Disability income insurance-while influenced by the same trends that drive growth in supplemental health products such as critical illness, accident, hospitalization and gap insurance-has a marketing history that is more complex than that of these other products.

Some brokers of disability income, for example, have centered their practice on serving high-income professionals such as doctors, dentists or athletes, or using disability to fund buy-sells in small corporations. But disability's appeal extends far beyond these elitist occupations.

"Those who live paycheck to paycheck are extremely vulnerable to disability," says Casey Shirley, national sales manager at American Public Life, which sells short-term disability income protection on a voluntary basis. "They can be well served by an affordable short-term disability plan.

"Many of the brokers we work with today weren't offering supplemental plans like disability until recent years," Shirley continues. Now, he says, "a number of them have been able to supplement their declining major medical revenues with voluntary benefits, and disability is one of the most widely needed voluntary benefits in the market."

Shirley adds that voluntary disability can help employers by possibly reducing their sick pay expenses and workers compensation claims.
Opportunities to serve the needs of both employer and employee simultaneously are especially evident in the group long-term disability market. Commercial property/casualty brokers would recognize it as simply good risk management. The Standard, an Oregon-based disability carrier, exemplifies this kind of approach with its absence and disability management program called Workplace Possibilities.

Brian Kost, the program's senior director, explains, "For more than 10 years, we've been focusing on how to help keep employees at work and productive-avoiding a disability leave-or to help an employee return to work after a disability leave. There are a number of things a disability carrier can assist with, especially when it comes to complying with ADA regulations and providing accommodations to help support an employee in the workplace.

"Working with a carrier that offers disability management assistance can take work off both the broker's and employer's plates, and help position a broker as a consultative resource who is looking out for his client's best interests," Kost emphasizes.

The Workplace Possibilities program provides an expense benefit up to $25,000 per employee to pay for accommodations that can help keep a disabled employee at work or enable the employee to return to work after a disability. This can include performing ergonomic evaluations; recommending devices that adapt to employees' needs or work modifications; and training supervisors on recommended workplace changes. Notably, the program includes consultations on accommodations for employees with mental health as well as physical conditions.

One instance when the program kept an employee from going on disability involved a large school system client. The employee was experiencing back, neck and wrist pain that prevented him from sitting at his desk for more than 15 minutes at a time. The Standard's Workplace Possibilities consultant helped coordinate recommendations from physical therapists and medical professionals, then determined the kinds of adjustments to his work area that would help alleviate the pain at work. Equipment, installation and other vendor costs totaled more than $3,000-which was covered under The Standard's Reasonable Accommodation Expense Benefit.

The Standard makes the workplace consultants available to group long-term disability clients regardless of size.

"Recently," Kost relates, "we assisted with a return-to-work case involving a finance manager who was recovering from throat cancer and wanted to return to work. A Workplace Possibilities consultant collaborated with him, his medical team and the employer toward the end of treatment to discuss a sustainable plan."

The consultant found that even with a modified schedule and working at home, the employee was too tired during rounds of chemotherapy and radiation and lost weight. She then recommended delaying the return to work, suggested he see a nutritionist, and connected him with his employer's employee assistance program to help with sleep problems.

"After a month, the employee's weight was up and he was sleeping better," Kost recalls. "The consultant renewed the return-to-work effort with a modified schedule, eventually helping him to return full time. The employer was able to welcome the employee back full time and fully healthy, due in part to the plan developed by the consultant. This approach not only helps take work off the employer's plate, it also helps ensure that all factors are considered to help the employee return in a way that doesn't negatively affect his recovery."

Focus on enrollment

Shirley of American Public Life notes the rising costs of healthcare and their effect on the disability market. "Today, fewer and fewer employers fund disability for their employees and have shifted the product to voluntary," he says. "Employees have only so much wallet share to allocate to their benefits."

So how does disability income compete for shelf space with all the other voluntary products that have grown in popularity as employers have raised deductibles and copays of their major medical plans? Shirley points out that the disability enrollment communication strategy is crucial.

"Disability is a product that is sold, not bought," he says. "This means that most individuals don't understand the need for a disability product. Many people mistakenly believe that workers compensation provides them with adequate income protection. Many individuals, especially younger people, can't envision a disability happening to them.

"We've found that one of the most effective strategies is to conduct group meetings where the need for a disability product can be conveyed. It's important to get prospective disability buyers to see how critical their paychecks are and how difficult it might be to go for even a few weeks without a paycheck.

"It's wise to keep the meeting short and concise," Shirley continues. "We recommend five to seven minutes for a simple product overview. It's important not to explain the product before you've communicated the need. Try to incorporate personal stories from the employer group, and illustrate how disability income can be the glue that holds families together in uncertain times.

"We work with the brokers who distribute our products to stress the importance of positioning disability early in a multi-product enrollment meeting agenda. When sold as voluntary, disability should be the first product discussed in the enrollment meeting while the employee's attention is at its peak."

He notes that in the overall market, "there's a trend toward self-service benefits enrollments. Few brokers take the time to conduct one-on-one meetings with employees. Without a full explanation of the product, many consumers overlook the value and protection it provides for them and their family."

To ensure the success of a broker's group meetings prior to enrollment, American Pubic Life provides presale materials that outline the importance of disability protection. Shirley recommends the use of infographics, posters and email communication to educate employees about the need for and affordability of disability.

The market for disability spans a wide range of industries and age groups. "We market almost anywhere our brokers take us," says Shirley. "Everyone who relies on a steady paycheck to provide for their family should consider disability income replacement. Those who are young may not have had time to build up a savings fund for emergencies. Those who are later in their careers will see the value of a disability plan that can protect their hard-earned retirement nest egg."

He stresses the need to "always qualify each applicant to ensure that you have a clear picture of the need, no matter what chapter of life they are in today."

Kost says brokers who serve the industries of manufacturing, education, and healthcare, as well as the public sector, have been drawn to The Standard's Workplace Possibilities program. "Many of the employees in these industries experience a number of physical demands or are performing jobs with repetitive motions," he notes. "The brokers who work with these clients have connected them to us in part, because we take a serious look at putting preventive accommodations in place to mitigate the impact these tasks can have on an employee."

Today's benefits brokers are marketing a wide variety of voluntary supplemental health products to help fill the void left by changes in major medical health plans. In doing so, they should not forget disability income. Whatever form the disability product comes in-long-term, short-term, group or voluntary-it protects against the risk of loss to a person's paycheck as the result of accident or illness. For most people, that's protection for their economic foundation.

A 2012 independent study co-sponsored by Unum and the Consumer Federation of America reported that 77% of working Americans would suffer great or moderate financial hardship if they were unemployed for three months. "We often say that if your paycheck is a necessity and not a luxury, you need disability protection," says Shirley.

The author
Thomas A. McCoy, CLU, retired in 2013 as editor-in-chief of Rough Notes magazine.