May 24, 2021 | By Jessica Tuman – ThinkAdvisor
If you view disability insurance (DI) as paycheck protection insurance, why is it that two thirds of working Americans report that they don’t have DI? Is it not offered by their employers? Or is it because they don’t understand the short- and long-term value of DI?
When faced with employees’ skepticism around DI, advisors should help them understand what DI does, breaking down their coverage options and the implications of each.
Many people think of disabilities as happening to someone else — either at birth or end of life, but the chances of an adult becoming disabled are higher than one might think; in fact, it will happen to just over one in four of today’s 20-year-olds before they retire, causing them to miss work for an extended period, and a paycheck. And, accidents aren’t the only cause of disability among adults; back injuries, cancer, heart disease and other illnesses cause the majority of long-term absences.
Once an understanding of the likelihood of a disability is established, providing a comprehensive overview so individuals understand the role that their employer-sponsored DI program plays in meeting their needs and how it strengthens their financial planning — whether or not they currently have a disability or medical condition — will lead to more employees opting for DI coverage. In turn, this will help employees feel more confident and secure about their financial future.
There are three ways to help employees understand their DI coverage.