Many Baby Boomers Incorrectly Believe They Are Protected Against The Risk Of
Disability
Story by http://www.ahip.org
Many baby boomers incorrectly believe they have disability income protection,
according to a new survey conducted by Harris Interactive® on behalf of
America's Health Insurance Plans (AHIP). Most say that disability insurance is
important to protect their income, but nearly half say they do not have any
disability income protection.
"Baby boomers recognize the value disability insurance provides, but many
mistakenly believe they are covered," said Karen Ignagni, President and CEO
of AHIP.
The survey assessed baby boomers' perceptions about the need for disability
income protection. Most baby boomers (56 percent) say that disability income
insurance is important to protect their income should the primary wage earner in
their household become disabled and unable to work for an extended period of
time. Only nineteen percent said that disability insurance was not at all
important.
However, nearly half of baby boomers acknowledge they do not have any form of
disability income protection. According to the survey, only 52 percent of baby
boomers say they have either short-term or long-term disability insurance.
Many baby boomers incorrectly believe they have disability income protection.
The survey found that 44 percent of baby boomers say they have long-term
disability insurance provided through their employer or purchased individually.
In reality, only 30 percent of workers in private industry have long-term
disability insurance coverage, according to the U.S. Department of Labor.
Specifically, twelve percent of baby boomers said they purchased long-term
disability coverage on their own. Data show that there are just over three
million active individual disability insurance policies, which accounts for only
about 2 percent of U.S. workers.
"Many baby boomers have a false sense of financial security against the
risk of disability," said Humphrey Taylor, Chairman of the Harris Poll.
Baby boomers were also asked what their primary source of financial assistance
would be if they became disabled and were unable to work. A quarter (25 percent)
said they would rely on their personal savings. Others said they would rely on
Social Security Disability Insurance (15 percent), private disability insurance
(13 percent), or Workers' Compensation (13 percent). Previous surveys have found
that baby boomers overestimate the coverage available through public disability
programs and most are not financially prepared to weather even a short term
disability.
In addition, almost half of baby boomers (47 percent) said they had a
conversation about disability insurance in the past year. When asked about where
they would most likely seek information about private disability income
insurance, almost a quarter (24 percent) said an insurance agent, seventeen
percent said their Human Resources representative, fifteen percent said the
internet, and ten percent said a financial advisor.
Harris Interactive conducted an online survey on behalf of AHIP between April
25-29 among a nationwide sample of 3,607 adults aged 18 and older, including
1,182 Baby Boomers aged 44 - 62. Data were weighted to be representative of the
total U.S. adult population that is online on the basis of region, age within
gender, education, household income and race/ethnicity, and for propensity to go
online. No estimates of theoretical sampling error can be calculated; a full
methodology is available.
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