Employees who work in manufacturing, health care and education may be underinsured for the important financial protection they need if they are faced with a disability.
Information from Colonial Life’s customer database reveals that workers in these three industries have a significant gap in the amount of disability income insurance they purchase, compared to the amount typically recommended to help protect their income. In general, DI insurance replaces up to 60 percent of an employee’s income. The following are the industries, according to the Colonial Life study:
Manufacturing
Manufacturing workers who purchase Colonial Life disability policies buy roughly half the amount of disability coverage they actually need. These employees buy only enough coverage to protect 33 percent of their income instead of the recommended 60 percent.
Education
Employees who work in the education industry buy DI insurance to protect just 37 percent of their income.
Health care
Health care workers buy only enough DI insurance to protect 36 percent of their income.
“These three industries alone represent more than 37 million working Americans who may be underinsured in the event of a disability,” says Steven Johnson, assistant vice president for product development, Colonial Life. “This kind of coverage gap puts them at tremendous risk, especially considering that more than half of all households say they couldn’t raise $2,000 a month, if needed.”
Two-thirds of private-sector American workers are not covered by employer-sponsored disability insurance against loss of income due to illness or injury, according to the Bureau of Labor Statistics. And while most people think accidents are the leading cause of disability, illnesses are actually the most important reason for lost work.
“The likelihood of experiencing a disability--whether short-term or long-term-- is much more common than you might think,” says Johnson. “Although many businesses provide some form of group long-term disability coverage, there may be a coverage gap between the end of sick leave and the beginning of long-term disability coverage. Products such as voluntary short-term disability insurance can help employees fill the gap.”
Leveraging Disability Insurance Awareness Month
As you sell your DI products to your prospects, you can take advantage of DIAM, the national marketing campaign coordinated by the LIFE Foundation to encourage consumers to buy the DI protection they need.
LIFE has created the online DIAM Producer Toolkit, a whole suite of free tools and resources that you can download and use in your outreach. These include:
Access the online toolkit at www.lifehappens.org/diamkit. In addition, as a NAIFA member, you can access all of LIFE’s educational resources at www.lifecatalog.org.
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By Ayo Mseka
Editor-In-Chief
Advisor Today