Why Single Workers Need Disability Income Insurance

MetLife Study Finds Disability Income Insurance a Valuable Companion for Singles Wanting to Protect Their Income

Nearly two-thirds (63%) of full-time workers who are primary wage earners and not married are very concerned about having enough money to pay bills during a period of sudden income loss, according to MetLife's 9th Annual Study of Employee Benefits Trends. Despite this concern, however, nearly 60% of these single workers have no disability insurance to protect their income in the event an illness or injury prevents them from working.

"Disability income insurance is an essential part of a personal financial safety net. It is simple - if you are dependent on your paycheck, you should protect that income," said Clea Barth, vice president, Health Risk Products for MetLife. "More than a third of unmarried men and more than half of unmarried women who are primary wage earners say they live paycheck to paycheck. It is important to plan ahead in case that paycheck stops altogether."

Disability insurance replaces a portion of income when people are unable to work for a period of time due to an illness or injury. This income allows individuals to continue to pay essential living expenses, including food, utilities, home and car payments, until they are able to return to work.

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Feeling Invincible

While 65% of single, working primary wage earner women admit to being very concerned about their financial security in the event of a disability or serious illness, only 44% of single, working men say the same - seeming to indicate that men perceive a potentially disabling illness or injury as less of a realistic risk.

However, even if you are young and healthy, it is important to consider disability insurance. For example, analysis of MetLife 2010 disability claims data finds that:

10% of short-term disability claims approved were for men ages 21 to 30. The average claim duration was 40 days.

22% of short-term disability claims approved were for women ages 21 to 30. The average claim duration was 46 days.

5% of long-term disability claims approved were for men ages 21 to 30. Top causes were fractures, back strain, cancer. For closed claims the average duration was 32 months.

10% of the long-term disability claims approved were for women ages 21 to 30. Top causes were pregnancy, depression, and back strain. For closed claims the average duration was 21 months.

For more complete income protection, individuals should have both short-term and long-term disability benefits.

• Short-term disability plans replace income for the early period of a disability. In general, the plans provide benefits for periods that range from as little as two weeks up to two years.
• Long-term disability benefits help replace income for an extended period, often until the disabled person turns 65.

Social Security disability benefits are not available if an individual expects to be out of work for less than a year and, if paid, will likely be deducted from group disability benefits. In addition, most causes of disability are not work-related and, therefore, not covered by workers' compensation.

Getting Started

According to the MetLife study, nearly three-quarters of employers offer some type of disability coverage, and Paul D. Taylor, vice president, MetLife Group Disability, encourages employees to learn what they have available through the workplace.

"A good place to start is to see if disability insurance is available to you at work. Take advantage of your workplace benefits, and if additional protection is needed, consider supplementing this coverage with an individual disability income policy, which can help replace bonus or incentive pay that may not be covered through a group plan." Taylor suggests. "While some disability insurance coverage is obviously better than no coverage, a good rule of thumb is to protect 60% - 80% of your after-tax income so essential monthly expenses will be covered. There is no substitute for good advice so if you don't understand your coverage or how to determine your needs, seek professional assistance."

The MetLife study found that while only about a third (33%) of unmarried workers feel very confident in making the right financial decisions, about half (48%) don't consult with anyone about their financial matters.

Methodology

The 9th Annual MetLife Study of Employee Benefits Trends was conducted during the fourth quarter of 2010 and consisted of two distinct studies fielded by GfK Custom Research North America. The employer survey comprised 1,508 interviews with benefits decision-makers at companies with staff sizes of at least two employees. The employee sample comprised 1,412 interviews with full-time employees age 21 and over, at companies with a minimum of two employees.

MetLife has been providing employers with quality disability products and services for over 50 years and is a leading disability carrier in the industry, with over $2.35 billion of premiums and equivalents in force, according to the 2009 U.S. Group Disability Survey, LIMRA International.

About MetLife

MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), the leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 60 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East.

Insights, Analysis, and Developments

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 2011/05/03, this content may have been edited for style, clarity, or brevity.