Employees at small
businesses are less likely to have disability insurance than those who work for
larger employers, a Guardian Life study showed.
Guardian’s most
recent workplace benefits study showed 76% of those who work for a company of
1,000 or more employees have DI, versus 41% of those who work for an employer
with 50 workers or less.
The vast majority
(92%) of Americans who have DI acquired it through their employer, Guardian
said. And fewer Americans own DI, with an 11% drop in the percentage of those
who have the product – from 65% in 2017 to 54% in 2018.
Not having DI as a
workplace benefit “is clearly contributing to lower financial wellness among
working adults in America, given that 40% of the working population in the U.S.
works for small companies,” said Gene Lanzoni, assistant vice president,
thought leadership, Guardian Life.
Workers may not
realize that DI is actually income replacement, Lanzoni said. “People don’t
understand what it is.”
But offering DI as
a benefit to small-business employees does more than help the workers, Lanzoni
said. It also provides a benefit to the business, particularly in the current
low unemployment environment.
“For those small
businesses looking to attract and retain employees, they are competing on
benefits,” he said. “Income replacement is important to employees. They just
don’t realize DI does that.”
Lanzoni said DI
carriers and benefits brokers need to do more to educate small-business owners
about the product, what it means to employees, and how offering DI could be a
differentiator in attracting talent.
DI also can help
protect workers against a major source of stress – financial stress.
“Money is a leading
source of stress for many working families,” Lanzoni said. “Brokers can
emphasize the role that DI can play in protecting income and improving
financial wellness. And then talk about the role DI can play in helping the
employer. Productivity is important for small business. And DI can be important
in attracting and retaining workers.”
In thinking about
the role DI can play in protecting working Americans, a broker “can certainly
change the conversation in an effective way by focusing on how DI can protect
income,” Lanzoni said.
“People don’t
realize the chances of their going out on a disability leave are greater than
what they think.”
Susan Rupe is
managing editor for InsuranceNewsNet. She formerly served as communications
director for an insurance agents' association and was an award-winning
newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her
on Twitter @INNsusan.
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