THOUGHT LEADERSHIP

Why income protection belongs in every financial plan

New York Life | May 7, 2026

A conversation with Paul Fromm, head of Disability Income Solutions, New York Life.

May is Disability Income Awareness Month. Why does this conversation matter?

Every May, Disability Income Awareness Month gives the industry a reason to focus on a protection gap that exists year-round. According to LIMRA in 2025, fewer than 1 in 5 Americans have individual disability coverage, and most have never had a real conversation about what a prolonged income disruption would mean for their financial future. The consequences go far beyond the obvious. When a household draws down savings and retirement accounts to get by during a disability, the compounding impact on their long-term financial security can be permanent. That is the conversation that is largely missing from the holistic goals-based planning dialogue, and Disability Income Awareness Month is a good moment to start having it more seriously, but it is just the beginning.

You mention the compounding impact. Can you explain what you mean?

The standard framing around disability insurance focuses on income replacement: if you cannot work, you need something to cover your bills. That is true, but it misses the bigger picture. The LIMRA Retirement Income Institute recently published research showing that health-related financial risks are structurally different from market risks. They tend to worsen over time, rarely fully recover and create ongoing financial strain precisely when households have the fewest options to adjust. A disability at 45 does not cost a household a few years of income. It costs them the retirement contributions they stopped making, the savings they drained, the compounding growth that will never be recovered and the retirement security that is measurably diminished as a result. The 2025 LIMRA/Life Happens Insurance Barometer found that 51% of unprotected households say they would rely on personal savings and 26% would draw from retirement accounts just to cover everyday expenses if they could no longer work. That is not a short-term problem. It is a long-term one.

Why does this gap persist despite decades of awareness efforts?

Part of it is framing. Income protection has historically been positioned as a product decision rather than a planning imperative. Agents and advisors typically think about it as a line item, and consumers often treat it the same way. But income protection is the foundation of their financial plan. Every other goal, whether it’s retirement security, a home, a family’s future, depends on the income that funds it. When agents and advisors center the conversation on protecting that foundation rather than replacing a paycheck, the case is considerably more compelling.

What does the research tell us about the scale of the problem?

The numbers are striking. One in four of today’s 20-year-olds will be disabled before retirement, according to the Social Security Administration. In 2023, the average individual disability claim lasts almost three years, according to the Council for Disability Awareness. And yet fewer than 1 in 5 adults have individual disability coverage, with LIMRA estimating that true individual ownership may be even lower, in a 2024 article. The coverage gap between the protection people need and the protection they have is one of the most significant unaddressed challenges in people’s financial planning today.

What should advisors be thinking about when it comes to income protection?

The agents and advisors who are most effective at this have made one important shift: they have stopped treating income protection as a separate conversation and started treating it as a prerequisite for every other conversation. When a client’s income is protected, the rest of the plan has a foundation it can stand on. When it is not, every other goal is at risk. The practical question to ask is not whether a client can get by without a paycheck for a few months: it is whether their plan can absorb a multi-year income disruption without permanent damage. For most clients, the honest answer is that it cannot, and that is where the conversation needs to start.

Where do you see the greatest opportunity for the industry in the years ahead?

Making income protection a standard part of holistic goals-based planning rather than an optional add-on. Too many plans are built without it, and too many Americans arrive at a disability without the coverage or the guidance to navigate it well. New York Life is committed to changing that, through a product that is more competitive and accessible than ever, and through a commitment to making sure every client has this conversation before they need it. New York Life’s Wealth Watch research shows that adults who work with a financial professional are significantly more likely to feel financially secure. Pairing that guidance with the right income protection is one of the most meaningful contributions agents and advisors can make to their clients’ long-term financial futures.