Are your clients prepared for a short term disability? We can’t prepare for a disability (unless it’s a planned leave of absence). Most disabilities are not planned; however, what will be your client’s plan when they have an “unplanned” disability? Consider some of the disabilities that cause a short-term disability:
1. Unplanned injuries 11%
2. Complications from pregnancy 8%
3. Digestive disorders 8%
4. Back disorders 7%
5. Cancer 7%
6. Normal Pregnancy* 19%
*Most credit insurance plans exclude normal pregnancy
These are common disabilities and no one is exempt from them. How we plan for the “unplanned” disability can make a difference in how it may impact the rest of our life. Some clients pay for additional short term and long term disability through work; although these may be pricey. The average annual premium in 2013 for an employer sponsored/group short-term disability insurance policy was $214 per person.* Many believe “it won’t happen to me” and don’t purchase the additional coverage, basically “self-insuring”. Not a very good financial strategy because the mortgage, car and bills still need to get paid…..as well as put food on the table. These are the questions that you need to ask your loan clients….what is your plan for the “unplanned”?
Short-term disability insurance pays a percentage of your client’s salary. A typical short-term disability insurance policy provides around 60% of the pre-disability base salary** and these benefits generally last between three and six months. Most short-term disability insurance policies have a “cap” meaning that an employee will receive a maximum benefit amount per month.
We may know this; however, how many of your loan clients do? The reality is this…..why not invest in affordable group coverage that protects the debt and use the other disability protection (they may have) for other necessities? Now that’s a good financial strategy you CAN plan for!
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