One of the most-watched shows on the popular Discovery Channel is “Mythbusters,” a science entertainment program. The hosts, Jamie Hyneman and Adam Savage, use elements of the scientific method to test the validity of various rumors, myths, adages, news stories and Internet videos. The hosts use elaborate planning, design and construction to evaluate myths as “busted,” “plausible” or “confirmed.”
When it comes to disability insurance, I sometimes feel like a mythbuster myself. That’s because there’s still a lack of understanding about disability among consumers and employers — and a lot of myth-busting that needs to take place. A 2014 report by the Council for Disability Awareness reveals some of the eye-opening beliefs shared by employees and human resources professionals about disability. These findings open up a tremendous opportunity for brokers and insurance professionals to help educate their clients about the realities of disability and how they can better protect themselves and their families.
Myth No. 1: The odds of experiencing a disability sometime during a career are low.
More than 20 percent of workers under 40 believe they are more likely to win a big lottery jackpot than they are of missing work due to illness or injury. The odds of a 20-year-old becoming disabled at some point in his or her career are one in four. The odds of winning the lottery? One in 259 million.
Myth No. 2: Consumers could get by financially if they were disabled for lengthy time.
A majority of employees (67 percent) in the CDA survey identified income as one of the most-important things in their lives. But only 28 percent of employees identified income as something important to protect. And just 43 percent report having some sort of income protection. This finding seriously disturbs me. Less than 40 percent of adults in a 2014 Bankrate survey said they would have enough on-hand in a savings or checking account to pay for a $1,000 emergency room visit or car repair. So where’s the money going to come from?
Myth No. 3: Someone else will pay the bills.
Many people think that some other source of income — such as workers’ compensation or Social Security — will replace their income. But it’s often not true. Ninety-five percent of disability claims come from illnesses and accidents that are not work-related, and therefore aren’t covered by workers’ compensation. And nearly two-thirds of Social Security Disability Insurance claims were denied in 2012. For those that were approved, 93 percent of disabled workers received less than $2,000 per month. Can you live on that?
Myth No. 4: Consumers understand disability insurance.
Since most people seriously underestimate their risk of a disability and 30 percent of employees have never thought about preparing for one, the stakes are high and the potential for major financial loss is great. As insurance professionals, we can play a big role in helping bridge the knowledge gap about disability insurance and other financial protection benefits. We can begin by partnering with the HR department to help employees better understand the need for income protection and their overall benefits plan.
Research shows employees want this kind of information. A 2013 Colonial Life survey reveals the following items are very important to employees when making benefits decisions:
- 73 percent say understanding the benefits provided by their employer is very important.
- 67 percent say making sure they have enough financial protection for themselves and their families is very important.
A personal approach to benefits education proves effective.
Making the need for disability insurance relevant and meaningful to employees requires a customized approach. But that doesn’t necessarily mean additional cost to your agency. Many brokers partner with a carrier that provides complimentary benefits communication as part of its enrollment strategy.
A good benefits partner should use a wide range of communication methods, from personal, face-to-face counseling sessions to paper brochures and e-based technologies. Materials should be offered in simple-to-understand language. One-to-one communication can give the personalized attention needed to significantly improve employee understanding of benefits. Other services such as personalized benefits statements and paycheck illustrations can reinforce the value of an employer’s benefits package.
Today’s realities make disability education more important than ever.
The uncertainty of today’s economy makes America’s workers more vulnerable than ever. And helping them protect their paychecks has never been more important. As an insurance professional, you can help shatter the myths about disability and open up a conversation that could be life-changing for your clients.
Disability myths… busted!