What’s Your Greatest Economic Asset?

It is your ability to make a living.

FF-PHOTO/SHUTTERSTOCK.COM

By Brian Ashe, CLU

When most people are asked what their greatest economic asset is, most of them would respond: “My house” or “My 401(k) plan.” Yet, the reality is that for the largest portion of our population, their greatest asset is their ability to make a living, to be employed and to generate a paycheck.

This is because without a paycheck, the house mortgage doesn’t get paid and the 401(k) deferrals never happen. Most of us run our households on two paychecks a month—and most of us would be in big trouble if those paychecks stop for even a short period of time.

Aside from being laid off or fired, the primary threats to those paychecks are getting sick or hurt and not being able to do our jobs any more. In fact, studies show that approximately 49 percent of mortgage defaults in the U.S. are attributable to medical problems. And a 2018 study commissioned by Life Happens (What Do You Know about Disability Insurance, Life Happens 2018), notes:

• Seven in 10 employed Americans would feel a financial pinch in one month or less without their paycheck.

• 54 percent of millennials say they would be in a financial pinch in less than 2 weeks.

• Only 20 percent of working Americans say they have disability income (DI) insurance.

This is a recipe for financial disaster! In my career, I have had 33 clients experience disabilities, which made them eligible for DI insurance benefit payments. One high-earning client is in his 25th year of claim and has received about $5 million tax free dollars to put two kids through medical school, put another child through Notre Dame Law School, maintain his lifestyle and never have to invade his other assets early to accomplish this. His family’s economic life went on, even though his paychecks stopped.

Whether a client is earning $80,000 a year or $400,000 a year, a portion of that income has to be protected.

But whether a client is earning $80,000 a year or $400,000 a year, a portion of that income has to be protected. So what should you say to your prospective clients about protecting their paycheck? Do we overwhelm them with statistics?

My suggestion is to simply ask them some questions — questions that give them choices.

Ask them questions like: “Would it make a substantial difference in your lifestyle if you didn’t have $200 a month?” (probably not) “Would it make a substantial difference in your lifestyle if you didn’t have $4,000 a month?” (Sure. couldn’t make my mortgage or car payment or put food on the table, etc.) “Well, if you give me $200 a month (the DI insurance premium), we can make sure you continue to get $4,000 per month to pay your bills if you got sick or hurt. Can you think of any reason you wouldn’t do that?” How long has it been since you asked that question of your clients?

May is Disability Insurance Awareness Month

Disability Insurance Awareness Month (DIAM) is this May. And if you want some really engaging and fresh resources — from videos, to social media posts, to research studies — to help you tell the story of the need for paycheck protection, go to www.lifehappenspro.org/diam. This is your source for the best life and disability consumer education material our industry has ever produced.

As noted above, consumers really need an “awareness” refresher. And most clients buy on emotion and justify their decision with the facts. Life Happens has resources for both rationales and can be your most important asset during Disability Insurance Awareness Month!

Brian Ashe, CLU, is president of Brian Ashe and Associates, Ltd., in Lisle, Ill., and the 2012 recipient of the John Newton Russell Memorial Award. A past president of MDRT and a past chair of LIFE, he may be contacted at bashe29843@aol.com .