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Life Health > Life Insurance > Term Insurance

How Disability Claims Data Can Boost Your Business

By Barry Lundquist

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Need to drive home the importance of helping clients plan for the unexpected when they think disability won’t happen to them?

At your next client meeting, leverage the recent results from the 2010 Long-Term Disability Claims Review conducted by the Council for Disability Awareness (CDA). Overall, the study revealed that disabilities are more common than people think – and they’re clearly on the rise.

Here are some of the most relevant statistics you can share with clients, in addition to speaking with them about their own experiences with disability.

  • More U.S. workers are applying for Social Security disability insurance claim payments than at any other time in history. Not only did the survey reveal that new applications totaled 2.8 million in 2009, but also that new SSDI claims are projected to continue increasing dramatically over the next year.
  • The leading cause of disability continues to be musculoskeletal and connective tissue disorders, such as back pain and joint and muscle disorders. Cancer and nervous system claims trended up slightly as did cardiovascular and circulatory problems. Most wage earners incorrectly believe accidents are their greatest disability risk.
  • Ninety-five percent of all disability claims were non-job related. This means that almost all of the claims did not qualify for benefits under workers’ compensation insurance.
  • The approval rate for SSDI claims continues to decline. The rate fell to just 35 percent in 2009, representing a steady decline from 52 percent 10 years ago. Social Security pays only for serious total disability claims; it does not cover partial or temporary disabilities, no matter how serious. More importantly, SSDI assumes that working families can access other resources to support them during periods of short-term disabilities, such as workers’ compensation, insurance, savings, and investments. Workers must meet certain requirements in order to qualify for SSDI benefits: They must have worked in jobs covered by Social Security and must have a medical condition that meets the administration’s definition of disability. According to the Social Security Administration, a person is considered disabled if they can’t do the work they did before; can’t adjust to other work because of their medical conditions; or have suffered a disability that has lasted, or is expected to last, for at least one year.

Help clients become better prepared

As CDA’s claims review reveals, more disabilities are being reported, and fewer individuals are qualifying for benefits under SSDI. As a result, Americans must assume a greater responsibility for protecting themselves and their families from a prolonged period of disability–and their ability to earn a living.

Here are a few ways you can help them.

  1. Take inventory of assets and resources that could support them if their paycheck suddenly stopped. Do they have adequate savings and investments on which they could draw? Or would they need to borrow money from 401(k) plans, family, friends, or home-equity loans to make it through a period of no or little income.
  2. Find out what benefits they can access through their employer. Do they have short-term or long-term disability insurance coverage, or are they eligible to receive sick pay, through work? If so, make sure they understand what benefits are available to them and how the program works.
  3. Supplement their existing income sources as needed to meet monthly expense obligations with disability income insurance.

The results of CDA’s claims review illustrate how it is critical to educate your clients on the growing risk of suffering a disability – and how they can better protect themselves financially if they suddenly suffer an unforeseen sickness or injury.

Barry Lundquist is the interim president of the Council for Disability Awareness. He can be reached at [email protected] or 207-774-2634.

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