More than 400 recipients of employer-sponsored disability benefits shared their stories of unexpected injury or illness with researchers for a study conducted by the Consumer Federation of America (“CFA”) in partnership with Unum.

Mathew Greenwald & Associates spoke with individuals who had received at least six months of long term disability benefits from Unum. “Beneficiaries told us that disability insurance payments played an essential role in protecting their financial and emotional lives,” said Stephen Brobeck, CFA's executive director. “This employer-provided insurance clearly represents an important part of the social safety net.”

“These stories from disability beneficiaries underscore just how important it is for working Americans to protect their most important asset – their income,” said Thomas R. Watjen, president and CEO of Unum. “A disabling illness or injury can cause real financial hardship for many individuals and their families, and disability insurance creates a backstop against significant income loss during the period of absence and recovery.”

Because disability benefits typically replace 60 percent of pre-disability income, beneficiaries reported a reduced standard of living. Eighty-five percent said they had to cut back or stop saving for retirement. Fifty-eight percent said they skipped or delayed some medical, dental, or vision care for themselves or family members. And 57 percent said they had to cut back on spending “to the point of an uncomfortable lifestyle.”

But most beneficiaries also reported that their disability payments played a critical role in preserving an adequate standard of living.

  • 23 percent missed a mortgage or rent payment, but without the disability benefits, an additional 49 percent said they would have missed a payment.
  • 14 percent had to move out of their home because they could no longer afford to live there, but without disability benefits, an additional 44 percent said they would have had to move.
  • 42 percent missed at least one payment for bills or consumer loans, but without disability coverage, an additional 41 percent said they would have missed a payment.
  • 31 percent applied for community or government assistance to help pay for food, but without disability benefits, an additional 33 percent would have applied.

Beneficiaries reported not just financial, but also social, psychological, and health-related benefits of disability payments.

  • 77 percent said disability benefits helped them avoid strain with spouse or partner. 
  • 78 percent said benefits helped them maintain their self-esteem as a provider for their family.
  • 88 percent said benefits helped them maintain a healthy emotional outlook.
  • 68 percent said their health would have been worse without benefits.

Nearly all beneficiaries (95 percent) agreed that they would encourage other people to get disability insurance through their employers, and nearly three-fifths (58 percent) said their disability benefits made them feel more favorable about their employer. A large majority (85 percent) agreed that employers should automatically enroll new employees in disability insurance, allowing them to opt out of this coverage if they did not want it.

A large majority of beneficiaries (88 percent) said that employers should do a better job of explaining disability insurance. And many (85 percent) agreed that government should inform the public about the risk of becoming disabled and its financial impact.

Victoria Spears

Victoria Spears

Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].

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