Importance of Workplace Disability Benefits Emphasized after Research
The Consumer Federation of America and Unum recently interviewed hundreds of Americans to determine the importance of disability benefits in providing financial stability. Over 400 people participated in the interview study. They shared their stories of injuries or illnesses that led to disabilities and explained how they coped with the ensuing financial strains.
One participant said that her employer's disability insurance policy covered her disability. She said that she would have been unable to pay her bills or medical expenses without the funds from the policy. In addition to hurting her financially, she said the strain would have hurt her emotionally as well because of the potential inability to enjoy social outings with her children and grandchildren. She also said that she believed it would have limited her health permanently and would have negatively affected the amount of time it took her to recover.
Another study participant who worked for a health insurance company said that she had used benefits two separate times within a five-year period while she recovered from back surgeries. Without the benefits, she said that she would not have been able to survive financially and be off from work for such a long period of time.
One of the researchers conducting the interviews said that disability insurance disbursements were the most critical components of participants' recovery phases. Since most participants did not have any other form of safety net, they relied heavily on the income they received from their disability insurance policies. Group coverage offers income protection when employees cannot go to work after developing injuries or illnesses. Benefits typically start within one to six months after an employee is unable to work. After that time period, the employee receives payments that equal about 60 percent of his or her previous income. For about $10 to $30 per month, long-term disability coverage can be added. However, only about 30 percent of workers in the private sector are protected with long-term disability coverage.
Disability insurance from employers provides protection that workers cannot get from Social Security Disability or workers' compensation benefits. However, workers may still receive SSDI in addition to employer-sponsored benefits for supplemental income. The experts conducting the series of interviews said that their findings outline just how important it is for all Americans to have private or employer-sponsored disability insurance. Disabilities can happen because of injuries or long-term illnesses and may happen to people of any age.
Additional Survey Findings
Since disability insurance disbursements replace about 60 percent of prior income, the participants did report having a reduced standard of living. About 85 percent said that they had to cut expenses or halt their retirement savings practices. Almost 60 percent said that they delayed or skipped dental, vision or medical care because of the lowered amount of income. More than 55 percent said that they had to cut their expenses to the point of feeling uncomfortable. However, the majority of beneficiaries said that their disbursements helped preserve an acceptable standard of living.
More than 20 percent of participants said that they missed one or more rent or mortgage payments. Without the disbursements, another 50 percent said that they surely would have missed payments. Nearly 15 percent reporting having to relocate because they could not afford their current accommodations. However, nearly 45 percent said that they would have had to relocate if they did not receive benefits. More than 40 percent reported missing one or more bills or loan payments, and about the same amount said that they would have missed these types of payments without disability insurance disbursements. Another 30 percent reported using government or community assistance for groceries. Nearly the same percentage said that they would have done the same if they did not have disability insurance income.
At least 25 to 30 percent of Americans will experience a short-term disability or a long-term disability during their working years. Since the statistics are so high, insurers everywhere recommend personal disability insurance. Employers hoping attract and retain good talent can add disability insurance to their benefits package to accomplish that goal at an affordable cost. To learn more, please give me a call.