At least one-third of surveyed full-time workers lack long-term disability insurance, according to a new report that sheds light on an opportunity for brokers. Employees need education to protect their financial wellbeing and to better understand the risks they face and how they can choose the right coverage through the workplace.

The Sun Life Financial report, “Will workers in America hope to dodge the bullet, remain blind to the risks, or simply hide? Perceptions, misconceptions, and best practices about long-term disability,” stems from a survey of more than 2,000 U.S. workers across the country.

The survey results suggest that a significant proportion of the American workforce remain unprepared for the current shift in workplace benefits, as more employers give workers the responsibility to decide whether to purchase group benefits such as disability, life, vision and dental insurance. 

“We must educate the U.S. workforce to understand the financial risks of long-term disability and learn best practices to mitigate their risks,” says Robert E. Klein, Jr., vice president of voluntary benefits. “If ten couples gather for a barbecue, we estimate that roughly three of them will have a partner who experiences a disability lasting one year or longer during their professional lifetimes.”

Sun Life Financial’s Ann Hibbard, specialist in employee and voluntary benefits marketing, says brokers should seize this market and help employees protect their paycheck.

“Brokers should really grasp onto the fact that voluntary benefits are here to stay,” says Hibbard. “The opportunity [is there] for them to continue to grow their business,  and they can leverage their expertise they have in the disability space now by looking at it and tweaking their pitch a little bit or their sales process. “

Hibbard stresses the importance of education. “It’s interesting to look across employees at companies and thinking what expertise they may have. Are they college grads? Are they technical workers? Knowing their specific needs is important.”

Workers who don’t buy group voluntary long-term disability coverage fall into three categories, the report says:

  1. The Gambler doesn’t think the risk justifies the cost of premiums
  2. The Mole hasn’t considered the issue and so remains blind to solutions
  3. The Ostrich finds the thought of disability too unpleasant to face.

Employees think they’re invincible, says Hibbard. “What it tells me is that they’re not aware of what they’re putting at risk by not having a long-term disability product,” she adds.
Workers under age 50, minorities, men and tech workers are more likely to purchase long-term disability insurance than other respondents.

“The workers under age 50 is just amazing to me,” says Hibbard. “We see the younger generation more sensitive to the fact that their paycheck could be at risk if they were hurt.” 

Other key findings include:         

—     More than one-third (38%) of workers whose employers offered them the option to pay for group long-term disability insurance declined to buy it, leaving most uninsured.

—     Many workers don’t understand key features of long-term disability insurance, and fail to anticipate how a disability may raise monthly living expenses.

“Because employers are footing less and less of the overall group insurance bill, workers in our country must take proactive steps to mitigate the financial risk of long-term disability,” says Michael E. Shunney, SVP and general manager for Sun Life Financial’s U.S. employee benefits group division. “As [the] survey shows, people don’t always think logically when they contemplate their risks. By encouraging workers to learn how to protect themselves and their families against income loss from long-term disability, we hope this survey helps the American workforce plan for more than a lifetime of financial security.”


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