Group disability coverage protects about 500,000 families from impoverishment each year, contributing to a savings to the government and taxpayers of up to $4.5 billion per year, according to research by Charles River Associates (CRA), a leading global economic consulting and research firm.
Commissioned by Unum, Economic Analysis of Insurance Products in Workplace Benefits Programs in the U.S.
quantifies for the first time the value of financial protection benefits for working families. It also examines the savings to government and taxpayers as these benefits relieve the burden on public assistance programs.
The research comes at a time when many working Americans lack adequate savings to protect themselves financially should a wage earner die or become disabled. Additionally, the federal government is facing unprecedented budget challenges, limiting its ability to provide citizens with a financial safety net.
But there are ways individuals can take more control of their financial security. One is to make greater use of the financial protection benefits offered or provided at work. Employer-sponsored benefits, like group disability insurance, help ensure that those unable to work due to illness or injury have sufficient funds to pay their bills and maintain their lifestyles without relying on public resources.
It is our hope that this report contributes meaningfully to a robust dialogue among consumers, employers, insurers and policymakers, as we move forward together to provide important financial protection to working Americans.
The research by Charles River Associates was presented July 27, 2011, at the PROTECT 2011: Workplace Benefits and Financial Security Symposium in Washington, D.C. Click here
to watch a video of speaker highlights from the symposium.
Financial protection that benefits everyone
More than 70 percent of American households could not pay their normal living expenses if a wage earner is disabled for six months. Employer-sponsored disability coverage replaces up to 60 percent or more of an employee's lost wages.
For minimal expense, employers can provide substantial economic value and financial peace of mind to employees. This gives employers an advantage when competing in the labor market.
For the government and taxpayers
Wage earners with disability coverage are much less likely to fall into poverty if they become disabled, and are less likely to require public financial assistance, reducing the call on government resources.