Educate Clients About the Risk of Disability

For most of your clients, nothing is more foundational to their financial security than the ability to earn an income. It is their income that funds every other aspect of their financial plans. And one of the biggest threats to that income is the likelihood that an illness or injury will leave them unable to work for an extended period of time.
But for years, research has documented that American wage earners significantly underestimate their chances of suffering a disabling illness or injury. New research conducted by the nonprofit Council for Disability Awareness reveals that even employers—those who determine whether to offer and promote income protection benefits—suffer from similar misperceptions.
In its newest study, Disability Divide: Phase III, CDA surveyed in-house human resource benefits professionals, the people who most employees depend on for information about their risks and benefits.
What are the odds? In predicting the average odds of disability, almost 40% of the surveyed HR benefits professionals predict the risk of disability at one chance in 100, a significant underestimation. Contrast that with Social Security Administration statistics that show the typical 20-year-old has a one in four chance of experiencing an income-interrupting disability before retirement.
How long could a disability last? Employees estimate disabilities to last longer than employers. In fact, 66% of HR benefits professionals estimate a disability would likely last three months or less. But 68% of wage earners thought a disability would span a year or more. Industry claims studies show it’s more than two and a half years (31.2 months).
Where is the divide? In one troubling finding, 73% of the surveyed HR benefits professionals said their employees viewed their income as their most valuable resource. However, just a quarter (26%) of those surveyed thought their employees felt preparing for disability was important, and only 26% said they thought their employees were actually prepared for a disability.
You can help bridge the knowledge gap, which reinforces the need to raise your clients’ awareness of the risk of disability—and the importance of offering (and choosing) disability insurance to minimize its financial impact.
Raise your clients’ awareness of what’s at stake. Step one is getting clients to recognize how critical their income is to their financial security. One way to drive that point home is to encourage them to estimate their lifetime earnings potential. The CDA has developed a tool that enables people to calculate their own earnable income quotient, or EIQ.
Offer clients a realistic view of their disability risks. As recent CDA studies show, both your individual and corporate clients are likely to underestimate the chances of becoming disabled. To combat these misperceptions, point them to an easy-to-use, online tool called the personal disability quotient calculator, which enables them to estimate their own personal chances of experiencing an income-threatening injury or illness.
Engage them in learning. To help advisors engage clients in a topic most would prefer to avoid, the CDA and its member companies have developed an interactive website called Defend Your Income ( In this virtual martial arts dojo, visitors can learn more about the different types of income attackers—and fight them off in an interactive game. They can also hone their income-defense skills through a series of educational quizzes. Some advisors are even linking to this site from their own websites or mentioning it in their social media posts as a fresh new way to broach the subject.
Spread the word. The CDA offers agents, brokers and financial advisors an entire toolkit of resources available at Defend Your Income. From there, they can download a variety of tools to use with both corporate and individual clients, including presentations, emails, posters and preprogrammed Web icons.
These initiatives are just part of what trusted advisors can do to show working Americans how serious illness and injury can put their incomes at risk—and what they can do to protect their paychecks.
Barry Lundquist is the president of the Council for Disability Awareness. His professional background includes more than 30 years of sales leadership experience in the disability insurance industry, senior executive management and consulting roles for employee benefits and individual disability products and sales channels at Paul Revere, Provident and Unum.