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How much Life and Disability is Enough?

Bob Maruska
LTC & DI Specialist

I recently read an article in a trade journal talking about a 33 year professional female with an annual income of $150,000. The article was looking at her future and how her income would be increasing by 3% for the next 35 years. The article told us that the Human Life Value would be between $13 and $15 million by age 70. 

We have all heard of the human life value. As an insurance representative, you would use multiples of the client's income. An income of $150,000 for 30 or 35 years will come to $4.5-$5.3 million of coverage. But it's when we place a 3% growth factor on our income, that we really see the true impact. My first question is: why do we show growth on the investments but not for life insurance? We need to remember that the life insurance completes the plan should the insured have a serious health issue or an early death from an accident or a serious illness. We need to use the tools available to us by the different vendors and carriers to show our clients the impact of annual increases in salary.

Here are the interesting facts that came out of that article. The young female professional only had $50,000 of group life term - no individual coverage. She had a 5.1% chance of dying before age 65. She only had a $1,000 monthly disability plan and that plan was a SHORT TERM plan (6 months). The chance for a disability claim for her age is a one in six chance. The average length of that disability claim is 6.5 years. This is a very common situation with the average consumer.

85% of consumers agree that there is a need for additional life insurance coverage, but only 62% of consumers have some life insurance - and the majority of that coverage is group insurance. The most interesting number is this: only 36% of American families have any life insurance coverage. So two-thirds of all consumers are our prospects. The need for additional coverage is there. We need to ask more people about an insurance update or review. Remember: your health is your financial plan. A major change in your health can have very major impact to your future financial plans.

The market and the sales are waiting for us. We are under-selling and leaving business on the table. We are leaving additional compensation on the table. The FHC website Term Quote Engine has an insurance need calculator. Once you have that figure, remember to add the 3% inflation for growth.

What about the Disability Sale? Click below for two very helpful PDF files that help you show the importance of disability insurance coverage.

We are here to assist you with any questions or quotes!

BOB Maruska | LTC & DI Specialist   636.695.2826   bmaruska@FIRSTHEARTLAND.COM

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