The Disability Income Coffee Talk

For working Americans, finding a way to make all the financial ends meet is as challenging as it has ever been. People are making hard choices and this is especially true for America’s working middle class.

For years, we’ve used the term “blue collar” to refer to this demographic. The stereotypical blue collar worker may be skilled or unskilled; they may work in a factory or in the trades, or perform other types of manual work. Of course there are a rainbow of other collars being worn today.

Pink - jobs stereotypically associated with women like cosmetology or nursing.
Gray – transitional jobs like computer support technicians or manufacturing supervisors.
Green – jobs in the renewable energy industries.

Regardless of collar color, the working middle class has a lot of similarities. Many economists define the working middle class as families with annual incomes ranging from $35,000 to as much as $110,000. Others define the working middle class based in more sociological terms. The Economic Policy Institute has said this group can be defined by their aspirations: like buying a home in a safe neighborhood with good schools for their children; having access to quality medical care; setting aside money for educational needs and a family vacation; and saving for retirement. Roll it all together and these traits represent the basic tenets of the “American Dream” and all of them are dependent on one thing, the ability to earn an income.

We all know there are many things that can impair your clients’ ability to work. The most recent economic malaise has reinforced the value of a good job as so many have found themselves unemployed due to the recession.

However, it is reasonable to say there is one cause which is more insidious than all others. When disability strikes it will hit your client like a heavyweight’s best knockout punch, putting them on the canvas with no hope of struggling up to beat the count.

We can argue statistics until the late hours of the night. I submit to you it doesn’t matter if the odds are one in ten or one in a million, when it happens to your client the aftermath will be devastating. The economic turmoil will quickly consume their lives. When income stops, dreams quickly die.

So how do we reconcile these two issues?

According to the American Payroll Association’s 2008 survey, "Getting Paid in America” 71% of all Americans are living “paycheck to paycheck” with little ability to absorb the financial knockout blow of a disability.
The Social Security Administration’s 2007 Fact Sheet states that 70% of working in the private sector have no long-term disability insurance.

Clearly we have a problem, our working class clients need every penny of income they make, but without spending a little of it to weave the safety net, they are perilously exposed when disability strikes.

The Disability Income Coffee Talk
Here’s a strategy which you may find effective with current clients who haven’t purchased disability insurance. I call it the Disability Income Coffee Talk.

First, invite your existing client to share a cup of coffee, tea, a soft drink or even bottled water with you. After you settle in, it might go something like this…

“Ted, I wanted to spend a few minutes with you today to ask you about something that has been disturbing me. I need to know, if you get sick or hurt and can’t work, will you or anyone in your family call me? Not to just let me know what has happened, but will they have expected us to have done any planning in regards to how you will be able to keep paying your mortgage, car payments or to find cash for groceries and other necessities”.

If Ted says “no”, then respond…”Ted, that’s good news because I was really worried about that. So tell me, who will they call?

This simple question will provide you with some valuable information. If Ted gives you the name of another financial professional, you’ll know you have competition for business.

If Ted says the family will call the employer, you now have an opportunity to ask if you can help review this plan or better yet, get Ted’s permission to reach out to his employer for more information about the plan.

“Ted, I would like to review your employer provided benefits for you. You see, surprises are fun for your birthday or during the holidays, but they are definitely not fun when you are sick or hurt and find out you don’t have the benefits you thought you had. Let’s make sure there are no surprises waiting for you when you least want them”.

If Ted gives you the answer we most expect to hear, that the family has no one to call because there is no plan, then you need to get his permission to volunteer for the job.

At some point in this conversation Ted will likely tell you he doesn’t have the money to fund his safety net. This is when the following statement may be effective.

“Ted, many of my client’s feel the same way you do now. You just can’t see how you can commit to another expense. Ted, you can’t afford to not take a hard look at this issue. It may not be as expensive as you may think. Let me illustrate how easy it is to get started.

We’ve been enjoying a coffee (tea, soft drink or bottled water). I would guess that most families have one of these somewhere during the course of most days. Maybe it’s only $1.50 for a cup of coffee or it might be the special mocha treat on the weekend. If you think about it, that might come to $30 to $40 a month or more. Did you realize we can use that same $30 to $40 and greatly improve your financial position when you get sick or hurt and can’t work? Then your family will have someone to call when you can’t work who will be able to bring a check and not a bill. Ted, I want to be that person!”

There are over 100 million working Americans who don’t have private disability insurance. The market is too large and the stakes are too high for you to ignore. Start by sharing a cup of coffee with your existing client who is most at risk. Both of you will be glad you did!

The Disability Income Coffee Talk