The top analyst at the American Council of Life Insurers is observing Disability Insurance Awareness Month by thinking about the kinds of data policy makers need to understand the country’s paycheck protection gaps.
Andrew Melnyk, the chief economist at the ACLI, talks about disability insurance data definitions and needs in a new commentary.
In the commentary, which was published on the Council for Disability Awareness (CDC) website, Melnyk was responding to another CDA commentary, about workers’ ownership, or lack of ownership, of private disability insurance.
Melnyk notes in the commentary that one important question is whether individual workers have private disability insurance, but that another important, somewhat different question is whether households, and the people in the households, have protection from private disability insurance.
Still another question is definining the class of people who ought to have disability insurance, Melnyk rights.
Traditionally, federal survey programs have assumed that the people who need disability insurance are adults workers who are too young to collect Social Security benefits. That has been adult workers under age 65. The “normal” Social Security retirement age has now increaed to 66 and is on track to increase to 67 for people born in 1960 or later.
Today, however, “entering is increasingly a multi-stage process, rather than a specific date,” Melnyk writes.
Because of that shift, Melnyk writes, some “retired” households may still have an attachment to the labor force. Even in a household in which the worker with the higher peak income has retired, a spouse or partner might still be working part-time and might still have some need for disability insurance, Melnyk writes.
The ACLI has been collecting disability insurance penetration data using traditional classifications and definitions. The group found, based on household survey data collected in 2016 and 2017, that only 46% of “not retired” households have any form of private disability insurance.
Some of the rest were getting some protection from Social Security Disability Insurance. Others had no public or private income protection of any kind.
— For more disability insurance market coverage, see our Disability Insurance story archive, on ThinkAdvisor.