Any benefit guru knows the importance of disability insurance. In fact, it should be in the same category as vision, dental, and medical insurance in terms of its necessity. It’s hard to convey that to someone who doesn’t know much about benefits, though.
FACT: Most employees spend 30 minutes reviewing their benefits every year. And yes, that includes benefit education.
Brokers have been trying to figure out a way to explain the value of disability insurance for years. Employees may dismiss it because they’ve never faced a situation where they couldn’t earn their pay due to an injury or illness. Because of that, dishing out facts like, “1 in 4 adults will become disabled before they reach retirement age” may be useless. “It’s never happened to me. Why would I need to enroll in this benefit?”, an employee might say.
Addressing the need should be easy, so why not speak in a language everybody can relate to? When conveying the importance of disability insurance, people need to remember one thing:
Chances are that every adult has faced financial hardship one way or another since graduating from high school. Everybody knows the value of their paycheck and knows their life would get flipped upside down without it. If you were scrolling through THEbenefitsHUB (our online benefits enrollment system), would you be more likely to stop on “disability insurance” or “paycheck protection”? Considering that half of all Americans don’t have enough money in their savings to pay off an unexpected $400 bill, chances are “paycheck protection” would get more attention!
If you are a broker or plan administrator looking for educate employees on the need of this valuable benefit, here are some statistics to throw their way:
“The average disability claim lasts almost 13 months and mortgage foreclosures due to disability occur 16 times as often as they do for death. Yet, more than 40 percent of full-time workers do not have coverage in the event of a short- or long-term disability to protect against a loss of income.” (Source: Smart About Money)
Only 48 percent of American adults indicate they have enough savings to cover three months of living expenses in the event they’re not earning any income. (Source: Federal Reserve)
Most Americans are better prepared financially to die than to become disabled, although the chances are at least three to five times greater of a disability occurring. (Source: Sound Financial Plan)
Are you an employee, employer, broker, or plan administrator that has more questions about paycheck protection? Get in touch with us by tweeting us @mgmbenefits or sending an email to firstname.lastname@example.org!