Income Protection: Are You Asking These 3 Questions?

Understanding disability statistics is important. But insight into how consumers think about disability can lead to a conversation that truly resonates. Consider starting a dialogue with your clients by asking these key questions.

1. How long could you survive without your income?

The divide: 65% of consumers say they could survive without their paycheck less than a year, and most say they'd depend on sources like sick or vacation leave, a partner's income, or debt. This is an overly optimistic assumption, because usually these sources are inadequate. For their part, advisors (88%) recognize that consumers are even worse off than they believe.

The takeaway: Consumers' perceived safety nets are often full of holes. Many funding sources they reference would not cover living expenses for an extended period. What's more, most people don't understand their disability insurance coverage—or even know if they have any.

Why it's important: Most everyone's financial security depends on their income, so any complete financial plan must address how to protect it. The good news? Consumers are more open to a discussion about protecting their income than ever before.

2. What do you think the chances are that someone will become disabled during his or her working career?

The divide: 83% of consumers say "a disability could happen to anyone at any time." Only 35% of advisors thought consumers would agree with this statement.

The takeaway: Consumers think disabilities occur more frequently than advisors assume they do.

Why it's important: People who depend on their income may be more open to discussing ways to protect it than you think. There is real opportunity to engage consumers in conversation about maintaining financial independence if illness or injury strikes.  

3. What do you think your chances are of becoming disabled?

The divide: While most consumers believe that "disability could happen to anyone at any time," they think their own chances are only one or two in 100. Many advisors estimate those chances as high as one in 10.  Both groups would be surprised to learn that the actual odds of missing work for an extended period of time due to a disability are as high as one in four during the average working career.

The takeaway: Denial almost always makes consumers believe others' disability risk is higher than their own. However, consumers who knew someone who had experienced a disability rated their own risk as higher.

Why it's important: Advisors who find ways of making the risk personal will find that consumers are more likely to take steps to protect their financial security. Ask whether your client knows anyone with a common condition such as back pain, heart disease, or depression, to get consumers thinking about disability protection. .