Group disability insurance and the need for such coverage is one of the most misunderstood areas of risk for employees and individuals. Did you know that 70% of employees in the private sector have no long-term disability insurance?. In fact, over 100 million workers have no private disability income insurance of any kind. Consider for a moment these statistics:
- In just the past hour, almost 3,000 Americans became disabled. That statstic equals 49 every minute.
- Over 51 million Americans – 18% of the population – are classified as disabled.
- Every second another disabling injury occurs in the US. Every four minutes the injury is fatal.
- Nearly one-third of Americans entering the work force today will become disabled before they retire.
- Nearly 7 million workers currently receive Social Security Disability benefits. Almost half are under age 50
According to the Council for Disability Awareness (CDA) proprietary research reveals that 64% of wage earners believe they have a 2% or less chance of being disabled for 3 months or more during their working career. The actual probability is closer to 30%.
Clearly, most people think that disability is something that only happens to a few people. The facts tell a different story. The reality is that accidents or illnesses will force 1 in 5 U.S. employees to miss work for at least a year before they turn 65. Surprisingly, the average long-term disability absence extends for 2½ years. One in 7 of Americans can expect to be disabled for more than five years.
The most challenging aspect of disability is that it prevents people from being able to earn a living, pay bills and provide for their families. The financial impact to families of not having any kind of disability insurance is troubling at best. Each year 350,000 personal bankruptcies are blamed on injuries and unexpected illnesses that cause disability. In fact, a recent Harvard University report reveals that 62 percent of all personal bankruptcies filed in the U.S. in 2007 were due to an inability to pay for medical expenses.
If you think Social Security or Workers’ Compensation will cover disability expenses consider these points:
- The the average monthly benefit paid by Social Security Disability Insurance is just $1,004.
- More claims are denied than approved. More than half of the 2.1 million workers who applied for SSDI benefits in 2005 were denied. Less than half – 39% – were approved.
- Only 10% of disabling accidents and illnesses are work related. The other 90% are not, therefore workers compensation does not provide coverage.
For employers who wish to help their employees address this significant financial security issue, The Crichton Group can work with your company to build a customized solution to help protect the interests of your employees while excercising fiscal responsibility for your company. We encourage you to contact us to discuss the options available to your company relative to this important area of risk for your employees.
Source: The Council of Disability Awareness