What is Disability Insurance?

Disability Insurance is an income protection policy that provides monthly benefits to supplement the loss of wages during an unforeseen injury or illness. Disability Insurance is designed specifically to help cover those basic expenses while your clients recover from an illness or injury and protect the things that are most important to them.

If your client loses income for an extended period, how will that time gap affect their home, their family and their savings and retirement? Without a plan or disability insurance product, a family could lose their home and put a strain on their budget to make ends meet. Some people think of disability insurance as “paycheck protection.”

Disability insurance functions like many other insurance policies in that your client pays a set amount at regular intervals and in exchange, he/she receives benefits if he/she uses the policy. The monthly benefit can help protect their home since a mortgage or rent payment is often a significant monthly expense.

Each client’s situation is different. AIPMA has an experienced Business Development team to discuss product differences, answer questions, and generate illustrations to help you show life insurance product options to your clients. Contact our Business Development Team at (800) 783-5206, Prompt 2 or marketing@aipma.com.

Facts/Trends About Disability Insurance

• In 2022, over half (53%) of consumers said they need DI coverage, and 22% said they intend to buy DI coverage in the next year. *
• Half (49%) of consumers indicated their households would face financial hardship in 6 months or less.*
• 24% of consumers say they would turn to their retirement savings should a disability befall them.*
• LIMRA research shows the majority of consumers have no insurance against a disability and would need to tap into other sources of financial assistance, which threatens their long-term financial goals.*
• Only 40% of US households have enough in liquid savings to cover at least three months of their recurring expenses, and only 28% can cover at least six months.**
• Three out of ten American adults indicate they can’t pay an unexpected $400 bill without having to carry a balance on their credit card or borrow money from friends, family, or the bank.**
• One in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.**
• Each year around 5% of working Americans will experience a short-term disability (six months or less) due to illness, injury, or pregnancy. Almost all of these are non-occupational in origin.**

*Source: 2022 Insurance Barometer Study, LIMRA and Life Happens

**Source: Council for Disability Awareness