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New Study Sheds Light on Americans' Real Risk of Disability

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Americans are slightly less likely to suffer a long-term disability than they were in the 1970s and 1980s, yet those who do will likely experience it for a longer period of time. This is one of the main findings from a study released May 1, by the Life and Health Insurance Foundation for Education (LIFE), Washington, D.C., entitled, “The Real Risk of Disability in the United States.”
Conducted by the global consulting firm Milliman, Inc., the study offers insights into disability risks based on gender, age, occupation and disability type by contrasting U.S. individual, long-term disability claim incidence between the decades of the 1970s/early 1980s and the 1990s.

“The good news is that the chances of suffering a long-term disability have gone down slightly over the past few decades, but the bad news is that the odds are still quite high and those who become disabled are out of work for much longer periods of time” said David F. Woods, CLU, ChFC, president of the LIFE Foundation. “Americans greatly underestimate the risk of becoming disabled and these findings should serve as a wake-up call for people to examine how they would survive financially if they were to be out of work for an extended period of time.”

The Real Risk of Disability
The Milliman analysis found that today the probability of a white-collar worker becoming disabled for 90 days or longer between the ages of 35 and 65 is 27% for men and 31% for women, compared to 29% for men and 34% for women in the 1970s and 1980s. While the chances of becoming disabled have only changed slightly, the duration of disabilities has increased substantially. A 35 year-old, white-collar male who suffers a disability lasting 90 days or longer will be out of work for an average of about six years. In the 1970s and 1980s, that same male worker would have been out of work for slightly less than four years. The study found that disabilities are lasting longer for female workers too, but the increases have not been as pronounced when compared with the male population.

“Advances in medicine and health care may be a factor influencing the extended duration of long-term disabilities. Where in the past, certain conditions like cancer may have resulted in death, better treatments and earlier diagnoses mean that today people are in need of care for longer periods of time,” Mr. Woods said.

Women Face Higher Risk of Disability
The Milliman study found that women overall face a greater risk of disability than men across all age groups. For instance, among workers with individual disability insurance, 25-year old white collar women are more than three times as likely as their 25-year old male counterparts to suffer a disability lasting 90 days or longer. At age 45, women are still almost twice as likely to suffer a long-term disability.

The Causes of Disabilities
For insured men and women in their prime working years (30-59), the medical conditions causing the most disabilities are cardiovascular problems, musculoskeletal conditions and cancer. One notable exception is the impact of pregnancy on female disability risk. Among women ages 30-39, disabilities due to pregnancy (mostly complications of pregnancy) are the most prominent claim type. The following table highlights the leading causes of disabilities for men and women in various age groups:

The leading disability claims by gender, for various age groups:

Age Male Female
30-39 Musculoskeletal Pregnancy
40-49 Cardiovascular Cancer
50-59 Cardiovascular Cardiovascular / Cancer

The Milliman study analyzed data for the top ten diagnosis groupings: cardiovascular, musculoskeletal, cancer, mental, back, alcohol/drugs, nervous, other injury and AIDS. Except for AIDS claims in all age groups and cardiovascular claims in ages 50-59, female incidence for each of the diagnosis groupings exceeds male incidence by a significant margin.

May is Disability Insurance Awareness Month
The release of the Milliman study is timed to coincide with the beginning of Disability Insurance Awareness Month, an industry-wide campaign designed to increase awareness of disability risk and to get Americans to take stock of their need for disability income protection.

“Most workers are on very shaky ground when it comes to being financially prepared for a long-term disability,” said Mr. Woods. “Only about a third of all full-time employees have long-term disability coverage through work and very few workers have individual disability coverage. People need to realize how common disabilities are and plan accordingly, and our hope is that this new awareness campaign will motivate many Americans to do just that.”

Study Methodology
To evaluate the real risks associated with individual, long-term disabilities in the U.S., the white paper focused on the results of the Individual Disability Experience Committee (IDEC) of the Society of Actuaries, which analyzed individual disability income policies during the 1990s and is the process of developing a new industry disability actuarial table. That research was then compared to the industry’s current actuarial table, the 1985 Commissioner’s Individual Disability A (85 CIDA) table, which is based on data from the 1970s and early 1980s.

To view “The Real Risk of Disability in the United States” in its entirety or to receive more information about disability insurance, visit the LIFE Web site at