May 11th 2023
Working Americans have a lot on their plates, but the lack of disability insurance shouldn’t be one of them. This month is Disability Insurance Awareness Month to cast a spotlight on the concerning statistics associated with uninsured Americans facing new or lifelong disabilities.
While it can be confusing, intimidating, or just frustrating, disability insurance in the U.S. requires increased education to become a priority. The reality is that one in four of today’s 20-year-olds will become disabled while they’re working age. According to the CDC, 26% of Americans live with some type of a disability, ranging from musculoskeletal disorders such as back pain and arthritis to mental health.
In fact, 60% of employees say disability insurance is a “must have” benefit, an increase from 51% in 2022. Yet, according to the Social Security Administration, 65% of the private sector workforce has no long-term disability insurance and one in 4 adults with disabilities 18 to 44 years do not have a usual health care provider.
Whether obtained through employers, private policies, or the Social Security Administration, disability insurance can make all the difference in an individual’s life. It seems easier for individuals to remember to insure assets with policies on their homes, vehicles, and valuables but protecting their income is often an afterthought.
Protecting Income
Most disability insurance plans provide benefits for short-term and long-term care. With disability insurance coverage, individuals can file a claim when they experience an illness or injury. Back injuries, cancer, heart disease, and other illnesses cause most long-term absences, not accidents.
Short-term disability (STD) plans provide benefits for approximately 3 to 12 months on a per disability basis while long-term disability (LTD) plans provide monthly benefits after a waiting period or other benefits have ended. The average LTD claim lasts 34.6 months.
Closing the Disability Insurance Gap
The Council for Disability Insurance is a nonprofit organization working to help close the disability insurance gap. One way they are working toward this goal is to encourage employers to improve their benefit offerings.
MetLife’s 21st annual Employee Benefit Trends Study points out that employee benefit satisfaction fell in 2023 to its lowest point in 10 years (slipping from 64% in 2022). Despite this, 83% of employers still believe their employees appreciate the benefits they receive, indicating a disconnect exists.
This conflicting perception suggests that companies might want to reevaluate their benefits program. They can do this either by beginning to offer disability insurance if they don’t already or encouraging improved education and enrollment through enhanced communications.
Davies Life & Health
Davies North America is also here to help. The Life & Health team provides expert long-term care and disability claims management services for major insurance carriers. Our solutions are designed to align with each insurer’s unique objectives to ensure professional, timely, diligent, and accurate policyholder service administration and claims management backed by systems that are flexible, customizable, and scalable.
Learn more about our product and service offerings by visiting https://davies-group.com/northamerica/solutions/claims-solutions/life-health.