Boomers And Disability Insurance: An Uphill Education
The Life and Health Insurance Foundation for Education is working hard to educate baby boomers about the need for disability insurance.
The nonprofit group can equip agents and brokers with disability insurance presentation kits and with videos that feature people who have benefited from disability insurance.
“I think we give [producers] some good options,” says Jon Dressner, a vice president at LIFE.
But Dressner, producers and others in the disability insurance market say the reality is that producers and individual insurers have a formidable responsibility to make sure that more boomers hear about the importance of disability insurance while the boomers still are healthy enough to buy coverage.
“The industry needs to remind workers that their incomes are their most valuable assets,” says Brian Ashe, a LIFE board member and president of Brian Ashe & Associates Ltd., Lisle, Ill. “Your ability to make a house payment depends on income.”
But today, Ashe says, “our industry is way, way behind” when it comes to disability insurance education.
“Disability insurance is a very undernourished market, agrees Robert MacDonald, president of CTW Consulting L.L.C., Minneapolis, and chairman of Allianz Life Insurance Company of America, Minneapolis.
Figures from the federal government show that only about half of U.S. workers get long term disability insurance from their employers, and Stephen Miller, a vice president at Disability Management Services Inc., Springfield, Mass., reported at the meeting of the Society of Actuaries, Schaumburg, Ill., that only about 2.5% of workers have individual disability insurance, according to a conference transcript.
The American Council of Life Insurers, Washington, released survey figures in 2000 that suggest 82% of U.S. workers lack adequate disability coverage.
Everyone involved with disability insurance worries about the fact that boomers are much less likely to have disability insurance than life insurance, even though boomers are more likely to suffer disabling illnesses or injuries than they are to die.
“Anybody whos got a job needs disability insurance,” Dressner says.
Some of the gap is due to boomers optimism.
Boomers “do not see themselves getting sick or injured,” MacDonald says.
But producers are quick to point out that some of the gap may be due to the insurers reluctance to attract bad risks with overly aggressive marketing campaigns.