Despite medical problems accounting for roughly half of all personal bankruptcies and home foreclosures in the U.S., many full-time workers are not prepared for the risk of long-term disability, according to a study by U.S. business group of Sun Life Financial Inc.
This research comes as more employers are providing workers with the option to purchase group benefits, such as disability, life, vision and dental insurance.
“We must educate the U.S. work force to understand the financial risks of long-term disability and learn best practices to mitigate their risks,” says Robert E. Klein Jr., vice president of voluntary benefits. “If ten couples gather for a barbecue, we estimate that roughly three of them will have a partner who experiences a disability lasting one year or longer during their professional lifetimes.”
Thirty-three percent of respondents do not have LTDI, and another 38 percent of respondents whose employers offer LTDI did not purchase it. Among the respondents who do not have LTDI, they don’t think the risk justifies the premium costs, they haven’t considered the possibility of the risk or they find the thought of disability too unpleasant to confront.
The survey also finds that respondents under age 50, minorities, men and tech workers are more likely to have purchased LTDI than other respondents, and many respondents lack understanding of key features of LTDI and do not realize how a disability could raise monthly living expenses.
“Because employers are footing less and less of the overall group insurance bill, workers in our country must take proactive steps to mitigate the financial risk of long-term disability,” says Michael E. Shunney, senior vice president and general manager for Sun Life Financial’s U.S. Employee Benefits Group Division. “As our survey shows, people don’t always think logically when they contemplate their risks. By encouraging workers to learn how to protect themselves and their families against income loss from long-term disability, we hope this survey helps the American work force plan for more than a lifetime of financial security.”