Could you continue to take care of your family and pay your bills if you were sick or injured and unable to work for any length of time? Do you know how much money would be coming in each month—and from where—if you were to become disabled?
Disability income insurance provides financial protection and peace of mind for millions of workers and their families. It is designed to replace a major portion of income when sickness or injury prevents a person from earning a living. It can help pay regular monthly bills while a person is recovering, but is still unable to do his or her job.
As Disability Insurance Awareness Month (DIAM) gets going this month, we want to share with you the following information about the value disability income insurance provides to millions of Americans across the country.
Important Information about Disability Income Insurance
Most Americans Underestimate Their Risk of Disability
Many Americans underestimate the risk of experiencing a disability that will keep them from working:
- Nine out of ten workers grossly underestimate their chances of becoming disabled. (Council for Disability Awareness, “2007 Disability Awareness Survey”)
- Three in ten workers entering the workforce today will become disabled sometime before retiring. (Social Security Administration, Fact Sheet, 2007)
- Workers’ compensation does not cover the vast majority of disabilities. More than 90% of disabling accidents and illnesses are not work related. (National Safety Council, Injury Facts Ed., 2004)
Most are Unprepared for the High Cost of a Disabling Illness or Injury
Many are not financially prepared for the lost wages and financial strain that a long-term disability can cause:
- The financial impact on individuals who become disabled can be staggering if they lack disability insurance—as high as 20 times a person’s annual salary. (Milliman Inc, “The Impact of Disability”, 2009).
- Most baby boomers (55 percent) say they are financially unprepared if the primary wage earner in their household became disabled and was unable to work for an extended period of time. (Harris Interactive survey of baby boomers, 2008).
- Most baby boomers overestimate the breadth and depth of the public safety net available for workers who suffer a disability. Baby boomers believe public programs provide disability benefits to more people than they actually do and most overestimate the amount of benefits available. (Harris Interactive survey of baby boomers, 2008).
Disability Income Insurance Provides Financial Protection and Peace of Mind
Disability income insurance provides financial protection and peace of mind for millions of workers and their families. Disability coverage extends benefits to many persons who are not eligible for other disability programs and spares many Americans from financial hardship. These benefits allow the families of disabled workers to continue meeting their household expenses, protecting them from taking on additional debt or losing their homes or other assets.
- Employer-sponsored disability coverage provides income protection to more than 50 million employees for short-term disabilities and about 40 million employees for long-term disabilities. (JHA’s “2006 U.S. Group Disability Survey”)
- A Harris Interactive survey found that four out of five private disability insurance claimants are satisfied with their overall policy and most expressed high satisfaction with the process for filing and receiving benefits. (Harris Interactive Survey of Disability Income Insurance Claimants, 2008)
- In 2010, long-term disability payments from private insurers to individuals with disabilities totaled more than $8.1 billion. (Council for Disability Awareness, “2010 CDA Long-Term Disability Claims Review”)
Resources on Disability Income Insurance
Trends and Innovations in Disability Income Insurance
AHIP’s Trends and Innovations in Disability Income Insurance is a publication released in 2010 that highlights disability insurers’ innovative programs to help employees and employers overcome multiple challenges and succeed despite experiencing a disability.
Disability income insurance resources are available at the consumer website, www.YourIncomeAtRisk.org, designed to share information with consumers and employers. These resources include:
- AHIP’s Guide to Disability Income Insurance, a consumer guide featured by the Federal Citizen Information Center.
- An Employer’s Guide to Disability Income Insurance designed to help employers understand more about this important financial protection tool for their employees.