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It’s a Great Time to Work in the Income Protection Market

Posted by The DIS Sales Team on Wed, Sep 27, 2017 @ 08:09 AM

income-protectionAre you bullish on your DI sales for the rest of the year? Key economic indicators along with insights from consumers forecast a favorable environment for income protection sales.

Improving economic indicators

Earlier this month, the Census Bureau announced that the median U.S. household income, $59,039, increased two years in a row. The average household income is now at $69,629. The same analysis indicates that household wealth increased, now at more than $1.7 trillion. Increases in the value of financial assets and higher property values contribute to the household wealth increases. The unemployment rate is predicted to fall to 4.3 percent by year end, GDP is growing, and inflation is contained. Together, these pointers illustrate a healthy economy.

Record breaking IDI sales year

2017 year-to-date sales for individual disability insurance are up 13 percent according to LIMRA. That is the highest growth since LIMRA began tracking disability sales. Group disability sales, short and long-term are also up 3 percent and 1 percent respectively. More importantly, voluntary sales continue to grow. In fact, Eastbridge Consulting Group, reports that in the voluntary market it is the non-benefit brokers who are producing the greater sum of new business annualized premium.

Challenges remain

The economy continues to improve, and disability insurance sales are breaking records. Like a three-legged stool, a third component is crucial to a successful end of year sales push. In this case, the third leg is a receptive client. MetLife’s 15th Annual US Employee Benefit Trends Study uncovered that less than half of surveyed employees believe disability insurance is a must-have coverage. In the past, we’ve suggested using the term paycheck protection or income protection when introducing the coverage. Many clients are simply unaware of the protection, how it works, and the very real risk of suffering an illness or injury that would interrupt earning a paycheck. Yet, the strong sales numbers confirm that many financial professionals have overcome this objection to successfully communicate the importance of disability insurance to secure financial stability.

Keys to success

Lincoln Financial Group asked 2,500 adults about financial goals and perceptions. It turns out those with clearly defined goals and a plan to reach them not only were more optimistic about their financial security, they made greater progress to reaching those goals. As Yogi Berra said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”

What group is most likely to have clearly defined financial goals? Millennials and Gen Xers! Exactly those who are approaching the prime time in life to purchase income protection. These same groups repeatedly state that when considering insurance coverages, their preference is to work with a financial professional. And, in turn, those who work with a financial professional are more likely to have goals and a plan.

Finally, once you’ve made the case for disability insurance, help the client project the real economic impact of being unable to work for as little as three months. A simple example: using an annual salary of $100,000, without disability insurance the household income would be short $25,000 gross income. How reasonable is it to self-insurance this shortfall? This client would have to save $5,000 for five years to replace the lost gross income. The average American household annual saving rate is five percent, in this case $5,000, leaving little for anything else. Compare that to the average DI premium which costs one to three percent of income.

Make 2017 your record-breaking sales year for disability insurance sales. DIS has the products and resources to help you. Call us today.

Topics: income protection