Large Majority of Workers Risk Financial Exposure In Event of Disability, Survey Finds

Consumer, Insurer Groups Work to Inform Americans

About Disability Income Insurance



Apr 23, 2001, 01:00 ET from American Council of Life Insurers

    WASHINGTON, April 23 /PRNewswire Interactive News Release/ -- A large
 majority of U.S. workers (82 percent) either have no long-term disability
 income coverage or coverage they believe is inadequate, according to a survey
 by the Consumer Federation of America (CFA) and the American Council of Life
 Insurers (ACLI).
     The joint survey also found that 73 percent of workers believe they would
 be adversely affected financially if they were unable to work for a year or
 longer.
     "Considering that most American workers believe they do not have adequate
 disability insurance, it is no surprise that 72 percent rate long-term
 disability income coverage as an important work-related benefit," said J.
 Robert Hunter, CFA's director of insurance and former Texas insurance
 commissioner.
     The survey also revealed that workers do not understand their disability
 income benefits at work nearly as well as they understand their work-related
 health insurance, life insurance, and retirement and pension benefits.  In
 fact, among those with disability coverage, 43 percent did not know their
 basic long-term disability insurance benefit.
 
     CFA and ACLI Will Inform Workers and Employers About Importance of
 Disability Income Insurance.
 
     Because of inadequate worker coverage and poor worker understanding of
 disability income insurance, CFA and ACLI have prepared a brochure, Long-Term
 Disability Income Insurance-Financial Protection for You & Your Family.  This
 free publication:
 
     *  Describes resources, including Social Security, that provide benefits
        to many disabled workers.
     *  Discusses the features of private disability income insurance including
        related cost factors;
     *  Gives tips on purchasing this insurance; and
     *  Provides a consumer checklist to evaluate long-term disability income
        insurance policies and their benefits.
 
     "Through publicizing the results of the survey and distributing the
 brochure, we hope to convince many workers and employers alike that long-term
 disability income insurance should be available at work," said Stephen
 Brobeck, CFA's executive director.  "In fact, this project spurred CFA to
 begin providing a disability insurance benefit to its employees," he added.
     "The survey results illustrate how widespread misunderstanding about
 disability is," said Carroll A. Campbell, Jr., ACLI's president and CEO.
 "Disabilities can strike anyone regardless of age, gender or income level-
 endangering our ability to put food on the table, cover our mortgage or rent,
 and meet other financial obligations.  Simply put, if you are the family money
 machine, how will your family function if you break down?"
 
     Facts on Work-Related Disability and Disability Income Insurance
 
     In terms of disability risk, the survey learned that seven percent of
 workers think they are very likely to become disabled and unable to work for
 one year or longer while 32 percent think that this risk is somewhat likely.
 There is no recent reliable information on worker disability risk.  But 1987
 actuarial tables released by the National Association of Insurance
 Commissioners indicated that a worker at age 35 has about a 24 percent chance
 of being disabled for more than 90 days during the remainder of his or her
 working life.
     Long-term disability income insurance helps workers and their families pay
 living expenses while a wage earner is unable to work.  It offers cash to help
 with mortgage payments, rent, groceries, utility bills, and other expenses.
 This insurance typically pays a percentage of the policyholder's annual
 income.  In individual policies where premiums are paid to policyholders,
 benefits are typically tax-free.  In group policies where premiums are paid by
 employers, benefits usually are subject to income taxes.
     Social Security also provides benefits to many disabled workers.  These
 benefits are based on a worker's salary and the number of years worked and
 contributed to Social Security, but they replace only a portion of one's
 salary.  To be eligible, all three conditions must be met: first, disability
 for five full calendar months; second, disability expected to last as least 12
 months or end in death; and third, inability to be gainfully employed at any
 occupation.
 
     Other Survey Findings
 
     The survey, commissioned by CFA and ACLI, was conducted by Mathew
 Greenwald & Associates, Inc.  A representative sample of 500 working Americans
 was questioned in 2000.
 
     Other survey findings include:
 
     *  Fifty-nine percent of respondents said they are covered either by group
        long-term disability income insurance or an individually purchased
        policy.  More than half had group insurance, and one percent of the
        respondents, including some who also have group insurance, have an
        individual policy.
     *  More than half of respondents with long-term disability income
        insurance (56 percent) believed it would be enough to protect their
        income should they become disabled, though 41 percent did not.
     *  Of respondents covered by long-term disability income insurance, one-
        half said they know the percentage of their income that would be
        replaced; on average, they believed it would replace 65 percent of
        their current income.
     *  Eighty-six percent of respondents said that long-term disability income
        insurance also should include a component of job training or other
        assistance that the person affected may need in order to return to
        work.
 
     To obtain one free copy of the new CFA-ACLI disability insurance brochure,
 Long-Term Disability Income Insurance-Financial Protection for You & Your
 Family, call 1-800-589-ACLI.  The publication number is 7200004.  The brochure
 also is available on CFA's Web site, http://www.consumerfed.org , and on
 ACLI's Web site, http://www.acli.com .
 
     CFA is a non-profit association of some 270 pro-consumer groups that was
 established in 1968 to advance the consumer interest through education and
 advocacy.
 
     The American Council of Life Insurers is a Washington, D.C.-based trade
 association.  Its more than 400 member companies offer life insurance,
 annuities, pensions, long-term care insurance, disability income insurance and
 other retirement and financial protection products.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X26374160
 
 

SOURCE American Council of Life Insurers
    WASHINGTON, April 23 /PRNewswire Interactive News Release/ -- A large
 majority of U.S. workers (82 percent) either have no long-term disability
 income coverage or coverage they believe is inadequate, according to a survey
 by the Consumer Federation of America (CFA) and the American Council of Life
 Insurers (ACLI).
     The joint survey also found that 73 percent of workers believe they would
 be adversely affected financially if they were unable to work for a year or
 longer.
     "Considering that most American workers believe they do not have adequate
 disability insurance, it is no surprise that 72 percent rate long-term
 disability income coverage as an important work-related benefit," said J.
 Robert Hunter, CFA's director of insurance and former Texas insurance
 commissioner.
     The survey also revealed that workers do not understand their disability
 income benefits at work nearly as well as they understand their work-related
 health insurance, life insurance, and retirement and pension benefits.  In
 fact, among those with disability coverage, 43 percent did not know their
 basic long-term disability insurance benefit.
 
     CFA and ACLI Will Inform Workers and Employers About Importance of
 Disability Income Insurance.
 
     Because of inadequate worker coverage and poor worker understanding of
 disability income insurance, CFA and ACLI have prepared a brochure, Long-Term
 Disability Income Insurance-Financial Protection for You & Your Family.  This
 free publication:
 
     *  Describes resources, including Social Security, that provide benefits
        to many disabled workers.
     *  Discusses the features of private disability income insurance including
        related cost factors;
     *  Gives tips on purchasing this insurance; and
     *  Provides a consumer checklist to evaluate long-term disability income
        insurance policies and their benefits.
 
     "Through publicizing the results of the survey and distributing the
 brochure, we hope to convince many workers and employers alike that long-term
 disability income insurance should be available at work," said Stephen
 Brobeck, CFA's executive director.  "In fact, this project spurred CFA to
 begin providing a disability insurance benefit to its employees," he added.
     "The survey results illustrate how widespread misunderstanding about
 disability is," said Carroll A. Campbell, Jr., ACLI's president and CEO.
 "Disabilities can strike anyone regardless of age, gender or income level-
 endangering our ability to put food on the table, cover our mortgage or rent,
 and meet other financial obligations.  Simply put, if you are the family money
 machine, how will your family function if you break down?"
 
     Facts on Work-Related Disability and Disability Income Insurance
 
     In terms of disability risk, the survey learned that seven percent of
 workers think they are very likely to become disabled and unable to work for
 one year or longer while 32 percent think that this risk is somewhat likely.
 There is no recent reliable information on worker disability risk.  But 1987
 actuarial tables released by the National Association of Insurance
 Commissioners indicated that a worker at age 35 has about a 24 percent chance
 of being disabled for more than 90 days during the remainder of his or her
 working life.
     Long-term disability income insurance helps workers and their families pay
 living expenses while a wage earner is unable to work.  It offers cash to help
 with mortgage payments, rent, groceries, utility bills, and other expenses.
 This insurance typically pays a percentage of the policyholder's annual
 income.  In individual policies where premiums are paid to policyholders,
 benefits are typically tax-free.  In group policies where premiums are paid by
 employers, benefits usually are subject to income taxes.
     Social Security also provides benefits to many disabled workers.  These
 benefits are based on a worker's salary and the number of years worked and
 contributed to Social Security, but they replace only a portion of one's
 salary.  To be eligible, all three conditions must be met: first, disability
 for five full calendar months; second, disability expected to last as least 12
 months or end in death; and third, inability to be gainfully employed at any
 occupation.
 
     Other Survey Findings
 
     The survey, commissioned by CFA and ACLI, was conducted by Mathew
 Greenwald & Associates, Inc.  A representative sample of 500 working Americans
 was questioned in 2000.
 
     Other survey findings include:
 
     *  Fifty-nine percent of respondents said they are covered either by group
        long-term disability income insurance or an individually purchased
        policy.  More than half had group insurance, and one percent of the
        respondents, including some who also have group insurance, have an
        individual policy.
     *  More than half of respondents with long-term disability income
        insurance (56 percent) believed it would be enough to protect their
        income should they become disabled, though 41 percent did not.
     *  Of respondents covered by long-term disability income insurance, one-
        half said they know the percentage of their income that would be
        replaced; on average, they believed it would replace 65 percent of
        their current income.
     *  Eighty-six percent of respondents said that long-term disability income
        insurance also should include a component of job training or other
        assistance that the person affected may need in order to return to
        work.
 
     To obtain one free copy of the new CFA-ACLI disability insurance brochure,
 Long-Term Disability Income Insurance-Financial Protection for You & Your
 Family, call 1-800-589-ACLI.  The publication number is 7200004.  The brochure
 also is available on CFA's Web site, http://www.consumerfed.org , and on
 ACLI's Web site, http://www.acli.com .
 
     CFA is a non-profit association of some 270 pro-consumer groups that was
 established in 1968 to advance the consumer interest through education and
 advocacy.
 
     The American Council of Life Insurers is a Washington, D.C.-based trade
 association.  Its more than 400 member companies offer life insurance,
 annuities, pensions, long-term care insurance, disability income insurance and
 other retirement and financial protection products.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X26374160
 
 SOURCE  American Council of Life Insurers