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The Rough Notes Company Inc.



June 27
09:43 2018

The reason consumers should buy disability income protection is the same reason agents should sell it

As statistics will reveal, it happens all too often: an unexpected illness or injury occurs and the income we live off—the money that pays our mortgage or rent, that buys our food, and that goes to other expenses—disappears. And it doesn’t really make too much difference if the disability lasts a month or goes on five years or longer.

The loss of an income will usually place a great strain on the ability to handle essential expenses. In fact, more foreclosures occur from someone becoming disabled than someone dying!

Just as one can’t insure a burning house, the time for disability insurance is not when you need it, but before.

You as an insurance agent know first-hand how important it is to protect what’s important to people. And few things are more important to working individuals and their families than financial security.

A friend’s story

Not too long ago, I was talking to one of my friends about his financial security. Good disability specialist that I am, I asked him a few questions—things like how he’d continue to pay his personal daily living expense (food, rent, etc.) if he were unable to work for any length of time because of a disabling injury or sickness; whether he knew how much money would still come in each month following a disability; and from what source it would come.

I shared some stats. For instance, I told him that if someone is between the ages of 35 and 65, their chances of being unable to work for 90 days or more because of a disability are between 30% and 35%. And while it is true that some people can rely on disability benefits from their employers and/or the government, for a great many workers—too many, in fact—income stops when work stops!

The questions I posed piqued my friend’s interest in protecting his income, and that opened the door for me to explain that disability income protection insurance is designed to replace lost income when injury or illness happens. He asked for more details, and I gladly shared that the protection can provide a tax-free guaranteed income if he becomes sick or injured, on the job or off, and is unable to work at his occupation.

You, as an agent, may know—but he didn’t—that policies can be designed with several options: One option, for example, pays insureds while they’re working on a reduced basis that results in a loss of income; with a COLA option, the monthly benefit amount will be increased to replace what inflation erodes from the benefit’s buying power; and another option—the best in my mind—lets insureds get more coverage even if they became uninsurable after taking out the policy.

I further explained that disability insurance helps protect a family from financial catastrophe by providing income to help meet daily expenses, and can come in various forms—one of a variety of employer-paid (we call it group disability) products; government-sponsored programs that generally are cost-free (but taxable) to the worker; and private policies, paid for by the insured, that protect their income when no other applicable coverage exists or when available programs do not adequately meet their needs.

At this point, I knew he was interested in getting an income protection policy, and we set up a meeting for the following week, where we would discuss the concept in more detail and address how much coverage the family might need.

As fate would have it, a couple of days before the scheduled meeting, he had a terrible accident—skidding off the road on a rainy night. Thankfully, he lived through the accident. But he broke his neck, which was expected to put him out of work for at least 12 to 14 months.

After learning about this terrible event, I visited him immediately after he was discharged from the hospital. With his wife standing next to him by his bedside, I asked if there was anything I could do to help. The only thing I could think of was, “Why didn’t I have him apply for the insurance last week, while we were together discussing the need?”

He told me he only had enough money saved up for a couple months of living expenses. He knew that, in his situation, getting any kind of a loan would be nearly impossible. And without one, he, his pregnant wife, and his three children would be facing a foreclosure down the road.

Unfortunately, we both learned a lesson. Just as one can’t insure a burning house, the time for disability insurance is not when you need it, but before.

The author

Larry Schneider, a disability specialist with more than 45 years of experience, is owner of Disability Insurance Resource Center. He is a founding member of the International Disability Insurance Society and was involved in rewriting The American College’s disability insurance manual. Schneider has authored an “Encyclopedia of Disability Insurance” manual, which he says will help to make a new agent an overnight expert. Reach him at, (800) 551-6211 or (cell) (703) 615-4747. For more information, visit


  1. It is a great door opener that places you above your competition.
  2. There’s very little competition.
  3. First year commissions (50%) and renewals (10%) are outstanding.
  4. Persistency is solid.
  5. There’s no need to re-quote every year; rates are guaranteed.
  6. Doing so helps you avoid being sued after a disability occurs and your client says, “Why didn’t you recommend this type of coverage to me?

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