Auto mode button Employers canhelp dispel myths about disability insurance and also make iteasier for workers by auto-enrolling them into disability insuranceplans, following 2018 guidance by the Labor Department. (Photo:Shutterstock)

|

There are a number of myths that are causing many workers to notbuy disability insurance, according to Prudential'swhitepaper, “Why Disability Income Protection Should Be Part ofYour Financial Wellness Toolkit.”

|

While a majority of employers offer short-term disability andlong-term disability benefits to their employees, only 38 percentof workers in private industry were participating in STD incomeinsurance; 33 percent were participating in LTD income insurance,and more than 50 million U.S. workers don't have disability incomeinsurance.

|

“Prepared or not, most Americans are at least aware that theyshould attempt to save for emergencies and retirement,” the authorswrite. “Most, however, overlook taking the right steps to protectagainst one of the greatest threats to their overall financialsecurity: being unable to earn a paycheck as a result of a short-or long-term disability.”

|

Related: Disability insurance and the financial wellnessmovement

|

“The cruel irony of this is that evidence shows that those whoare financially stressed are at an increased risk of experiencing adisability,” they write.

|

Many workers are not opting for these benefits because theyerroneously believe that a disabling illness or injury will beautomatically covered by workers' compensation or Social Securitydisability insurance. However, workers' comp benefits only coveraccidents or injuries that happen at work and SSDI benefits payjust above the poverty level – just $14,364 a year on average.Moreover, the benefits aren't automatic, as the there are stringenteligibility requirements for SSDI, and the average processing timeis more than two years.

|

Other myths that keep people from buying disability insuranceinclude the false assumption that young people are not likely tosuffer from a disability; that the individual has enough savings tocover time off; and that enrolling in disability insurance istime-consuming and requires a medical exam.

|

Employers can help dispel these myths and also make it easierfor workers by auto-enrolling them into disability insurance plans,following 2018 guidance by the Labor Department, according toPrudential.

|

“Employers need to devote extra effort to communicating thecriticality of preserving an income stream in the event of adisability,” the authors write. “This must include groundingemployees in the reality of what it means to be disabled and thelikelihood of incurring a disability, since some of the most commontriggers of disability claims include pregnancy, debilitating painfrom musculoskeletal disorders, digestive disorders and mentalhealth issues including depression and anxiety.”

|

Employers should also make sure they have a comprehensive andeffective return-to-work program in place that helps workersovercome any psychological as well as physical barriers they mayface coming back to work after suffering a disability, according toPrudential. “A properly implemented RTW program helps employeesshift their focus away from the experience of being disabled andback to rejoining their workplace community, regaining much-neededincome, and getting back on a path to financial wellness,” theauthors write.

|

Read more: 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.