Understanding the Importance of Disability Insurance for Millennials
Zip-lining in Costa Rica. Parasailing in Cabo. Skiing in Colorado. In today's world, millennials have more access than ever before to new experiences, new adventures, and new opportunities to cross items off their bucket lists.
Because of their active lifestyles, disability insurance is an important part of their benefits package.
Disability insurance exists to provide financial protection if the worst should happen. However, many millennials choose to forgo disability insurance.
Common Reasons Millennials Do Not Elect Disability Insurance
Educating millennials on the importance of disability insurance is crucial during your enrollment season. Here are a few of the common reasons millennials don't elect disability insurance, and how to address those concerns.
"It won't happen to me"
What many people don't know is disabilities preventing them from working are far more common than they may think. More than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.1
Contrary to popular belief, accidents are NOT usually the culprit of disability. Injuries such as fractures, sprains, and strains of muscles and ligaments are the most common reasons for long-term disability claims.2 Because of this, it’s important for millennials to understand the chances of becoming disabled may be much higher than they realize.
“Money is tight”
One of the main reasons millennial employees often choose to forgo disability insurance is because they think it will increase their monthly financial expenditures. However, the cost of not having disability insurance may be even higher. Without disability insurance, employees may deal with financial issues as they pay for living costs without a salary and may eventually depleting their savings.
Disability insurance is often called "income protection" because it provides a percentage of salary in the event of a qualified illness or injury. This may help give peace of mind for employees as they live their lives to the fullest with fewer financial fears.
How to Educate Your Employees on Disability Insurance
When discussing disability insurance with your millennial employees, consider asking them the following question: If you were to become disabled, how long could you survive without a paycheck?
This question can provide one of the most revealing insights into the amount of disability insurance an employee should elect. Employees sometimes believe that they will be able to use their sick days or paid time off to cover unexpected situations, but the duration of the average long-term disability claim is 34.6 months.3
Once you've established the importance of disability insurance, provide numerous educational opportunities for your employees to learn about disability insurance. Group sessions, materials, and one-on-one appointments with your benefits provider can help provide peace of mind for your employees as they choose the best disability insurance for their stage of life.
This blog is up to date as of May 2020 and has not been updated for changes in the law, administration or current events.