The month of May isn’t solely known for spring flowers – it’s also time to remind employees about the importance of protecting their income.
Employers and their broker partners can incorporate into annual and/or off-cycle enrollments the nonprofit LIFE Foundation’s annual Disability Insurance Awareness Month in May and accompanying protect-your-paycheck campaign.
Among the key features made available: a tool kit, marketing guides, e-cards and Webinars, as well as the organization’s “Where Did My Paycheck Go?” challenge involving a $1,000 random drawing for people who rank the seven biggest expenditures in their monthly budgets.
More than 70% of U.S. households rely on dual incomes, but only 26% have any type of disability insurance, according to LIMRA International research. LIMRA has produced downloadable multimedia materials consisting of short videos and a fact sheet that also can be used to promote disability insurance coverage.
Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global, noted in a news release announcing these downloads that “only about one in five people even recall being approached about buying disability insurance. We have to do a better job reaching out and educating consumers about the value of disability insurance and the protection it provides.”
In a LIFE Foundation poll of working Americans conducted by Kelton Research, 84% of the 587 respondents thought it was prudent to insure their car and 80% said the same about homeowners insurance, but only 48% believe it’s imperative for those with a job to have disability insurance.
A possible explanation could be that few people understand this benefit, which often is offered on an employee-pay-all voluntary basis.
For example, just 39% of those polled weren’t sure what percentage of their salary would be received from disability insurance if they were to become disabled and 22% overestimated their coverage to be 70% to 100% of their pay when the income-replacement ratio is almost always no more than two-thirds of pre-disability salary.
Asked why more employees aren’t signing up for disability insurance, LIFE Foundation CEO Marvin H. Feldman says “it’s unfortunate, but disability insurance remains one of the most overlooked and misunderstood types [of coverage], which hinders many people from taking steps to ensure they have enough coverage. But a disability can strike at any time, which is why it’s critical for working Americans to take the first step and contact their benefits manager at work to see what coverage they have.”
Without this coverage, he adds that many people would be hard pressed to cover medical costs on top of their daily expenses and bills, noting that nearly 30% of the workforce will become disabled for 90 days or longer between age 35 and 65.
The issue is of particular concern to women on maternity leave and their families judging from a recent national survey of 550 working mothers age 25 to 54 conducted by Liberty Mutual, which found that 60% believed they would face financial difficulty within two months if they were unable to work and had no other source of income.
Another key is that while 57% of the respondents had taken a maternity leave, as many as 44% of them did not have any disability insurance and 65% of those with the benefit doubted that they could pay household expenses without such coverage.
