to the Federal Reserve’s Economic Well-Being of U.S. Households in 2022⁵, more than a third of Americans said they couldn’t afford to cover a $400 emergency.

Maybe you’ve already had robust discussions with your clients about growing their wealth and planning for retirement, but what if an unexpected need for funds disrupted those plans? Working with your clients on an asset protection and income continuation plan could help ensure they’re covered even in the event of missed or reduced paychecks.

Given today’s dynamic—and volatile—economy, several factors are making the topic of disability income insurance relevant to your clients:

1. Gig economy growth: With more individuals taking on gig and freelance work in addition to their traditional employment, the idea of portable individual disability income insurance may be particularly attractive.
2. Pandemic aftereffects: The COVID-19 pandemic highlighted the sudden and unpredictable nature of health crises. Many experienced firsthand how quickly illness can impact the ability to work, raising awareness about the need for disability income insurance.
3. Economic uncertainty and rising healthcare costs: Fluctuations in the economy, such as those experienced during the pandemic, can make financial security a higher priority. With rising healthcare costs making the financial impact of a disability even more significant, the prospect of disability insurance can offer real income protection.
4. Greater awareness: Increased efforts to educate the public about the benefits of disability income insurance have led to better awareness and decreased confusion about the product. Plus, newer products targeted to a wider audience are increasing accessibility to this powerful tool.

At Ameritas, our disability income insurance products help provide income protection for the various types of clients you work with. DInamic Cornerstone is common with white collar professionals and executive-level employees. DInamic Fundamental is common with middle income earners and homemakers. Learn more about these products on our website.

How to talk about disability income insurance

If you’re working with an employer considering the value of including the offer of individual disability income insurance for their employees, the advantages are clear. Individual disability insurance can help companies recruit and retain valuable employees without requiring them to bear the burden of compensating a disabled employee. These plans can be employer paid or voluntary, and can be extremely flexible.

For the individual considering purchasing disability income insurance, the conversation is all about emphasizing the value of income protection. Just as your clients would protect their home or auto—or their lifetime’s worth of savings—they want to ensure that they’ve adequately protected their ability to earn.

Specifically, individual disability income insurance offers the following advantages over group long-term disability programs:

1. The possibility of stronger policy provisions.
2. Full portability even if they leave the company.
3. Higher income protection (of particular advantage to highly compensated employees) that can potentially cover total compensation vs. base salary only.
4. A streamlined application and underwriting process.

As an Ameritas financial professional, offering our GSI products provides several advantages to you as well – giving you effective cross-selling opportunities with high earners, a high return on investment for your time and a strong commissions and bonus program. To learn more about our disability income insurance products and sales support, contact us today.

Disability income insurance is issued by Ameritas Life Insurance Corp. and Ameritas Life Insurance Corp. of New York.

Sources and References:
¹SSA Fact Sheet
²IBIS research
³GenRe
⁴Payroll.Org
⁵Federal reserve