Disability Insurance Replaces Income

If the COVID-19 pandemic has taught us anything, it's that our income is extremely important! We all need our income to pay bills. Many Americans would tap their savings or investment accounts to pay their bills if they couldn't work. According to the U.S. Social Security Administration, around half of those people would only have enough money to pay bills for six months or less.*

Are you asking your clients what they would do if they lost their income due to an illness or accident? If you are not, you should be! Disability insurance (DI) is often an overlooked part of a sound financial plan. One-third of working adults say that they would consider obtaining income protection if they knew more about it.*

Whether you primarily sell health or life insurance, your clients depend on their income to pay their bills, and that includes premium payments. Help them keep their financial life in balance with disability income insurance. And if helping your clients isn't enough incentive, advisors who offer DI to their existing clients earn 30% more income than advisors who don't.

May is Disability Insurance Awareness Month. Make sure you take advantage of this time to offer this important insurance to your clients and prospects. An income sustains a lifestyle and supports all financial assets, so it makes sense to protect it.

*U.S. Social Security Administration, Basic Facts, June 2016

Specialized Planning Needs an Ideal Solution

Families who have loved ones with disabilities require specialized planning and should consider a properly funded Special Needs Trust with life insurance as an effective way to address their unique and specific needs.

When dealing with a disabled child, the two most important goals are to provide for the child’s needs and simultaneously provide financial protection for the assets that are set up to meet those needs. Basically, a trust is a legal entity through which the legal ownership of property is separated from the right to benefit from the property. The legal title to property that is placed in trust belongs to the trustee but the trustee is legally obligated to use the trust property only for the benefit of the trust’s beneficiary.

Life insurance is an ideal vehicle to fund a special needs trust. This is because the death proceeds become immediately available at the deaths of the parents. So the policy selected should provide level premiums, increasing cash values and contain provisions that will sustain the policy in the face of the parents’ inability to pay premiums due to old age or disability. A whole life or universal life type policy can provide increasing cash values to maintain the policy during the parents’ old age and a waiver of premium provision can cover the parent’s disability.

Daily life brings unique challenges and joys for families with special needs. Caring for disabled loved ones may leave little time for anything else, and creating a long-term strategy can seem like a daunting task. By creating a properly funded Special Needs Trust with life insurance, you can help your clients create a source of funds to provide essential care in an unexpected event.

Get Solutions for Special Needs Planning here