May is Disability Insurance Awareness Month in the U.S. It’s a commendable annual campaign that Individual Life carriers should take note of.

Nearly everyone knows that Life insurance is a guarantee that families will be provided for in the event of a loved one’s death. But are your clients really prepared for what might happen to their families if they become sick or injured and can no longer earn an income?

The stats suggest not. One-third of working adults in the U.S. are without any type of Disability insurance other than a standard Social Security Disability benefit.¹

Just over one quarter of today’s 20‑year-olds will become disabled before they retire.² Yet, only 40% of U.S. households have sufficient savings to cover at least three months of recurring expenses.³

What happens if they are out of work for 12 months? (Or, 3 years?) Where will their income come from?

At Gen Re, we believe this protection gap can and should be closed. It is why we designed a plan – a Disability Income Rider for your Life policies – that is affordable and can be tailored to meet individual needs.

By adding a Disability Income (DI) Rider to an Individual Life product, a life carrier can provide customers with the valuable income protection they might need one day. It’s a great way for carriers to strengthen relationships with clients and, at the same time, enhance their life sales.

But where to begin in offering a DI Rider?

Gen Re has developed a turnkey solution for carriers that may not have in‑house disability expertise. We can provide the policy form, an application, and rates along with expert administration (underwriting and claims) oversight.

Designed specifically to be a low(er)-cost monthly indemnity offering, a DI Rider can be added to an Individual Life product in the same way as other living benefits are offered today.

A proper solution can be designed to broaden an Individual Life carrier’s portfolio with a simple sale option of an expanded income and asset protection product for the customer and ultimately their family.

The Rider covers a loss of income due to a sickness or accident that has left the insured unable to perform the duties of their occupation. The Rider includes features such as a monthly benefit amount that is non-integrated with other income sources. The benefit amount can range from $1,000 to $3,000 per month. This will provide a level of income replacement to help the insured cover basic expenses like food, a mortgage or rent, and/or car payments. The benefit amount could also supplement an employer’s group coverage or other Disability income protection plans as an additional benefit depending on the insured’s income loss.

When pursuing a DI Rider for your Life policies, it is important to be cognizant of the benefit amount, the benefit duration (months or years of needed payments), elimination period, and integration options. Having options will be important as you tailor the DI Rider to your customer’s income protection needs.

At a time of continuing economic uncertainty, protecting your client’s income should be a talking point when discussing a well-rounded financial plan. Adding a DI Rider to your Life insurance sale will only enhance the protection you are providing to your client.

Reach out to learn more about adding a DI Rider to your Individual Life portfolio.

Endnotes

1. American Council of Life Insurers, Assessing Americans’ Financial Retirement Security, unpublished data from study released in September 2017. ACLI found that 54.3% of non-retired households (51.3 million in total) did not report having disability insurance. Assuming there is at least one adult in each household, the number of “uncovered” adults is at least equal to the number of “uncovered” households; and “Total employment and the unemployment rate in the United States from 1980 to 2021, with projections until 2027,” https://www.statista.com/statistics/269959/employment-in-the-united-states.
2. Council for Disability Awareness; Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1999, https://www.ssa.gov/oact/NOTES/ran6/an2020-6.pdf, Table A.
3. Federal reserve, “Money in the Bank? Assessing Families’ Liquid Savings using the Survey of Consumer Finance,” FEDS Notes, November 19, 2018, https://www.federalreserve.gov/econres/notes/feds-notes/assessing-families-liquid-savings-using-the-survey-of-consumer-finances-20181119.htm, Table 1.