Disability Income Protection Gap Affects 60% of Workers

Author: MetLife
Published: 2010/04/29 - Updated: 2026/02/04
Publication Type: Data & Statistical Analysis
Category Topic: Insurance - Related Publications

Page Content: Synopsis - Introduction - Main - Insights, Updates

Synopsis: This research presents findings from a MetLife study examining the financial and emotional consequences faced by Americans who experienced work-disabling conditions lasting six months or longer. The data, gathered from 300 participants aged 25-55 who returned to work after non-workers' compensation disabilities, reveals critical gaps in personal financial preparedness. Sixty percent of respondents lacked any disability income protection, while those with coverage typically protected only one-third of their income - insufficient for maintaining financial stability during recovery. The study provides valuable quantitative evidence for workers, employers, and financial planners about the relationship between coverage adequacy and recovery outcomes, demonstrating that individuals with inadequate protection face substantially higher rates of depression, relationship strain, and long-term financial hardship including retirement account depletion and increased debt - Disabled World (DW).

Introduction

Less Than Half of Americans out of Work Because of a Disability Had Income Protection

Three in five individuals who were out of work for at least six months because of a disability did not have disability income protection, according to findings from a new MetLife study released today. The MetLife Study of the Emotional and Financial Impact of Disability also found that among those individuals who did have coverage, only about one-third of their income, on average, was protected. This is likely insufficient to meet their needs since financial recovery among survey participants was slow - only 17% of those whose disability occurred at least a year ago felt that they had completely recovered financially.

"People often feel invincible and tend to drastically underestimate the possibility of experiencing a disabling accident or illness. Although the reality was different, more than half of study participants - even those without any disability income protection - said they felt financially prepared prior to their disability," said Lynn Dumais, vice president, Individual Disability Income for MetLife. "Now is the time to shore up your personal financial safety net which, in turn, can also have a positive impact on emotionally weathering a serious illness or injury."

Main Content

Inadequacy of Coverage Can Take Emotional and Financial Toll

While experiencing a disabling illness or injury negatively impacted the emotional and financial well-being of all study participants, having some income protection in place helped blunt the severity of these effects. Adequacy of coverage, however, makes the most significant difference.

Emotional Impacts

90% of study participants who said they had inadequate coverage felt that the disability had a major or devastating effect on their emotional lives, compared to 63% of those who felt their coverage was at least somewhat adequate.
54% of those with inadequate coverage felt that their disability had a major or devastating impact on their relationships, compared to 37% of those whose coverage was felt to be at least somewhat adequate.
77% of those with inadequate coverage experienced feelings of depression and anxiety during their disability, compared to 58% of those whose coverage was at least somewhat adequate.

Financial Impacts

88% of those with inadequate coverage said the disability had a major or devastating impact on their feelings of financial security, compared to 61% of those who felt that their coverage was at least somewhat adequate.
77% of those who felt that their coverage was inadequate reported withdrawing money from savings, investments or retirement accounts, compared to 51% of those who felt coverage was at least somewhat adequate.
50% of those with inadequate coverage said they borrowed money from friends or family as a result of the disability, contrasted to 24% of those whose coverage was at least somewhat adequate.
62% of those with inadequate coverage said they are currently living paycheck-to-paycheck, compared to 37% of those whose coverage was at least somewhat adequate.

"These findings underscore how the emotional and financial effects of a disability may last long after a person has recovered physically," adds Dumais. "It is important to take advantage of resources such as financial advisers, your employer, as well as online tools, to determine your protection needs."

Returning to Work

The MetLife study found that, in general, people with disability income protection coverage return to work three months sooner than the people without coverage. More significantly, the study found that they were also about twice as likely to return to the same employer in the same function than those without coverage.

About the Study

The MetLife Study of the Emotional and Financial Impact of Disability was conducted in March 2010 by Zeldis Research Associates, and surveyed 300 people, ages 25 to 55, who had experienced a non-workers' compensation/ non-pregnancy disability that prevented them from working for six months or more but have since returned to work. The disability they experienced occurred in the past 10 years.

About MetLife

MetLife is a subsidiary of MetLife, Inc., a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions.

Insights, Analysis, and Developments

Editorial Note: The stark contrast between perceived and actual financial preparedness highlighted in this study raises important questions about how Americans assess their vulnerability to disability. While more than half of participants believed they were financially ready before their disability struck, the reality proved otherwise for the majority. Perhaps most telling is the finding that adequate coverage shortened return-to-work timelines by three months and doubled the likelihood of returning to the same employer - suggesting that financial security during disability doesn't just protect bank accounts, but preserves career continuity and professional relationships that might otherwise be permanently disrupted by extended absence - Disabled World (DW).

Attribution/Source(s): This quality-reviewed publication was selected for publishing by the editors of Disabled World (DW) due to its relevance to the disability community. Originally authored by MetLife and published on 2010/04/29, this content may have been edited for style, clarity, or brevity.