It’s hard to image anything positive stemming from the recession. But a tiny silver lining of the economic downturn was it forced Americans to think about financial protection — and today more employees of all ages understand the value of having disability insurance, says Kathy Plummer, Unum’s director of disability product development. “Employees know they want this coverage.”

And they need it. Three-fourths of employees don’t have enough savings to cover six months of expenses, according to a Bankrate.com survey.

Still, participation remains low. Plummer estimates 35-37% of employees are covered by group DI.

Employer contributions are a big incentive for employees to participate — 86% of employees said they would buy DI if their employer covered half of a $30-a-month premium, according to a survey conducted by Matthew Greenwald and Associates. “Employees are more apt to sign up if there are some employer dollars there,” Plummer says.

That has been harder in recent years, as rising health care costs have forced employers to move DI costs onto their workforce, Plummer says. “We’re definitely seeing a shift,” she says.

Cost-shifting coupled with stagnant wages has led to higher costs for employees, despite slower-growing premiums since the Affordable Care Act become law. From 2003 to 2013, premiums have increased faster than median incomes for employees under the age of 65 in every state, according to the Commonwealth Fund.

Also see: Healthcare costs growing despite slower-rising premiums

“Folks’ wages aren’t growing as fast as their contributions are to medical plans,” says Terry Brown, senior vice president of CBIZ EAO Benefits based in Manasquan, N.J. “That’s a scary sign.”

Unum has a new solution so employers can still offer DI — a voluntary offering that allows employees to select from coverage options at group rates. Employers can offer LTD, STD or both, and whether or not the premiums are 100% employee-paid or shared. “We’re trying to keep it simple for the employee, easy for the employer,” Plummer says.

Helping employees get back to work or stay at work is an emerging trend among employers, says Brian Kost, director of The Standard’s workplace possibilities program. However, 63% of the 300 managers The Standard surveyed are unsure how to connect at-risk employees with assistance. “Instead of contacting their insurance broker or carrier for information, many managers we surveyed are contacting their legal department or another professional organization first for information,” Kost says. “In addition, these managers are strapped for time, noting they can only spend about eight hours a month helping with employee disabilities.”

DI not just for rank-and-file employees

A misconception about DI is that high earners don’t need it, says Tom Petersen, vice president of marketing at Valencia, Calif.-based Petersen International Underwriters. The same rule that two-thirds of a person’s income needs to be protected by DI applies to someone earning $1 million a year, he says, as the average person spends the same, 40%, on their mortgage. “The percentage stays the same but the dollars to back it up get bigger.”

That’s why Petersen International Underwriters launched a new DI product to protect stock options for executives at publicly traded companies. The intent is to protect those assets that companies might not honor should an employee be out of work, Petersen says.

High earners shouldn’t have to sell assets in order to cover a disability, he says. “That’s contrary to what insurance is designed to do in the first place. It’s to keep what you have, not start liquidating what you have.”

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