Disability insurance is a critical piece of income protection

May is Disability Insurance Awareness Month. Every year, The Council for Disability Awareness joins forces with others in the insurance industry to raise awareness about the importance of income protection.

This year, a new consumer microsite, RealityCheckup.org was launched to help educate working Americans about the need for income protection.

The reality is this – an illness or injury can happen to anyone. Disability insurance provides critical financial protection that is very different from other insurance products. Unless it is offered through their employer, most adults have little, if any, disability insurance coverage, and many don’t fully understand what it protects.

Disability insurance pays a portion of the insured employee’s salary when the employee needs to miss work due to an illness, injury, or having a baby. For a single employee, disability insurance is the second most important insurance the employee can carry after health insurance. And for an employee with a family, disability insurance provides an income stream if the employee needs to leave work.

What is group disability insurance?
Group disability insurance provides income protection for employees as well as cost-saving management strategies for employers. For employers, lost time on the job due to a disability can significantly impact workplace productivity and profitability. However, disability insurance provides partial replacement of lost income for employees while also covering overtime and costs of hiring replacements. Many states mandate temporary disability insurance that requires employers to provide benefits equivalent those working in non-statutory states.

Is group disability insurance really necessary?
Lost time and medical costs are on the rise, and the risk of disability is greater than most employers and employees realize. Consider these statistics:

• Over 36 million Americans are classified as disabled.
  
• Three in ten workers entering the workforce today will become disabled before retiring
  
• An illness or accident will keep one in five workers from working for at least a year sometime during his or her career
  
• Americans have a 50 percent chance of becoming disabled for 90 days or more between the ages of 35 and 65
  
• Disabilities affect one-fifth of Americans (over 60 million people).
  
• A disabling injury occurs every eight seconds at work.
  

The possibility of becoming disabled is very real for working Americans, and so are the financial consequences and costs associated with employee absence.

Contact a member of LMC’s employee benefits team to discuss group disability insurance and determine if it is the right choice for your organization.