The survey included 500 U.S. employees and found that 40 percent of those surveyed had no coverage and 41 percent had coverage they believed to be inadequate to cover their family’s financial needs if they were to become disabled. Among the workers surveyed, 58 percent were covered by an employer-sponsored long-term disability plan and only 1 percent had an individual disability policy. Nearly 50 percent of the respondents to the survey stated that they did not know what percentage of income would be replaced by their long-term disability policies.
Researchers found that 32 percent of employees surveyed believed that a disability lasting one year or more was deemed “somewhat likely” and only 7 percent deemed it “very likely.” Based on information from the National Association of Insurance Commissioners, a 35-year-old worker has a 24 percent chance of becoming disabled for more than 90 days during his or her working life.
Long-term disability insurance is designed to cover expenses for an employee and his or her family if the employee is unable to work due to an illness or injury. Usually long-term disability policies pay two-thirds of the employee’s wage if that employee is unable to work for three to six months and the benefits last for a specified time period or until the employee reaches retirement age. Long-term disability benefits begin after short-term disability coverage has been exhausted, which is typically 90 days.
Employers are now slowly beginning to sign up for group disability policies for their employees. Group disability sales have increased over the years for both long-term and short-term policies. John Hewitt & Associates, a Portland, Maine-based consulting firm, says that most companies offer disability insurance to attract employees or retain them.