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Disability Insurance Observer: Yes, They're Ignorant. And...?

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Companies and groups in the disability community have been celebrating Disability Insurance Awareness Month by coming out with reports on how abysmally ignorant American breadwinners are.

On the one hand: Someone has to explore the outer limits of American cluelessness.

On the other hand: Maybe the survey sponsors would get more bang for the promotional buck if they broadened their range of interests a bit and asked more questions about other topics.

One problem with the current flood of “American workers are ignorant” surveys is that it’s hard to generate as much interest in the fourth report of that nature that comes out in a month than the first.

WellPoint Inc., Indianapolis (NYSE:WLP), is one of the companies that has released a disability ignorance survey report.

The company commissioned a survey of 2,500 U.S. residents ages 18 and older and found that two-thirds of the participants did not know what was covered by their disability plans, and that 40% said they thought disability insurance only covers disabilities caused by injuries or accidents.

Of course: WellPoint is a wonderful company that protects tens of millions of Americans against illness, loss of income and other risks. Some people can talk about problems they’ve had with any company, including a big health insurance company. Just about every big company will end up taking a thumping in the court of public opinion sooner or later. But, the bottom line is that tens of thousands of people may be alive, able-bodied and solvent today primarily because of WellPoint products.

WellPoint is trying to help healthy people stay well by taking the lead on projects such as getting people to exercise, working to keep dental benefits in place, and modernizing the U.S. claim coding system.

The survey report is a perfectly good survey report, and the fact that it comes from a giant health insurer is interesting. WellPoint has been in the disability insurance market and trying to educate the public about the need for disability coverage for years, but disability insurance tends to be a market in which carriers weigh the benefits and possible risks of expanding sales carefully. GenRe reported in its group long-term disability (LTD) market survey report for 2011 that WellPoint accounted for about $44 million in group LTD premium revenue from in-force business last year, or a 0.5% share of the in-force market. It ranked about 20th in terms of in-force group LTD premium revenue.

Similarly, WellPoint came in 18th in the GenRe group LTD new sales rankings, with $7.5 million in net group LTD sales and a 0.6% share of new group LTD sales.

If WellPoint decided that dramatically expanding its role in the disability insurance market was a great way to diversify, it could apply a great deal of promotional muscle to that effort. Maybe WellPoint could be the company that could create a spokescharacter that compete with what Flo does for auto insurance and what the Duck does for accident insurance.

The WellPoint survey is intelligent, and the survey report is nicely written.

So, there’s nothing wrong with WellPoint, and nothing wrong with the survey or the survey report — except that, simply because many great, intelligent people are thinking the same worried thoughts about why people lack income protection, the survey report is an awful lot like a lot of other intelligent, well-written disability insurance market survey reports that have come out this month.

I found I had trouble figuring out how to write a straight news brief about the survey report that would be much different from other disability survey report articles I’ve been doing.

WellPoint did report what to me seems to be one really interesting, unusual, superstition-oriented statistic (which I love, because, deep down, I’m superstitious): About 10% of the survey participants said they think buying disability insurance could jinx them.

But WellPoint did not gather statistics on the percentage who think, (like me!), deep down, that buying disability insurance might somehow provide magical protection against disability, and it seems as if WellPoint might not be thrilled with an article focusing on the role of superstition in consumers’ income protection purchasing decisions.

On the one hand: Many workers probably do underestimate the risk of disability and lack an understanding of the coverage their employer-sponsored disability plans provide.

On the other hand: Workers who are healthy enough, energetic enough and connected enough to a telephone or computer to be taking a disability awareness survey might be pretty good risks. Maybe the answers they give make sense for themselves, if not for the market as a whole. And it could be that plenty of workers who know a reasonable amount about disability still fail to protect themselves adequately because of other factors, such as poor budgeting, prioritization decisions, superstition or sloth.

Maybe the disability insurance community could deal with the survey similarity problem by checking with antitrust lawyers, setting whatever groundrules are necessary, and holding a disability insurance survey strategy conference call.

Participants could brainstorm and think up new and interesting topics to ask consumers, brokers, employers or others about, to make sure they aren’t all focusing on the same topics.

Some questions I’d like to see asked:

  • Of consumers who seem to be most ignorant about disability insurance: What media do you consume, and what ads do you actually see and remember? If you’re not learning about disability insurance, what products are you learning about, and how?
  • Of consumers who don’t believe they have disability insurance, are interested in the product, but aren’t sure if they can afford it: Realistically, how much cash could you spend on income protection? What benefits would you have to get for those outlays to justify the drop in latte consumption you might experience? And what if you could buy income protection with your Starbuck’s payment card?
  • Of consumers who are collecting disability benefits: What sources of cash do you have, and how well, or poorly, does your cash cover various types of expenses?
  • Of consumers who are superstitious: What kinds of alternative advisors do you consult, and why, and how did that work out for you?


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