Most young adults lack disability insurance

By BenefitsPro

By Amanda McGrory-Dixon

Despite placing high value on earning income, most adults in their 20s and 30s do not have disability insurance, which protects their income in cases of illness or injury, according to a recent survey by LearnVest and The Guardian Life Insurance Company of America.

Specifically, only 35 percent of respondents own disability insurance policies from their employers or on their own. This is significantly lower than the 57 percent of respondents who have life insurance. Of those who do not have disability insurance, 25 percent of respondents say they lack coverage because of cost, and 21 percent of respondents say they do not have it because they do not believe job risks require buying this type of plan.

However, young adults might want to reconsider this thinking. The Social Security Administration finds that more than one in four of today’s new entrants to the workforce will face a disability at some point in their careers. Furthermore, only 47 percent of respondents report having emergency funds.

According to the Council for Disability Awareness 2012 Long-Term Disability Claims Review, disability is most often attributed to muscle, back and joint disorders; spine and nervous system-related disorders; cardiovascular and circulatory diseases; and cancer.

“It’s difficult to convey the risks associated with disability – especially to young people, who may feel they’re invincible,” said Lawrence Hazzard, vice president of product strategy at Berkshire Life Insurance Company of America, the Guardian company that issues individual disability income insurance.

“The word ‘disability’ leads many to think of catastrophic injuries, but more often disability means having back problems, being temporarily sidelined as you recover from cancer, or even battling depression. Being taken out of the work force for one of these issues – even for a relatively short time – can have lifetime consequences without the proper income protection in place. Workers need to take the initiative to protect that asset throughout their working lives, especially when you consider the tremendous investments they’ve made for the sake of gainful employment.”

The survey also finds that 89 percent of respondents have not had friends or families on disability, which is a major influencer in how they view the benefit. In fact, 39 percent of respondents are more inclined to rely on anecdotal information than professional advisers at 19 percent.

“The research with LearnVest shows that younger workers feel strongly about the value of their work, leading employers and employees alike to have a shared goal of getting back to work as soon as possible,” said Ray Marra, vice president, group products at Guardian. “The result of more employees getting disability insurance with employers having absence management programs is a more productive lifestyle for the employee and improved productivity for companies. Addressing the issue of disability insurance awareness is a win-win.”

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