Anyone who works in the world of employee benefits has heard itbefore and knows it's true: The ability to earn a living is themost important asset people have. Now some new work is quantifyingthe tangible value of disability benefits, and buildingpartnerships that can move us toward the goal of protecting thefinancial security of more working Americans.

The need for and the value of disability benefits are growingtopics of conversation in policy discussions with lawmakers. InMarch, a panel of experts on disability benefits and return-to-workstrategies testified at a U.S. Senate committee hearing. Lawmakersand industry experts discussed the value of income protectionbenefits to individuals, businesses and the government, as well asthe need for the private disability insurance industry and thegovernment to work together to expand thesecoverages. 

In January, the first Congressional caucus on income protectionand employee benefits was announced in the Senate. In late 2011,new research from Charles River Associates quantified the value ofdisability coverage to individuals, families and the government.And newly released research developed in partnership with theConsumer Federation of America shows consumers want and needdisability coverage, and they'd be willing to pay for it given theopportunity.

So while all of us in the world of employee benefits know thatthe ability to earn a living is the most important asset peoplehave, we're not just talking to ourselves. People are listening andworking together, the understanding of the need is growing and thevalue is becoming increasingly clear.

One nation, underinsured

U.S. lawmakers and a panel of industry experts met in March fora Senate committee hearing called “Stay-at-work and return-to-work:Lessons from the private sector.” The hearing focused largely onhow the private sector supports employees through disabilityinsurance, employment modifications and workplace accommodations,among other services. 

That focus on the private income protection industry wasessential because it highlighted how common work-limiting illnessor injury is and how to minimize the financial impact when itstrikes. 

Our industry must continue to do its part by helping to educateconsumers about the need for coverage and by seeking ways tosimplify our products and make them more affordable to allAmericans. But it's clear government can play an important role byhelping to raise awareness with consumers, employers and othersabout the risks and consequences of disability.

Few people understand the average worker has a one-in-threechance of becoming disabled from illness or injury for six monthsor more during his or her working life. Most Americans areunprepared for the consequences of losing an income, even for ashort period of time.

Income protection insurance is affordable, with group premiumsoften as low as $20 to $30 per month. But too few Americans arecovered by private income protection. About 70 percent of privatesector employees lack long-term disability coverage, according tothe Bureau of Labor Statistics. 

Consider the economic environment in which this conversation ishappening. 

Half of all households couldn't raise $2,000 within a month ifthey needed to, according to the National Bureau of EconomicResearch.

And more than half (60 percent) of workers have less than$25,000 in household savings, while 34 percent say they have pulledmoney out of savings to pay for basic expenses, according to a 2012retirement confidence survey published by Employee BenefitsResearch Institute. 

In the same survey, 37 percent of people said they expect towork after age 65, as compared to 24 percent in 2007 and 18 percentin 2002. In addition, 26 percent of workers said they expect to be70 or older when they retire and another 7 percent said they wouldnever retire.

Only 52 percent said they felt even somewhat confident theywould have enough money to live comfortably through theirretirement years.

The most widespread income protections—workers' compensation,Social Security Disability Insurance and personal savings—areuseful but insufficient. Three times as many disabling injuriesoccur off the job as on the job, and are therefore not covered byworkers' compensation. 

The average Social Security Disability Insurance benefit is$1,100 a month, and is reserved for eligible disabilities expectedto last for at least a year or result in death. About 70 percent ofapplicants are turned down on their first try, and the four-tieredappeals process can take years.

Support when it's needed most

The world of disability is uncharted territory for most people,and private benefits providers guide them through a difficultlandscape by building supportive relationships with the common goalof helping employees recover and return to work. 

A key component of income protection insurance is the immediateassistance provided by experienced specialists, which reduces theimpact of disability and maximizes the chances of someone returningto work. 

When an employee is sidelined by injury or illness, disabilitybenefits replace 60 percent or more of the employee's income,helping families avoid real financial hardship. Employers alsobenefit from the role the coverage can play in recruiting andretaining a talented workforce and strengtheningbusinesses. 

Private income protection insurers help employers better managetheir businesses by maximizing productivity and minimizing absence.Studies show that disabilities can cost employers upward of 15percent of payroll. By increasing the potential for returning towork after illness or injury, employers can save on the expense ofrecruiting and training replacements, and can reduce health carecosts, as well. 

And the value of these benefits extends to taxpayers and thegovernment. 

The increasingly collaborative conversation about the importanceof income protection benefits also prompted the first Congressionalcaucus on these issues.

Early in 2012, U.S. Sens. Kay Haga, D-N.C. and Olympia Snowe,R-Maine, announced the Income Protection Benefits Caucus to bringattention to issues that affect the financial stability of millionsof people and their families. 

The group will serve as a clearinghouse for information on theseissues and react to related Congressional proposals. Work is underway to create a similar organization in the House.

 The benefits add up

Last year, Unum commissioned a study by Charles River Associatesto assess the value of employee benefits with a specific focus ondisability income protection provided in theworkplace. 

The study found that private, employer-sponsored disabilityinsurance saves taxpayers up to $4.5 billion dollars per year andhelps as many as 575,000 families avoid impoverishment and the needto rely on public assistance programs. 

Individuals with income protection coverage who become disabledare much less likely to require support through governmentassistance programs, greatly benefiting taxpayers. In fact, theCharles River report suggests that poverty among working adults whobecome disabled during their careers could be virtually eliminatedif all workers had some form of standard employer-sponsoreddisability insurance. 

Following the release of the study, Sen. Hagan and Sen. BobCorker, R-Tenn., participated in a forum in Washington, D.C., onthe topic of income protection and financial literacy that featuredfindings from the Charles River research. The forum was hosted bythe Financial Services Roundtable, the American Savings InstituteCouncil and the Aspen Institute. 

Clearly, employer-sponsored benefits can play a major role inaddressing the growing need for financial protection for familiesand individuals and in taking pressure off governmentresources. 

Newly released research developed in partnership with theConsumer Federation of America shows that individuals need and wantdisability coverage – and that they would be willing to pay for itif their employers offered them the opportunity.

In partnership with Unum, the Consumer Federation of America—thecountry's largest consumer advocacy group— surveyed nearly 1,200people this spring to learn about consumer attitudes andunderstanding of disability coverage. 

Missing work for at least three months because of injury orillness would create a financial hardship for 79 percent of workersand a “great hardship” for more than half of thosesurveyed. 

The survey also reveals that 75 percent of people do not knowthat the major causes of disability include common illnesses orhealth conditions. The most common reasons for disability leaveinclude cancer, childbirth, muscle/bone disorders, heart attacks,strokes, and surgery.

Nearly nine of 10 workers said they think it is “personallyimportant” for them to have this coverage, and nine of 10 said theythink all businesses should offer disability insurance. And six in10 said they would pay all of $30 monthly premiums to gainprotection.

Protecting their most valuable asset—the ability to earn aliving—is a critical step in creating a safety net for Americanworkers. The private sector, government and advocacy organizationscan work together to increase the awareness of the need foremployer-sponsored income protection benefits and to make thesevaluable benefits more accessible to individuals andfamilies. 

Scott Maker is senior vice president for government affairsat Unum.