The nonprofit Council for Disability Awareness warns that the number of employees protected by private disability income insurance declined in 2011 for the third consecutive year, while the number of long-term disability claims continued to rise.

Top long-term disability insurance carriers paid $9.3 billion in 2011, a 2% bump over 2010. Insured lives covered by employer-paid and employer-sponsored group long-term disability programs declined by half a percent.

CDA says that American workers may think they're safer than they are, leading them to gamble with their finances.

"Our research continues to demonstrate that workers dramatically underestimate their risk of disability [by a factor of 10 or more]," says Barry Lundquist, CDA president, "and too often don't think about protecting their most valuable financial resource - their income."

If 10 couples gathered together, officials from Sun Life Financial estimate, three will include a partner who experiences a disability of at least a year at some point during their professional life.

According to a survey published by Sun Life this year, at least one-third of full-time workers lack long-term disability insurance. The survey indicates that those under age 50, men, minorities and tech workers are more likely to have the coverage than other groups.

"The aging workforce and a painfully slow jobs recovery are clearly having an impact," says Lundquist. "Also, the jobs environment continues to be an obstacle to returning recovering workers to productive employment."

With such a large portion of long-term disabilities being either unpreventable or unforeseeable, Lundquist says providers have an obligation to talk to wage earners about what they can do.

"Since many employers are moving toward voluntary [benefits], they need to educate their employees," he says, adding that sponsors should "examine their own plan" as well.

Michael Concannon, executive vice president of group benefits business for the Hartford Financial Services Group, agrees, noting The Hartford has seen providers "retune their model" to try to accommodate long-term need.

"I think the most important thing is to educate people as to what's at risk," Concannon says. "There's a huge education/awareness gap, particularly with disability ... It's not a risk that people connect with on a day-to-day basis."


Disability dojo

To that end, CDA has launched a new national campaign with its own quirky new website,, which combines a slew of factoids ("Back pain is responsible for more than one in four income interrupting disabilities") with risk calculators and video-game style interaction in which Web surfers do dojo-battle with personifications of their risks like Dreaded C or Calamity J. Defend Your Income also has a number of research projects underway, geared toward understanding how employers and employees use disability coverage.

"Eighteen of the top disability insurance companies have gotten together [and] contributed their top marketing person," Lundquist says. "We are operating as though we are one entity, speaking with one voice on behalf of the industry really to educate people. We want to be very clear and direct and concise, which is hard for any one company to do.

"It's an engaging, interesting way to learn about disability and to help people plan and protect themselves."

But of course planning and education are only part of the process. Many believe they can't afford long-term disability, Concannon says, even against the expensive alternatives. But, he adds, "where employers are going to benefit" is with the shift toward more voluntary benefits and levels of coverage. Seventy-five percent of wage-earners say they value it when employers bring them voluntary benefits, he says, and there's a shift going on allowing for as much or as little disability insurance as is thought necessary.

"It's moving away from a binary decision," he says.

Michael E. Shunney, vice president and general manager for Sun Life's employee benefits group division, says "people don't always think logically when they contemplate their risks." He says the coverage is a crucial part of "a lifetime of financial security."

"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," Shunney says.

The Hartford Group hastens to point out that employees with long-term disability get back to work sooner than those without.

"I think of an HR person sitting across from someone who has to leave because of disability and having to say, 'at this point, your pay will stop,' ... and it's awful," Lundquist says. "No one wants to have that conversation. And it's so avoidable."

The CDA says diseases of the musculoskeletal system and connective tissue (osteoporosis, arthritis, etc.) continue to be the leading cause of disability claims, by a large margin. New claims resulting from pregnancy and childbirth complications increased in 2011, now accounting for more than 9% of long-term claims for women.

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