Top 10 Income Protection Questions

Most advisors don't spend a lot of time focusing on income protection. But you do pick up the phone and call our team. Rarely a day goes by when the Ash disability insurance experts are not answering one of the questions below.

Skim through the answers to better understand the product AND the process for Disability Insurance. These common income protection questions come directly from advisors like you and will help you protect your client’s greatest asset — their income.

1. What is the bigger claim area for DI claims?

Accident or sickness? Overwhelmingly, the majority of claims are due to sickness. Illnesses such as cancer, heart attack, or diabetes cause the majority of long-term disabilities. Back pain, injuries and arthritis are also significant causes.

2. How long does the average DI claim last?

Statistically, the average claim lasts about 32 months. Of course, when we’re talking averages that means some last longer and some could be a lot shorter. The important thing to consider is not how long a claim will last for your client, but what the impact will be on their overall financial health. Even a short time away from their income could make a lasting difference.

3. What percentage of disability claims are covered by worker’s compensation?

It might surprise you that only about 1% of claims are covered by worker’s comp. Since most DI claims are caused by sickness and most don’t happen at work, worker’s comp doesn’t really come into play that often when talking about disability claims.

4. How long does it take to get Social Security disability if your claim is approved?

It takes about two years to get a disability claim from Social Security. If your clients rely on their income, that’s a long time to wait. And, more than 60% of all Social Security disability claims are denied. So, after waiting two years for benefits, your client could then be told they don’t qualify.

5. Why are residuals so important to a policy?

Without residuals, a claim is paid only if it’s a total disability event. It’s key to understand that more than 80% of claims have some level of residual claim associated with them. Your client either starts the claim not totally disabled, and then becomes totally disabled later. Or they have the reverse happen—begin totally disabled and then gradually get better and prepare to start back to work on a limited basis. At that point the client is on residual claim, not able to work a full day. When we quote for your clients, we add residual benefits wherever we can, since they are so important to providing complete coverage

6. Can you explain the definitions of disability?

We see this one a lot, and it can be complex to try to answer. So instead of cramming a lot of technical jargon in here, we’d be happy to go over the definitions in detail for you (and your client) any time. Just give us a call. It’s an important question and one we want you to ask.

7. Why are there mental nervous limitations on policies?

It depends on the carrier, but generally, the biggest claim area for policyholders ages 25-45 are mental, nervous stress and anxiety claims. The carrier may mandate a limitation or offer an optional provision for these types of illnesses as a way to manage claims.

8. Is employer-provided group LTD enough coverage?

Because of the taxation of most group LTD plans, the maximum monthly benefit cap on the group plans and how the group plan defines earnings for the average client, group LTD coverage is not enough to protect your client.

9. Is coverage expensive?

We can design an affordable plan for your client, including adding a future benefit option that allows them to purchase more coverage without having to provide proof of insurability. We try to include this feature in every policy

10. What are the labs and exam requirements?

Many DI carriers have gone to what they call simplified benefit amounts, as high as $10,000 without labs based on the clients’ age. In addition, for W2 employees or business owners, not financial documentation is usually needed up to these limits.

While this isn’t an all-inclusive list, this is a good idea of questions we get on a regular basis. So, if you’ve called and talked to the team about them, you’re not alone. And if you have more questions, we’re here to answer those too. Just reach out to your Ash DI team and find out why income protection is such a big deal to your clients.