Disability awareness month: why disability protection belongs in every loan conversation
May is Disability Awareness Month, and while many don’t like to think about it, a disability can have a big impact on a borrower’s ability to repay their loans.
Disabilities can mean large medical bills, implications on their ability to work and dipping into personal funds to make ends meet.
For lenders and financial institutions, this month is a great opportunity to consider how disability protection can add meaningful value to your loan offerings, improve borrower outcomes and reduce default risk.
The need for disability protection is real
Many people assume “disability” means a major accident. But in reality, more disabilities are caused by illness—not injury.
According to the World Health Organization, neurological conditions such as migraine, stroke and dementia are the leading cause of disability.1
This distinction is important because illness-based disabilities can last longer, be harder to predict and are more difficult for borrowers to prepare for. The truth is many working adults are just one serious diagnosis away from being unable to meet their financial obligations.
According to the CDC, 1 in 4 adults in the United States have some type of disability.2
Despite this urgency, only 46 percent of U.S. adults say they need some sort of disability protection, and currently less than 1 in 5 people say they have it.3
Lenders can play a big role in helping close this gap to protect borrowers and grow their business.
Disability protection protects customers and supports your business
When borrowers become disabled, loan payments don’t stop. Adding disability protection to their loan helps:
- Cover monthly loan payments (either partially or in full) during a qualifying disability
- Reduce financial stress when they’re most vulnerable
- Lowers default risk
For lenders, this can mean:
- Protecting your portfolio performance and safeguarding your bottom line
- Adding another source of non-interest income
- Improved member or customer loyalty
5 tips for positioning disability protection effectively
Positioning disability protection doesn’t have to be a tough conversation. Here are five ways to help it resonate more clearly with your members or customers.
Lead with empathy, not fear
Frame the conversation around protection and peace of mind—not worst-case scenarios. For example: “If something unexpected kept you from working, this benefit could help make your payments for you.”
Explain that illness is more common than accidents
Most people think they’re safe if they drive carefully, avoid risky activities or have a low-impact job. Help them understand that illness—not injury—is the more likely cause of disability. You can even use some of the stats in this article to help them understand the likelihood of disability.
Highlight real-life relevance
Related to tip number two, use everyday examples like back pain, cancer, or heart surgery which are common health issues that could prevent someone from working temporarily or long term.
Position it as a smart financial decision
Reinforce that this coverage isn’t just protection—it’s a tool that supports their financial goals by keeping their loan on track even if life doesn’t go as planned. It’s important to note too, that this protection is supplemental to health insurance. Health insurance may not cover all the expenses associated with a disability. This added protection can help them with making loan payments so they can use that money for other things – like paying any medical bills or expenses. You can even compare the low cost of coverage to an everyday expense like a weekly latte.
Integrate the conversation into your standard loan process
Make it easy and seamless—present disability protection alongside other loan protection options, and ensure your team is trained to answer questions with confidence.
Disability protection: a win-win for borrowers and lenders
By offering disability protection with your loans, you're not just selling a product. You’re delivering peace of mind. You're showing borrowers that you care about more than the transaction—you care about their future. And that’s the kind of relationship that builds loyalty, trust and long-term success.
This Disability Awareness Month, take the opportunity to revisit how your institution is helping borrowers protect what matters most—no matter what life brings. Contact us today, and we can help you with these critical conversations.
