Fewer people are insuring themselves against the impact of a disabling injury or illness, according to new research from The Hartford, released today. The report shows just 49 percent of U.S. workers have short-term disability insurance and 44 percent have long-term disability insurance, a drop of 6 percent and 3 percent, respectively, from last year's numbers.
This is concerning news to the insurance and financial company, they say, as disability insurance protects people's ability to earn a paycheck.
"We are concerned about the lower number of Americans who have coverage designed to provide a financial safety net," says Ron Gendreau, executive vice president of The Hartford's Group Benefits. "Approximately two million Americans have experienced a disabling illness or injury so far this year. Based on our survey, about half of those workers will continue to have an income to help pay for expenses while they are recovering from their disability."
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Also concerning is that only 25 percent of workers say they completely understand disability insurance.
Yet the majority seems to understand having a financial back-up plan is important. Most Americans (92 percent) say they would need to make lifestyle changes if they lost part of their family income for three to six months, and 75 percent of consumers base their buying decisions on their fear of experiencing an unexpected financial hardship.
"People understand the importance of insuring their home," Gendreau says. "Yet by not protecting their paycheck, consumers are essentially putting their home at risk. Consider that losing your income for two years can be the financial equivalent of losing your home."
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