Most clients never stop to think about the risk of being disabled while they can still earn an income.

“They tend to believe that nothing can happen to them when they’re healthy or young,” says Tim Landry, an independent, Montreal-based living benefits consultant. “And they often believe their employer’s group insurance will provide them with adequate benefits if they’re disabled.”

The question to ask clients is: could you survive a sudden loss or interruption of your regular stream of income? If the answer is “no,” then it would be appropriate for you to talk to that client about disability insurance.

Here are some ways to approach the subject.

> Ask: could you afford to pay your bills if you couldn’t work?

Typically, some, but not all, individuals might have savings stashed away for emergencies. What you want to establish is how much of a shortfall would they have if they couldn’t work, suggests Lawrence Geller, president of L.I. Geller Insurance Agencies Ltd. in Campbellville, Ont.

> Make them aware of the risk of disability

Most clients play down the risk of becoming disabled. You could make them aware of the probability — without instilling fear — by pointing out certain facts.

For example, a 20-year-old man is three times more likely to be disabled for at least 90 days than he is to die before age 65, and a 35-year-old woman is seven times more likely to face disability than death before age 65, according to the Canadian Life and Health Insurance Association. To make matters worse, if disability lasts for at least 90 days, it is likely to last, on average, three years or more for a 35-year-old man or woman, and four years or more for a 45-year-old man or woman.

> Tell them about their options

DI replaces about 70% of income earned from employment. A number of different types of disability policies are available, but the best bet is to suggest a guaranteed non-cancellable policy, which cannot be terminated by the insurer until the client turns 65.

“A small premium is well worth the coverage offered by DI,” says Susan St. Amand, president of Sirius Financial Services in Ottawa.

> Remind them that group plans might not offer sufficient coverage

While many of your clients might be covered by group insurance, you should still assess whether they need supplemental disability insurance coverage, as many group policies provide only limited benefits. Disability benefits under a group plan may have ceilings, may not be based on an individual’s total income. Or they may be subject to qualifying periods — leaving the client at risk of an income shortfall in the event that he or she becomes disabled.

> Explain policy limitations

DI policies may have exclusions on coverage based on pre-existing health conditions; limitations on length of coverage; maximum benefits payable; conditions under which benefits will be paid; or other restrictions. Some may have benefits that are indexed to inflation, and most may have a waiver on premiums payable during the period of a claim.

> Tell them when DI would kick in

Your client’s income would be replaced generally on four conditions: being disabled to do their own job; being unable to work in their own occupation and choosing not to take an alternative job; being unable to perform any suitable occupation based on their education, training or experience; and becoming totally or permanently disabled.

Waiting periods vary and will affect premiums. Landry recommends choosing a low, 90-day waiting period. “You will not save a lot by going for a 180-day waiting period,” he says.

> Know who not to target

DI is highly recommended for most working people who would be financially challenged by a disability.

But there are some clients to whom you should not recommend DI. They include: low-income earners who cannot afford the premiums; people over 60 (coverage ceases at age 65 with most policies); clients who are independently wealthy and can survive the cost of disability; and individuals with a high level of “unearned” income, such as rental or investment income.