How can benefit advisers help boost participation for disability insurance?

“You gotta get a disability advocate,” says Keith Hoffman, vice president of disability insurance at NFP. Having someone in the firm who is promoting DI can be a huge asset, he says, especially for advisers who are busy concentrating on Affordable Care Act issues, renewals, etc.

Educating employees about disability coverage is essential to get them to enroll, Hoffman says. Addressing any gaps in coverage is part of that education. Some employees have a variety of earnings, but their DI might only replace part of a salary but not other earnings, he says.

A group plan’s benefit cap might not cover enough of the income for highly compensated employees, Hoffman says. Raising that cap isn’t the solution, he says, and it can actually increase the cost and risk for employers. A better solution is to have the employee purchase an individual policy, which protects the employee and doesn’t raise the cost to the employer, Hoffman says.

Thinking group coverage is enough is a common misconception among employees, Hoffman says. More than 20% of workers younger than 40 say they’re more likely to hit the lottery jackpot than suffer a disability, according to the Council for Disability Awareness. In reality, one in four of today’s 20-year-olds will become disabled before they reach 67, according to the Social Security Administration.

Unfortunately, Hoffman says, often times it takes firsthand knowledge for employees to understand the importance of disability insurance. For Hoffman, a diagnosis of prostate cancer changed his view on DI. A six-year survivor, Hoffman, who serves as a disability resource in support of more than 2,000 advisers, focuses on spreading awareness rather than just boosting participation. “Without your income … your assets go flat,” he says. “You can’t build on it anymore.”

DI is a good source of revenue

Some advisers believe there isn’t much of a profit to be made in this space, but that isn’t true, Hoffman says. Employees in the white-collar market are one example — they’re still in need of DI, he says. “They perceive that their group benefits are enough, and they’re not.”

Another misnomer is the reason behind disability leave — many believe injuries from accidents are most responsible. “The four major disablers happen to be sicknesses,” Hoffman says. In fact, illness accounts for about 90% of all disabilities, according to the CDA.

There’s a movement in the industry to rebrand “disability insurance,” which has a negative connotation, as “income protection,” Hoffman says. Much like life insurance, which really is a death benefit, referring to DI as income protection gives advisers a better chance to discuss this coverage as a protection against loss of wages, stability and security, he says.

Advisers should incorporate DI into every presentation and every renewal they have with a client, Hoffman says. “It’s not a difficult product to discuss. The servicing of it is minimal.” The key is helping a client realize “the value of owning the coverage is far greater than the cost of purchasing it,” he says. 

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