A new analysis from Charles River Associates finds that groupdisability insurance protects as many as 500,000 families a year,translating into direct savings of $4.5 billion for taxpayers andthe government.

The analysis, which was commissioned by employee benefits group Unum, wasreleased during a symposium held on July 27 by the FinancialServices Roundtable, the American Savings Education Council, andthe Aspen Institute.

“These benefits provide a financial safety net in the event ofmisfortune, helping the government avoid billions of dollars inpublic assistance payments as a direct consequence of theinsurance,” said David F. Babbel, emeritus professor at The WhartonSchool and leader of the Insurance Economics Practice at CharlesRiver Associates in a statement.

The analysis, FinancialSecurity for Working Americans: An Economic Analysis of InsuranceProducts in Workplace Benefits Programs explores thesebenefits, from individual need to business value and socialbenefits.

According to the analysis, most consumers lack basic financialprotection, and the workplace is the most effective avenue foraccess to affordable coverage. These benefits provide undeniableand concrete value to the government as well as the individualsthey help protect.

But the report showed that, despite the importance of disability coverage, two-thirds of Americans don't have accessto these benefits at work.

Additional findings from the analysis include:

• About 1 in 3 workers will be disabledfor at least 6 months during his or her earning years, with themedian length of disability being 2.5 years.
• Most Americans do not have thefinancial resources to pay their bills if they become unable towork. More than 70 percent of American households could not paytheir normal living expenses if a wage earner is disabled for sixmonths.
• Employers today spend $10 billion inpremium each year to provide disability insurance to 40 millionworkers. Collectively, this insurance generates $590 billion ineconomic welfare for employees.
• The $21 billion employers currentlyspend on group life insurance generates up to $3.5 trillion ineconomic welfare for 75 million covered employees.
• Group disability premiums can be aslittle as $25 per month or $300 per year, and group term lifeinsurance premiums for someone just starting a career can be lessthan $1 per year per $1,000 of death benefit.
• An employee in his twenties earning$40,000 to $50,000 per year suffering a disability can obtain wellover $1 million in payments from an employer-sponsored disabilityplan.
• In 2009, only 60 percent of civilianwage earners were covered by group life insurance, and only 32percent were covered by group long-term disability insurance.
• Wage earners with disability coverageare much less likely to fall into poverty if they become disabled,and therefore are less likely to require public financialassistance.