Last summer, Jim Posey polled a client with 600 employees on their voluntary disability participation. Thirty percent were signed up. After the economic turmoil of the fall, that same group plummeted to 4% participation.

"They just couldn't afford it," says Posey, owner of Jim Posey Insurance in Tulsa, Okla. "Obviously they're going to pay for groceries before they pay for disability insurance."

Carriers are responding to the market by molding their voluntary disability offerings accordingly. In late April, Aflac reduced the number of hours required for an employee to be considered full time from 30 to 19. "I think we've all seen where sometimes employers in this environment might be reducing the hours their employees work, rather than having to do away with the employee," says Karen Riedel, second vice president, product marketing. "So we believe that that's very relevant to today's environment."

What's also relevant is the overall shift from group to voluntary benefits, says Bob Risk, vice president, head of group protection sales for Lincoln Financial. "What we saw at the tail end of last year is some more traditional employer-paid groups have gone voluntary," he says.

According to a November 2008 MetLife survey, the top concern leading employees to feel they are not prepared for a financial crisis is "if a principal wage earner can no longer work because of disability."

Such a mindset makes the viability of disability insurance even more poignant, says Neal Lucchi, senior vice president, voluntary products with HM Insurance Group. "I've noticed in this current economic situation people seem much more sensitive right now, just how fragile they are from a paycheck-to-paycheck situation," he says. "I think that's always been one of the things that disability affords people - that protection that should ,God forbid, something happen, they keep that income stream coming."

Aflac is also responding by lowering their small-group eligibility threshold from five employees to three. At the same time, Humana is seeing a lot of interest in the extra-small group market, says Beth Bierbower, chief operating officer, Humana Specialty Benefits.

"On the medical side, we have a lot of small-group business. It works really well with us," Bierbower says. "We have long-term relationships with those employers, we have long-term relationships with the brokers that service those accounts. It's good business for us, so it's only natural for us to say, 'How can we go down and meet the same market that we have on the medical side?'"

Edan Barshan, president and CEO of Universal Benefit Plans, recently signed a group with 28 lives. The employer made it clear that he wasn't paying for anything more than group health and dental, but the HR rep sought out Barshan looking for quotes on voluntary disability and life. The Boston-based broker hasn't had any clients drop their disability insurance. On the contrary, his business is growing.

"We have to work smart in this economy. Before, when things were booming, you could just talk to anybody. Right now, we really have to focus our marketing efforts into areas where we know that we're going to get more 'yes' answers and the longevity is going to be there," Barshan says. "Voluntary products right now are the products to be selling in the down market because the employer is cutting costs, and they're not paying for it. However, if marketed well, the employees realize the risk associated with disability."

When it comes to voluntary disability, the key to good marketing is overcoming misconceptions, says Risk. Average plans are about $30 a month, which breaks down to $7 or $8 a week. However, the employee mindset is based on how much their group medical costs have risen - which is often more than $1,000 for family premiums. "The big key for the employees is they'll realize that it's not that expensive," Risk says.

Short-term disability was at the top of a recent Aflac survey asking nurses which voluntary benefit they would most like to purchase. At 73%, it beat the next closest responses (a tie between accident and long-term care) by 14 percentage points.

The desire is there. Sometimes it just takes a little face-to-face interaction to manifest it. "I've always said disability is the best value in benefits if you look at what it costs per paycheck and what the potential benefits are. It's huge," says Risk. "And disability is very real. It happens, and people get benefits all the time."

Despite his trouble, Posey believes participation rates for what he calls the most needed voluntary benefit out there will eventually bounce back, so he continues to promote it whenever he meets with employers. "We're always trying to make it a part of packages," he says. "We try to get the employers to do a base plan to pay for the employees, and then if the employees want more, make it voluntary."