If you had an asset that was worth millions of dollars and vulnerable to common losses, wouldn’t you want to insure it? A person’s paycheck can easily be worth millions of dollars over the span of a career, and it is vulnerable to cancer, stroke, and many other common causes of disability – but many people take it for granted. To sell disability insurance effectively, you need to convey the true impact of income loss.
Disability Insurance vs. Other Insurance Products
Although most people probably aren’t enthusiastic about insurance, they do at least recognize the importance of coverage. Disability insurance can be a harder sale despite the fact that it provides valuable coverage.
- People aren’t required to buy coverage. People are required to maintain car insurance under state law, and car loan and mortgage companies also require car and auto insurance. Disability insurance, on the other hand, is not actually required. It’s just a smart idea.
- People don’t think disability will happen to them. Although most people don’t like thinking about death, they still recognize that they are mortal, so they understand the importance of life insurance. Many people have a harder time accepting that they could become disabled – even though disability is twice as common as death among working aged individuals. The Social Security Administration says one in eight 20-year-olds will die before reaching retirement age, while one in four will become disabled.
- People underestimate the value of their paycheck. When people think about their paycheck, they tend to think in terms of hours or weeks. At most, they’ll think in terms of years. However, they almost never think about how much they stand to earn over the course of their career. As a result, they underestimate the value of their paycheck, and they may be reluctant to spend money protecting that paycheck.
Calculating the Value of a Paycheck
According to the U.S. Bureau of Labor Statistics, the average hourly wage is $35.93 as of February 2025. If you earn $35 an hour, you can expect to take home $1,400 a week if you work 40 hours and $72,800 a year if you work 52 weeks. But that’s just one year. If you continue this throughout a 40-year career, you’re looking at $2,912,000.
This is a simplified approach to a person’s earning potential. For one thing, it assumes no real time off. It also assumes you don’t earn a single raise over the course of your entire career. Despite this, the point is clear – the average worker has a huge earning potential. With any other asset worth nearly $3 million, insurance coverage would seem like a no-brainer!
And because these calculations are based on the average wage, many professionals have significantly greater earning potential. They’ve also invested a lot into their careers, in terms of time and effort as well as money. The Education Data Initiative says the average federal student loan debt balance is $38,375.
How Much Do Your Clients Stand to Lose?
If your clients are used to thinking about their income in weekly or biweekly increments, they may be grossly underestimating how much their paycheck is worth. To make a strong case for disability insurance, help them see their expected earnings over the remainder of their career. It may be much greater than they realized!
Then ask them how losing that income would impact them.
- How would their lifestyle change? Would they be able to afford their house, their car, or their vacations if they could no longer depend on a steady income?
- How would their future plans change? Would they still be able to afford their dream retirement, or would they still be able to pay for their children’s education?
- How would they deal with the disability while also facing financial hardship? Even with health insurance, most people face out-of-pocket costs, and these can add up during a serious illness or injury.
Help Your Clients See Clearly
The Implications of Income Loss handout is the perfect way to show your clients the true value of disability insurance. This handout shows the cumulative value of a working person’s income. It also includes information about the risk of disability, educational investment, and the domino effect of income loss.
You can use this non-branded handout in your presentations, or you can send it before or after a presentation to give your clients something to think about. Download your copy.