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Insurers Continue Fight for Disability Insurance Awareness

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Some U.S. insurers are still out there trying to educate Americans about the need for private disability insurance, in the face of low interest rates, a focus on short-term thinking, and U.S. society’s general hostility toward use of private insurance to manage risk.

LIMRA recently reported, based on its own survey data, that only about 20% of all U.S. adult consumers have disability insurance; that about 30% of  the workers who can get disability insurance at work turn it down; and that just 4% of U.S. consumers appear to have a high level of knowledge about disability insurance.

This month, the disability insurance community is trying to wake U.S. consumers up with the 13th annual Disability Insurance Awareness Month (DIAM) campaign.

(Related: Disability Insurance Awareness Month Taps Into Financial Wellness Movement)

Here’s a look at what four insurers are doing and saying to support the DIAM campaign.

OneAmerica Financial Inc.

OneAmerica is supporting the DIAM campaign by releasing the results from a new survey of 1,017 U.S. adults ages 18 and older who are employed full-time or part-time.

The company found that about 41% of working Americans said they believe they have employer-sponsored disability insurance.

About 24% said they have voluntary disability insurance purchased at the worksite.

Here’s a look at the reasons survey participants gave for not having voluntary disability insurance:

  • Their employer doesn’t offer it (or: they don’t think their employer offers it): 47%.
  • They don’t see the value: 14%
  • They don’t think they can afford the coverage: 12%
  • They think they don’t need the coverage, because they’re healthy: 12%.
  • They have other, higher-priority expenses: 11%

Unum Group

Unum has been trying to sell more group life insurance voluntary benefits, but it’s still known for its disability insurance products.

One of the ways the company has tried to promote the DIAM campaign is to release a new version of its “top causes of disability” list. Here’s a look at the frequency of the top three causes of short-term and long-term disability at Unum group disability plans in 2018, with the 2017 frequency rates for  those causes in parentheses:

Short term disability

  • Pregnancy: 28% (28%)
  • Injury (excluding back): 11% (11%)
  • Joint disorders: 8% (8%)

Long term disability

  • Cancer: 16% (17%)
  • Injury: 13% (12%)
  • Back disorders: 13% (13%)

Unum is emphasizing that a disability insurer can help people return to work, as well as protecting them against loss of the ability to earn a paycheck. In the causes of disability update release, the company quotes Marcy Ledford, director of its workforce solutions unit, talking about return-to-work support programs.

Prudential Financial Inc.

Prudential has been trying to tie the need for disability insurance in with its press for the need for overall financial wellness.

The company has posted a new white paper about income protection, with a landing page with the headline, “Disability Happens. Protect Your Income.”

Here are Prudential’s three income protection takeaways:

  1. Most Americans could not cover three months of living expenses if their income were interrupted.
  2. Financial stress can raise the likelihood of incurring a short-term disability.
  3. Protecting against a loss of income due to disability helps mitigate the risk of financial damage.

Prudential is listing three executives from its Prudential Group Insurance unit as the authors of the white paper: Jessica Gillespie, who’s head of distribution; Kristin Tugman, who’s a vice president for health and productivity; and Leston Welsh, who’s head of disability and absence management.

Guardian Life Insurance Company of America

Lawrence Hazzard, head of disability product and marketing strategy for Guardian’s individual disability income business, has been out trying to talk to any reporter he can talk to about the need for disability insurance awareness.

Awareness seems to have improved slightly since the industry began organizing the DIAM campaigns, Hazzard said.

“People get it,” Hazzard said. “But they really don’t like talking about it. A lot of people find out what they really have when they go on claim.”

One challenge insurers face is finding ways is to adapt a product designed with year-round, full-time workers in mind for the gig economy, Hazzard said.

Another challenge is finding ways to help consumers deal with disability risk along with other, more attention-grabbing risks.

“It’s rare for anyone to come for disability insurance,” Hazzard said.

He said financial professionals need to be prepared to talk about the risk in conjunction with other risk management and financial planning matters.

Still another challenge, he said, is generational shifts in how clients want information.

Boomers tended to want recommendations from their advisors, Hazzard said.

Millennials do want mentoring, but “they’re very clear that they will make the decision,” Hazzard said.

— Read Maybe Employers Are Ready to Be Aware of Disability Insuranceon ThinkAdvisor.

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