Common Reasons Employees Don’t Elect Disability Insurance
You may understand the importance of AF™ Disability Income Insurance, but you may be asking: Why aren’t more employees taking advantage of it? There are myriad reasons why employees aren’t electing the coverage.
To help shed light on those reasons, we spoke with some of our account managers about what they hear during enrollments.
Lack of Understanding
Many employees don’t understand what disability insurance covers, how it works, or why it’s needed.
When helping employees understand the benefit, Jeff Snyder, Executive Strategic Account Manager, said, “Some questions we ask employees are: Do you rely on your salary? Is your salary important to you? This helps them understand why they need income protection coverage with disability insurance.”
A common reason some longer-tenured employees won’t elect disability insurance is because they have built up weeks—possibly even months—of sick days.
Executive Account Manager Tangee Franco shared a story about why depending upon sick days isn’t enough:
“When people tell me they have a ton of sick leave and they’ve never used it, I often share my personal story. I had been with my company for almost 24 years and had only taken two days. My husband had a stroke and was in the hospital, so I took off for three months to care for him.
This leave exhausted all the sick days I had built up. The disability insurance didn’t pay for that time, of course, but now, if I were to experience a disabling injury or illness, I would need disability insurance. After I tell them my story, I ask them, what if something happened to one of your loved ones? This gets them to think about how quickly things can change, and that’s it not just about them, but their family.”
Younger generations often won’t elect disability insurance because they don’t feel at risk for illness or injury, or they don’t have a family to support yet.
“Younger, single people are often the least inclined to purchase. They say, ‘if something happens to me, I don’t have kids to worry about,’” said Rich Datz, District Manager.
“Unfortunately, I think the younger generation are the people who need disability insurance because they are roughhousing outside of work, such as playing sports. So, they’re actually more at risk for a disabling injury.”
And for older, more financially-established employees, high incomes can actually be a deterrent.
“Sometimes, employees who make the most money are hesitant to elect disability insurance, but they are in need of income protection coverage, too,” said Scott Adkins, Account Manager.
“Often, families with high-income-earners are single-income families, so if this employee were to be out of work, they may have no flow of income at all. They have built a lifestyle around this income, so if it were to disappear, they may have to make some major life changes.”
It Won’t Happen to Me
If employees are generally healthy, they usually don’t fear the possibility of a disabling injury or illness.
“Nobody plans on being disabled, but things happen that are unexpected. We get into a car every day. That alone puts you at risk,” Jeff Snyder said.
I’ll Never Use It
Often, employees worry about the costs of the insurance, especially if they may never use it.
“So many employees ask, ‘What if I never use this?’ and I respond with, ‘That’s the goal.’ Think of it like this: I have homeowner’s insurance, and I may never use it. But if my house were to catch fire, flood, or get robbed—I will be really thankful I have it. Disability insurance is the same way,” said Michael Wasle, Account Manager.
Ensure Your Employees are Educated
One of the ways American Fidelity provides a different opinion for our customers is by focusing on benefits education. Before and during enrollment, we offer educational materials, tools, group meetings, and one-on-one benefit reviews to ensure your employees understand their options.
Because there are many misconceptions about disability insurance, it’s important to help employees learn about the policy and obtain financial protection.
Related Disability Articles
The key differences between the two types of disability insurance policies are benefit periods and elimination periods. Learn more.
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.