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Short-Term Disability Insurance Mystifies Workers: Breeze

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What You Need to Know

  • Breeze sells disability insurance from Principal and Assurity.
  • The company surveyed about 1,000 women who had taken maternity leave in the previous year.
  • Only 40% said they went into maternity leave with short-term disability insurance while 35% said they didn't have that type of insurance.

Even many workers who have an obvious need to use short-term disability insurance benefits soon may have no idea what the product is, or how the product works, according to new survey data from Breeze.

Mike Brown, an executive at the disability insurance web broker, talked about that confusion in a summary of results from a recent online survey of 1,000 women who had taken unpaid maternity leave sometime between July 2020 and July 2021.

Only 40% of the survey participants said they went into maternity leave with short-term disability benefits, obtained through an employer plan or through an individual policy.

About 25% of the participants would not or could not say whether they had short-term disability benefits.

Another 35% said they had no short-term disability insurance they could use to help compensate for lost wages.

When Breeze asked the women who said they had no short-term disability benefits why they were uninsured, the most common reasons cited were:

  • I knew nothing about disability insurance: 33%
  • I tried applying once I was already pregnant and learned my pregnancy would be counted as a pre-existing condition and not be eligible for disability insurance benefits: 21%
  • I thought I’d be automatically eligible for paid maternity leave through the government or my employer: 16%

Breeze and other disability insurance marketers need to make sure that workers understand what disability insurance is, and why workers have to think about the product even when they feel fine, Brown says.

One key message for clients who might become mothers is, “Plan ahead and apply before your pregnancy, so it is not considered a pre-existing condition,” Brown added.

Breeze

Breeze is the marketing name for Modern Insurance Agency LLC, an Omaha, Nebraska-based web broker that was founded in 2019.

It is one of the “insurtech companies” that has been trying to go beyond selling products such as term life insurance and health insurance online and to offer consumers a web- and mobile-based way to buy more complicated, medically underwritten products.

The company now sells disability insurance from units of Principal Financial Group and Assurity Life Insurance Company, along with critical illness insurance from Assurity.

Short-Term Disability Policy Details

The full Breeze survey report includes details about the individual short-term disability coverage that some of the participants had purchased. The participating women said that their policies:

  • Replaced an average of 50% of their pre-disability monthly income.
  • Cost an average of $94.07 per month.
  • Had a median benefit period of three months.

A New Benefits Market?

Breeze also asked participating women about a type of insurance product that appears not to exist in the United States: a stand-alone policy that would protect new parents against the risk of a child being born with special needs, such as severe cerebral policy.

About 51% of the women said they would buy a policy like that, and 24% said they either were not sure or would have to find out what the policy would cost.

The women who said they would or might buy a special needs risk policy suggested an average monthly premium of $85.90 when asked about they would be comfortable with paying for the coverage.

(Image: WS-Design/Adobe Stock)