Benefits and Compensation

Individual Disability Insurance Offers Support and Flexibility to Clients During Unpredictable Times

As a financial adviser or broker, you evaluate clients’ unique needs to provide them with appropriate solutions that protect them from the unexpected. In a world where “one size fits all” insurance plans are sometimes the norm, it can be a challenge to find the right mix of solutions to ensure your clients are fully protected, which is why it’s important to include individual disability insurance (IDI) in your mix of products. 

disability insurance
Ekaterina79 / iStock / Getty Images Plus

IDI protects your clients’ income if they are unable to work due to injury or illness. It’s not enough for clients to be covered only in the event of their death. Clients can be sidelined for months or even years by an unexpected injury or illness. If a client can’t work for an extended period of time, how will the person pay bills? How will the client ensure he or she can pay for his or her house, cars, and the lifestyle the person is accustomed to? Demonstrating to clients how IDI can help them in a variety of situations can give them peace of mind and security in the face of the unpredictable. IDI can be a saving factor in a client’s financial life. 

Some IDI policies include a family caregiving benefit that pays policyowners if they take time off work to care for a family member with a serious health condition. Caring for a sick family member can be enormously stressful by itself. Juggling caregiving and job duties, or deciding not to work and to forgo income, adds another level of stress. Caregiving benefits can reduce the financial impact of income loss and medical expenses that can occur during that caretaking period.

Example: Unexpected Childbirth Complications and Commiserate Financial Burden

Here’s a hypothetical example of how family caregiving benefits can help. Take Jared, a trial attorney. When Jared’s daughter was born, doctors quickly discovered she had a heart defect. Jared’s newborn daughter underwent surgeries, hospital stays, and months of follow-up appointments, adding enormous emotional and financial strain to Jared’s life. Benefits from Jared’s IDI coverage helped make up for the income lost when he spent time away from work to attend physician appointments and to be with his daughter in the hospital throughout her extended recovery, providing peace of mind during an extremely trying time. 

Another benefit of most IDI policies is residual disability coverage. All IDI policies will pay a total disability benefit if an insured individual meets the definition of total disability and cannot work at all. Most also provide options for residual disability coverage, which will pay a portion of the total benefit if the insured individual can work some but not at full capacity. In most cases, residual benefits are payable if the insured individual is sick or injured and loses duties, hours, or income due to that disability. 

Example: Back Injury from Car Accident Leaves Employee Unable to Work

Let’s look at Jody’s situation as a hypothetical example of how residual disability coverage works as a benefit. Jody was working as an accountant at a small firm that required a lot of computer work when she sustained a serious back injury from a car accident. This left her entirely unable to work, and she collected total disability benefits. But as she recovered, she was able to return to work half-time. Her IDI residual benefits paid a benefit proportional to her income loss. This coverage gave her the support she needed to take time to heal before safely and gradually transitioning back into her normal work environment.

An additional aspect of IDI your clients will appreciate is a rehabilitation benefit. Under such a benefit, insured individuals on disability claim can ask the carrier to help pay for a rehabilitation program to help them return to work. Jody, who collected residual benefits, had a policy that included the rehabilitation benefit, too. As she recovered, the carrier paid for a sit/stand desk and other ergonomic accommodations to help her return to work. These modifications helped ensure she could return to work safely without hindering her recovery. Because of her coverage through IDI, Jody received ongoing support throughout her entire healing process.

Many carriers also offer an own occupation provision that allows specialized professionals to collect total disability benefits if they can no longer perform their specialized job due to disability but can work in another job. 

Example: Seizure Leaves Surgeon Unable to Operate

For example, let’s look at Jason, another hypothetical claimant. Jason was working as an orthopedic surgeon when he developed a seizure disorder that left him unable to operate on his patients safely. Jason is now a professor, yet he is still able to collect benefits because his IDI policy included an own occupation provision. If Jason hadn’t been protected under this policy, he might not have been eligible for benefits because he could technically perform a job in a different industry. 

As financial advisers and insurance experts, you know that flexible and comprehensive solutions can make a real difference in our clients’ lives. That’s why sharing IDI as an important solution to protect future income is so important. Help your clients better prepare if an unexpected injury or illness strikes. Because of your recommendation, they’ll have one less thing to worry about when facing a disabling illness or accident.