Many Americans are doing without disability insurance, often because it’s not offered by their employer, according to a new survey by OneAmerica and the Harris Poll. OneAmerica, an insurance and financial services company based in Indianapolis, found that only 34 percent of employees surveyed say they have disability insurance.
The survey of 2,100 U.S. adults, revealed that among employed Americans who do not have short- or long-term disability insurance provided by their employer, 43 percent say the reason is because their employer does not offer it.
Only 14 percent say the reason they don’t have it is because they cannot afford coverage; a combined 34 percent don’t have policies through their employer due to other obligations or expenses they feel are higher priorities (12 percent), don’t see the value (12 percent), or say “I am healthy and don’t need it” (14 percent).
According to Steven Lynch, vice president of national sales and service for OneAmerica, there’s a lack of awareness among American workers on how valuable disability insurance can be.
“The three cornerstones of financial wellness starts with life insurance, disability insurance, and retirement services,” he says.
“A lot of people in the industry just aren’t talking about it that much. There’s a lot of noise about the ACA, and benefit products such as accident insurance or critical illness insurance. We’ve been getting away from our foundational products, and creating a lot of marketplace confusion.”
OneAmerica officials say the survey was released in May in conjunction with Disability Insurance Awareness Month. They add that the insurance brokerage industry can do more to educate consumers on protecting income through disability insurance.
“People insure their homes, their cars, their health, but too often they don’t consider the importance of insuring their paycheck — and that’s the foundation on which a person builds, and sustains, all of those other financial goals,” says Jim McGovern, senior vice president of employee benefits for the company.
“Our survey illustrates what we know from personal experience — there are millions of businesses that could offer American access to disability insurance, yet too few offer this.”
Lynch says like other benefits, disability insurance can help attract and retain employees and improve morale and engagement. But the survey found demographic gaps in workers’ attitudes towards disability insurance and utilization of the benefit: Only 23 percent of workers with a household income of less than $50,000 a year have employer-provided disability insurance. And 34 percent of working women between 18 and 34 who lack such insurance said they don’t have it because they think they are healthy and don’t need it.
“We see a great need for education in the marketplace,” McGovern says. “People don’t understand what disability insurance is, so they don’t see the need for it. There is a misconception that disability insurance is for the older crowd, for people in high-risk occupations, or for people in poor health. That’s just not the case. Disability insurance is for everyone.”