LIFE INSURANCE DISABILITY
High-value Benefits for Highly Valued Employees How to help your clients close their income protection gaps
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By Paul Wickline
ou have your renewal meetings penciled in for next fall—time to sit back, right? Not so much, especially if some of those clients have highly compensated employees or partners. In fact, now is the perfect time to pivot back to those clients and give them a clear look at whether they’re doing enough to help all their associates protect their most valuable asset: their ability to earn an income. Three points of protection Let’s back up a minute and talk about financial wellness and risk management. Think of it as a triangle with three essential points to make it complete: • Savings and investments if they live a long time • Life insurance if they die early • Disability insurance if the unexpected happens and they can’t work Your clients probably have 401(k)s and term or permanent life insurance in their employee benefit packages. They might have group disability coverage, too, but there are two key differences: access and portability. Employees can go online or pick up the phone and buy their own life insurance at near the same cost their employer
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offers it (and most often, for much less and with higher benefits). Same thing with savings and investments, where banks and financial advisors abound to help them set up plans with a variety of retirement options. But disability coverage is different. Employees can’t buy income protection insurance on their own at anywhere close to the cost of buying it through work. And they can only access this valuable coverage without medical evidence at the workplace. Not only that, if it’s a group long-term disability plan, they’ll lose their coverage if they leave the employer. That’s why your clients need to help all employees protect their income if they become sick or hurt and can’t work— providing needed protection for future years, even if they change employment. Paint a clear picture This is why now—after the W-2s are out—is the ideal time to reconnect with your clients. They’ve just seen a complete view of their employees’ current incomes, so gaps in protection for all income are easier to spot. One way to paint this picture is plotting income and age on a scatter diagram, then looking how many annual incomes fall above and below the $200,000 line. We set our metaphorical Mendoza line there because the most popular disability plans.
- CalBrokerMag.com -
MAY 2020