Understanding the Importance of Disability Insurance
While disability insurance is often considered a staple of a comprehensive benefits program, one in three working Americans do not have adequate disability coverage.1
If you don’t offer disability insurance, how will you help your employees and their families in the event of a disabling illness or injury?
How can a disability impact employers?
When one of your employees is injured, your human resources representative is likely the first person to hear about it. The employee will ask, “I have to be out of work—now what?” And, you’ll want to offer a solution. That’s where disability insurance can help.
First, it’s extremely important to ensure your employees are educated on what disability insurance is, as well as its importance. American Fidelity Account Executive, Julie Anderson, notes:
“When a disability occurs and an employee didn’t apply for a disability policy, unfortunately, the employer is who the employee first turns to for assistance. There, they learn that they don’t have the coverage. Sometimes, employees don’t take accountability for not opting in or not participating in learning during the annual open enrollment, and that can be a tough conversation to have.”
Offering disability insurance also provides a way to formalize your support process for employees in need. Jared Levy, Regional Manager, says:
“In some situations where a disability insurance benefit is not offered, the employer will provide extended leave or pay in an effort to help. However, there can be a lot of issues with this if there is not a formalized program in place. If employers help one employee and not another, they could be at risk. Having a formalized policy in place with disability insurance can help cover these situations and alleviate the employer’s responsibility should something occur.”
How can a disability impact employees?
Disability insurance can help protect employees’ finances. If employees must miss work due to a qualifying injury or illness, they will still have bills to pay—like mortgages, utilities, medical insurance premiums, groceries, and car payments.
Without a paycheck to help pay these bills, employees can be at a huge financial risk. In fact, 66.5% of bankruptcies were brought about by medical bills families were unable to afford, or income loss due to illnesses.2
Executive Account Manager Carrie Burns, notes:
“Your employees are dependent upon their paychecks – not many can go more than a couple of weeks. If your employees were injured or ill, how would they handle that in today’s environment?”
Offering Disability Insurance is Important
Disability Insurance can help your employees continue to financially support their families, and help sustain what they have worked for most of their lives. Offering this benefit to your employees helps provide a way for you to support them in their time of need, which can positively affect employee retention and recruitment.
Sales Manager Scott Adkins explains:
“When an employer provides a benefit to help employees’ families, it shows their employees they care about them both at and away from work. This shows the employee they are more than just a number, and that you care about their well-being and their family. Disability insurance helps protect employees’ way of life. It can help them put groceries on the table, or help their kids still participate in sports and piano lessons. As an employer, offering this benefit says, ‘I care about your way of life.’”
Related Disability Articles
Did you know your disability coverage does not automatically increase when you receive a raise? Evaluate your policy annually to ensure coverage.
If you have access to state paid medical leave, you may question if you need supplemental disability insurance. The short answer is YES.
Do you have enough sick leave to cover a short- or long-term disability?