The Value of Disability Insurance: Protecting What Matters Most in Financial Planning

Kurt Braundmeier
Apr 22
5 min read

By Kurt Braundmeier | Disability Income Protection Specialist | kurt@bakerbirdwell.com

When we think about financial planning, several familiar topics tend to dominate the conversation—retirement portfolios, life insurance, estate planning, investment strategies. These are crucial elements of a secure financial future. But amid the buzz surrounding compound interest calculators and tax-advantaged accounts, there lies a cornerstone of protection that is too often overlooked:

Disability Insurance. Or, as I like to call it, Income Protection.

While your clients may be well on their way to securing a comfortable retirement, and perhaps even covered by a life insurance policy, many have a gaping hole in their financial armor—one that could put everything they’ve built at risk with a single illness or accident.

As financial advisors, you’re in a unique position—not just to grow and manage wealth, but to protect your clients’ ability to create it. That’s the critical role disability insurance plays. It doesn’t just protect against the loss of money. It protects the engine that generates the money: your client’s ability to earn an income.

The Reality of Disability Risk: It Happens More Than You Think

Let’s start with a jarring statistic. According to the Social Security Administration, over 1 in 4 of today’s 20-year-olds will experience a disabling event before they retire.

Let that sink in. That means if you’re advising ten clients in their 30s, statistically, at least two or three of them will suffer a disability that prevents them from working for an extended period.

And yet, fewer than 40% of Americans have any form of disability insurance coverage. Why is that?

In my experience, the most common reason is denial. People tend to think:

“It won’t happen to me.”
“I’m healthy.”
“That’s for older folks.”

Others believe they’re already protected—maybe through workers’ comp or Social Security Disability Insurance (SSDI). But that’s a dangerous misconception. Most long-term disabilities aren’t caused by workplace accidents; they’re the result of illnesses—cancer, heart disease, mental health conditions, autoimmune disorders.

And SSDI? While valuable for those who qualify, it provides only a fraction of a typical income—and often comes with stringent eligibility criteria and long approval timelines.

The Financial Impact: When Income Stops, Everything’s at Risk

Now let’s do some math.

Imagine one of your clients earns $100,000 a year. Over the next 20 years, assuming modest growth, that’s over $2 million in lifetime earnings—not even accounting for raises, bonuses, or career growth.

Now imagine that income disappears overnight. No warning. Just gone—due to a sudden illness, injury, or medical condition that makes working impossible.

How would they:

Pay their mortgage or rent?
Cover day-to-day living expenses?
Fund their children’s education?
Maintain retirement contributions?

The answer, too often, is: they wouldn’t.

Without disability insurance, most families are forced to:

Dip into savings or retirement accounts prematurely.
Take on high-interest debt.
Sell assets or downsize their lifestyle dramatically.
In some cases, depend on family or government assistance.

Disability insurance is not a luxury. It’s the safety net that keeps everything else from collapsing.

A Real-Life Scenario: When Preparedness Makes All the Difference

Let me share a true story. One of my clients, a high-performing sales professional in her late 30s, had the foresight to secure an individual disability insurance policy early in her career.

Years later, she was diagnosed with multiple sclerosis—a progressive condition that forced her to step away from her high-stress job. Her world turned upside down. But because she had disability insurance, her income didn’t stop.

Her benefits kicked in, allowing her to:

Keep her home.
Maintain her medical treatments.
Avoid dipping into retirement savings.
Stay financially independent while she focused on her health.

That’s the power of preparation. That’s the value of income protection.

Advisors' Role: A Holistic Approach to Wealth Protection

As financial advisors, you are entrusted with more than just managing portfolios. You’re helping clients design a future. A life they’ve dreamed of. A legacy they want to leave behind.

Disability insurance isn’t just another product. It’s a foundational pillar of that future.

Think of it this way:

Retirement planning is about later.
Life insurance is about the unknown.
Disability insurance is about now.

It protects what clients are earning today, so they can continue to pursue what they’ve planned for tomorrow.

And best of all? It integrates seamlessly with the products and services you’re already offering. It supports their IRAs, 401(k)s, and savings strategies by ensuring income remains steady, even when life throws curveballs.

Common Objections—and How to Overcome Them

You may hear it all the time:

“It’s too expensive.”

“I’m healthy—I don’t need it.”

“I already have some through work.”

Let’s unpack these.

1. “It’s too expensive.”

Sure, cost is always a consideration. But disability insurance typically costs 1-3% of annual income—a small price to pay to protect 100% of earning potential.

Use analogies. Ask your clients:

Would you insure a $2 million home? Then why wouldn’t you insure your $2 million career?

2. “I’m young and healthy.”

Perfect. That’s exactly when it’s most affordable. Rates are locked in based on age and health at the time of purchase. Waiting until there’s a diagnosis on record? That’s how you lose insurability—or pay much more.

And remember, most disabilities are caused by illnesses, not accidents. Nobody is immune.

3. “My employer offers group coverage.”

Group plans are a great start, but they have limitations:

Often capped at 60% of income.
Benefits are typically taxable if the employer pays the premium.
Coverage might not be portable if the employee changes jobs.

Encourage clients to supplement group policies with individual coverage. That’s how they get full, tax-free income replacement.

Changing the Narrative: From Selling to Empowering

Your job as an advisor isn’t to push products. It’s to empower your clients to make smart, forward-thinking decisions that safeguard their families and financial futures.

Start by educating them. Bring data. Share stories. Use real numbers and examples relevant to their industry or stage of life.

Show them that disability insurance isn’t about fear—it’s about freedom. Freedom to live without the weight of “what if.” Freedom to pursue big dreams without financial fragility.

Your Call to Action: Build Income Protection Into Every Plan

Let me leave you with this:

If your clients walked into your office and said, “I want to protect my home, my car, and my loved ones,” you wouldn’t hesitate to talk about property and life insurance.

So when they say, “I want to protect my future,” why not protect their income?

Here’s what you can do:

Audit your client files. Look at which clients don’t have DI protection in place.
Reach out proactively. Start the conversation with stories, stats, or a simple question: “If your income stopped tomorrow, what would happen?”
Offer layered solutions. Combine group and individual coverage where possible.
Work with a specialist. If you’re not an expert in disability insurance, partner with someone who is (like me). You don’t have to do it alone.

Final Thoughts: What Exceptional Planning Really Looks Like

Disability insurance might not make headlines. It’s not flashy or exciting. It doesn’t come with fancy dashboards or trend graphs.

But when a client faces a health crisis and still receives income—when their family stays in their home, when their retirement plan stays intact, when their lifestyle remains unchanged—that’s when the value shines through.

That’s exceptional financial planning in action.

As trusted advisors, let’s not just build wealth for our clients. Let’s protect the journey of creating it. Because in the end, a financial plan is only as strong as its ability to withstand the unexpected.

Let’s work together to ensure every client, regardless of age or income, is protected against life’s most disruptive detours.

After all, the greatest asset any of us have is not our bank accounts or portfolios—it’s our ability to earn.

Let’s make sure that ability is never left unprotected.